Bipartisan Attack on S&P Is “Utter Nonsense,” Greenhaus Says
A small plane buzzed the offices of Standard & Poor's in lower Manhattan Tuesday, unfurling a banner that read: "Thanks for the downgrade. You should all be fired."
A dangerous stunt, for sure, but arguably the least of the S&P's troubles right now.
Since cutting America's credit rating from AAA to AA+ on Friday evening, S&P has come under attack from the White House, Warren Buffett, Legg Mason, Tim Geithner and politicians of both parties. (See: S&P Botched Its Story, But The Downgrade Is Perfectly Fair)
In the latest development, the Senate Banking Committee is "looking into" S&P's decision to cut America's credit rating, Reuters reports.
Democrats don't like the S&P downgrade because it occurred on President Obama's watch and caused a hit to the national psyche. That's never good for incumbents and comes at a particularly dangerous time given the economy's already on shaky ground. (There's also the matter of the $2 trillion mistake, but let's not let mathematics get in the way of a good political rant.)
Republicans, meanwhile, don't like the downgrade because S&P specifically cited "the political brinkmanship of recent months," which most observes assume is a shot at the GOP. More importantly, perhaps, S&P faulted the lack of revenues in the $2.4 trillion debt deal ultimately agreed upon.
In numerous press appearances since Friday, S&P officials have repeatedly cited the lack of revenues as a rationale for the downgrade, prompting outrage from Republicans. S&P's analysis "is overly focused on resolving the debt crisis in a manner that would greatly worsen the jobs crisis," House Majority Leader Eric Cantor said.
The bipartisan outrage over S&P's downgrade is "utter nonsense," according to Dan Greenhaus, chief global strategist at BTIG. "It's really a shame. This is an opportunity for [Congress] to say 'We got downgraded. Holy cow what are we going to do about this? Maybe the way we conducted ourselves last time around isn't the best way.'"
Instead of searching for compromise and tackling the real drives of our long-term deficits, politicians are resorting to the time-honored tradition of shooting the messenger, Greenhaus laments. "I think we should be conducting ourselves in a better manner."
Amen to that.
If there's a silver lining here, it's that S&P's downgrade proves Republicans and Democrats can agree on something, even if for the wrong reasons.
Furthermore, at least the U.S. government hasn't raided the offices of S&P (and Moody's) as Italian officials did last week. Despite Washington's heavy-handed response to the downgrade, America hasn't sunk that low —at least not yet.
Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at firstname.lastname@example.org