Is Paul Krugman Missing in Action Today?

by Sam Kazman on August 16, 2011

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Fitch today reconfirmed its AAA credit rating for the US.  Why isn’t Paul Krugman blasting them?

On August 5th, the day Standard & Poors issued its downgrade for the US, Krugman attacked it and its cohorts as unreliable miscreants.  In his words, “it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy?  Really?  …  In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.”

But as Krugman admits, when it came to those mortgage-backed securities Fitch performed as poorly as S&P.  By Krugman’s logic, Fitch’s action today, in sticking to its AAA rating, is just as unreliable as was S&P’s downgrade last week.  So why isn’t Krugman going after Fitch as well?

Something tells me I shouldn’t hold my breath.  In attacking S&P, Krugman was engaging in his typical defense of big government.  On the other hand, assailing Fitch would entail just the opposite.

And that, to borrow Krugman’s own recent characterization of another controversy, would be a wee bit too “inconvenient”.

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