A view from Lick Skillet by Gerald Largen: To catch a thief — but not with Kingston P.D.

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For the moment, imagine, if you will, gentle reader, that you are a professional law man, a policeman.
Imagine further that you have been informed that a petty thief has been engaged in a continuing series of petty thefts over a period of several weeks.
Imagine still further that you are told that these thefts take place at an exact location, identified within four square feet, not more than two blocks from your police department headquarters, and within a time frame of little more than a maximum of ninety minutes every morning, so that you have the place and time that these thefts regularly occur.

Based upon this information and these facts, do you not think that you as a professional lawman could either capture the thief, or at least scare him off from his pattern of thievery?
We have no doubt that you would, and that most professional lawmen would.
However, for some reason, the Kingston Police Department seems utterly incapable of performing this elementary chore, even though they have all the required information as to place and time.
What’s wrong with this picture?

Among breaking news stories, the Standard and Poor’s downgrade of our national credit rating from AAA to AA+ has probably been the dominant item.
We have been somewhat amazed by some of the remarks we have heard, both before, when the downgrade was only threatened, and after, when the downgrade actually took place.
Much of our amazement has centered upon the apparent ignorance of just what Standard and Poor’s is.
Many people seem to think that this “rating agency” is an official quasi-governmental agency, or at least a nonprofit disinterested outfit.
Even some of our elected officials and our leading news reporters seem to share in this erroneous thinking.

Although we are sure that none of our readers are in this group of the misinformed, we would take a few minutes to spell out the true situation for those who are so misinformed. 
Back in the late Nineteenth Century, circa 1868, when new railroad companies were being promoted by the dozens, potential investors in these railroads’ stock wanted some reliable information, if they could get it, before investing their money in the new companies.
A gentleman by the name of Henry Varnum Poor saw the potential of providing this information, and making money doing so by publishing and selling this information to the potential buyers. This was the inception of the ratings business.
Over the years, Mr. Poor’s business grew, and it was eventually merged with the Standard ratings firm to become Standard and Poor’s.
The other two principal rating companies are Moody’s and Fitch’s.

The rating was always done by private businesses, and always done with a profit in mind, and so it is today.
However, with the wide spread use of the copy machine, the rating companies foresaw the loss of their income from selling their rating information to potential users and decided that the only way to protect their source of revenue was to charge the firms being rated, instead of those seeking the ratings.
This change greatly contributed to the ratings scandal of a couple of years ago, since no one would willing pay a ratings agency to have their stocks, bonds, mortgages, or debentures get a poor rating, and thus the agencies, led by Standard and Poor’s were giving AAA ratings to bundles of mortgages which banks and loan companies would then sell to buyers relying of the high ratings given by S.&P., et al.

Many doubt that either the mortgage bubble or the bank crisis would have occurred without the connivence of S.&P., et al. But, once one realizes that S.&P. is not an independent agency, but is merely a division of the McGraw-Hill Companies, Inc., the old book publishing outfit, their performance becomes a bit more understandable.
McGraw-Hill is a conglomerated company with one part being the financial services segment
Others include four TV stations, McGraw-Hill Education, Aviation Week and Platts  — an energy and metals data subsidiary.

The business is big enough to have over 21,000 employees, 307,000,000 shares of stock, and a large cap classification of $11.3 billions.
The financial services division, of which S.&P. is a part, constitutes 44 percent of total sales for the company. (Education is 40 percent and media is 16 percent.)
Obviously, the primary responsibility of the folks running S.&P. is to maximize the company’s income for the benefit of the shareholders.
Since the mortgage rating debacle, not only did the company’s reputation suffer, but so did income.
Therefore, one can legitimately speculate that the downgrade of U.S. debt owes as much to an effort to recover reputation, and lost profits as it does to a sincere conviction that the U.S. no longer merits a AAA rating.

Insofar as the rating itself is concerned, no rational person can doubt that this country has the assets and the capacity to meet any and (Gentle reader, at this point in writing this article, we were interrupted by a telephone call from Rep. DesJarlais, asking us to listen to a “telephone town hall”. We wasted several minutes listening to the Dr. try to justify his outrageous malpractice as our representative the first time we received one of these calls. This was the third one, and since it was a recorded voice of the Dr., we had no hesitancy in hanging up, but the interruption, even though our line is a “do not call” line, may have gotten us off message, for which we apologize) all debts incurred.

Although we have not read the actual text of the downgrade, we understand that it is based, not on ability to pay, but on political considerations, including the outrageous scenario played out in the Congress before raising the debt ceiling.
While we agree that the Congress as presently made up, including the TEA party thugs about whom we wrote last week, doesn’t seem competent to act as a responsible third branch of government, that has nothing to do with our credit rating, or ability to pay our debts.

We have little doubt that had the TEA partyers actually forced us into default that the Federal Courts, on application of the bond holders, would have issued the proper writs and mandatory injunctions to see that the debts were paid.
Fortunately, the bond market seems to value the S.&P. actions as highly as we do, and so far more people have invested to U.S. bonds, rather than getting out of them, despite the S.&P. downgrade.