Revenge is a dish best served cold
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If you don’t like your diagnosis, there are actions you can take.
Shinto shrines in Japan feature trees bedecked in white slips of paper, tied to the branches. Those printed messages are unwelcome fortunes that visitors have left behind, in the superstition that by tying them to branches, they can sweep the bad luck away.
American authorities would like to walk away so nonchalantly, after Standard & Poor’s (S&P) downgrade of US debt. First, the Treasury mockingly publicised the rating agency’s $2 trillion error in its initial reckoning. Then, last week, the New York Times reported that the Justice Department is investigating whether S&P improperly rated dozens of mortgages prior to the 2008 credit crisis. Justice Department representatives were “not available” to comment. It was unclear whether Moody’s or Fitch had received similar notices, although the proceedings do unquestionably predate the downgrade.
The Justice Department was actually probably following a preordained process. The trouble is that the announcement has created an appearance of spite. Whatever the failings of the rating agencies, the most serious repercussion would be to create an impression that the government is engaging in a vendetta. Invidious comparisons – hopefully, farfetched ones – come to mind. In 2010, Mikhail Khodorkovsky, who had challenged Vladimir Putin’s administration, was jailed again, and the case was widely condemned in the West.
Perhaps the American government is fortunate that it is not being graded by the New York City Department of Health and Mental Hygiene. For the past 12 months, the local agency has issued a spate of letter grades (A’s, B’s and C’s, just S&P’s) to eating establishments across the city. These ratings, which must be prominently displayed in the restaurant windows, provide an official guide to sanitary conditions and violations. Putting diners on alert to unhealthy habits in the kitchen seems like a first-rate idea. Moreover, restaurants that do not receive A’s on the first round are re-inspected, at least once a week thereafter, providing incentives to improve. Justice Department, take note. The appropriate reaction to an unsatisfactory grade is to clean up the premises, not to poison the inspectors.
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Vanessa Drucker is the American Editor of Fund Strategy, based in New York City. She has worked as a financial journalist for 20 years. In the 1980s, she practiced banking and securities law on Wall Street, and is the author of two business novels.
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