THE BLOG
08/08/2011 06:53 pm ET Updated Oct 08, 2011

Standard and Poor's, The White House and the Economy

The White House, Treasury officials and persons in the private sector who are now so publicly critical of Standard and Poor's for its downgrading of the creditworthiness of the US government are too late and off the mark. Anyone who takes the time to read the statement of S&P will soon learn that it is more right than wrong in the instant case about credit worthiness, on a balance-sheet basis, about the US government.

That they are probably correct now on lowering the credit rating of our Treasury bills does not absolve them for their inaction in 2009 and 2010 for failing to withdraw their double and triple A rating for flawed credit default swaps and collateralized bundled mortgages sold by major commercial and investment banks to individual and institutional purchasers in reliance on S&P and other credit rating agencies.

The White House and the Tea Party leadership in Congress have only themselves to blame. Don't blame S&P. What did the White House think would be the impact on the credit worthiness if the only deal they could craft to enable the debt ceiling to be raised was limited only to cuts in the deficit and current spending without ANY companion inclusion of revenues, either by ending existing tax subsidies, expiration of the Bush tax cuts and/ or raising taxes?

S&P is critical of the "ransom" paid by the White House to the Republicans and Tea Party by dropping its demand for a "balanced sacrifice." It is similarly critical of the Republican Party for holding the government and the White House hostage.

Nothing White House or Democratic Party surrogates can say in criticism of S&P is going to change the underlying financial and political data which is the basis of their downgrade.

Yes, no question that S&P's credibility now has been compromised by their failure to act earlier during the collateralized mortgage obligations and credit default swaps debacle; as well the failure to monitor Fannie Mae and Freddie Mac.

No need for me to repeat my earlier comments last week about the importance of the words used by the president in addressing our urgent problems.

Unless President Obama comes before the country with bold job-creating initiatives that are credible to the country, and even to the Republican Party, his re-election may be remote, if not irrelevant.

Again, I know I sound like a "broken record," or repetitive writer, when I acknowledge that President Obama cannot do it alone.

Bill Maher's suggestion about the formation of a "Donner Party" on the Democratic side, to off-set the power of the Tea Party, may not be as crazy as it sounds, but for its association with the early settlers of California who, stranded in the high Sierra Nevada mountain snow of the Donner Pass, began to eat one another to survive.