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I rarely write about national issues since this a state news site, but Alexander Cockburn’s rant in the Feb. 4th edition of The Nation deserves your attention (available in paper edition or online to subscribers).

Terrorism flourishes brazenly at Ground Zero in the new 7 World Trade Center building. Here can be found a secretive entity of fabulous wealth and power. Kingdoms and corporations alike tremble at its shadow and make haste to pay it tribute. I refer to Moody’s Investor Services, wholly owned subsidiary of Moody’s Corporation, which reported $2.03 billion in revenues in 2006.

On January 10 Moody’s, in concert with the other main bond-rating firm, Standard and Poor’s, gave the United States its top AAA credit rating. The terrorist blackmail threat came in the form of a demand by Moody’s that the US government “reform” Social Security and Medicare: “In the very long term, the rating could come under pressure if reform of Medicare and Social Security is not carried out as these two programs are the largest threats to the long-term financial health of the United States and to the government’s AAA rating.”

Translation: Privatize Social Security, or else the U.S. rating, which is the anchor of the world’s financial system, will be downgraded.

Thus does Moody’s man calmly threaten to plant the financial equivalent of a thermonuclear device under the Statue of Liberty.

Cockburn calls Moody’s financial analysis of major corporations a protection racket and supports his accusation with two examples. Moody’s only rates corporations that “voluntarily” retain its services. The German insurance corporation, Hanovers, repeatedly declined Moody’s invitations to have its credit rated. So Moody gave it an unsolicited adverse rating, then–“just like a small-time mobster after hurling a brick through the window of a liquor store”–invited it to “voluntarily” retain Moody’s services. No deal, Hanover said, so the next rating was worse. And so on, until Hanover was rubble.

Enron, on the other hand, was handled with “ermine gloves” until days before its collapse–even though Moody had access to Enron’s internal financial operations.

Cockburn asserts, furthermore, that the world’s credit system is strained to the bursting point because of financial scams from junk bonds to subprime mortgages that Moody’s and other financial rating agencies helped put together. In other words, they’re not to be trusted with Social Security trust funds.

Of course, the terrorists in Lower Manhattan want Wall Street to get its mitts on the pools of money held in the Social Security trust funds. But if Moody’s is going to present itself as a major political player presuming to dictate national policy down the barrel of a financial gun, its executives and analysts should be hauled into the star chamber. Let’s have war on terror and a rendition of these Moody’s executives before a special investigative committee of Congress with full subpoena power. Ask them to explain their own role in causing the financial upheavals afflicting the planet right now, due to the collapse of the housing bubble and its impact on the home mortgage market.

As Professor Robert Pollin of the University of Massachusetts remarked to me last week, “We could say the bubble and crisis occurred because outfits like Moody’s rating agency always misread the buildup of bubbles. … [They] don’t have a clue as to what they’re talking about.”

Pollin further wants to know why, if Moody’s analysts care to discuss financial laxity, they don’t take aim at what we’re spending in Iraq. The defense budget in 2006 was $617 billion. That is 4.7 percent of GDP. Before the war, the military budget was 3 percent of GDP.

Social Security and Medicare together came to $900 billion in 2006. Why should Moody’s attack our minimal welfare cushion and leave the “imperial budget” intact?

In fact, almost all of the projected rise in the costs of welfare programs is in Medicare, and the reason for those increases is that the insurance and pharmaceutical companies have such a grip on  our health system. If we converted to single-payer, including all those healthier younger adults would bring down the cost of Medicare.

Cockburn concludes:

Shift to single-payer and quit shoving money–4.7 percent of the GDP–down the imperial sinkhole, and there’s no fiscal crisis of any sort, short- or long-term, for Moody’s or anyone else to fret about. And in the even shorter term, if Moody’s sees fiscal crisis looming, why don’t its overpaid executives for once put the national interest first and call for a tax hike on the rich? Pollin tells me that just going back to Clinton, as opposed to Bush 2, on taxes for those making more than $200,000 a year would generate $60 billion a year. Do this and end the war in Iraq and you wipe out the deficit at a stroke.

Let a real war on terror commence.

I went to the public library yesterday to research the rating on a health insurance company I’m considering for supplemental coverage on my Medicare policy. The company that published the ratings wasn’t Moody’s, but still, when I saw the A+ that it gave my prospective health insurer, I felt some niggling doubt about the assessment, knowing that these rating companies aren’t the objective arbiters of financial stability that we’d like to believe they are.