Standard & Poor's is taking a lot of criticism today of the how-can-these-geniuses-lecture-us variety. Kind of like this. All of it is warranted, writes Ezra Klein at the Washington Post. After all, the folks at S&P "didn’t just miss the bubble," he writes. "They helped cause it." But the criticism also is irrelevant, and it "doesn’t make Standard & Poor’s wrong in this particular case."
The ratings agency singled out the political dysfunction in DC as a big reason for the US downgrade. Recall the rhetoric of the last few weeks. "Can anyone really say that U.S. debt is completely riskless?" Our political system is deteriorating, and S&P was right to point it out. Let's hope the push begins for genuine fixes, writes Klein. "If not, then this may be the first of many downgrades to come." At Time, Stephen Gandel also thinks the downgrade was justified. We're likely facing higher interest rates, which "will make it harder for the government, Americans and corporations to borrow money and expand," he writes. "And after all the borrowing we have done in the past few decades, it's an outcome we deserve."