Saturday, November 16, 2013

Obama Prosecution Of S&P Transparent As Saran Wrap

     With all the talk about ObamaCare lately and debate and discussion about the "presidential lie," a government prosecution by the Obama Justice Department has quietly proceeded, almost unnoticed. I am of course talking about the Obama administration's legal action against Standard and Poors, a division of McGraw-Hill, and one of the largest credit ratings agencies in the world. The Obama Justice Department is in the process of prosecuting S&P for their role in rating as solid investments the mortgage-backed securities which were at the epicenter of the financial crisis of 2008. As per usual with the actions of the Obama administration, the motives for this one are highly questionable, if not down right scandalous.
     If the government is going to prosecute S&P for misleading investors as to the credit worthiness of Residential Mortgage Backed Securities and Collateralized Debt Obligations, then they must also prosecute themselves. It was federal regulators, who are supported in their jobs by tens of billions of taxpayer dollars, who looked the other way as these "investments" were bought and sold multiple times. Lest anyone forgets, it was Democrats in Congress, through Fannie Mae and Freddie Mac, that pushed not only the mortgage lenders to make bad loans, but then encouraged the selling of these bad loans as investments.
     It is little more than ironic that no other credit ratings agencies are being prosecuted by the federal government in this manner. Added to the irony is that until August of 2011, Standard and Poor's was not on the Obama Justice Department's radar either. It was then that S&P downgraded the credit worthiness of the United States government, the first time in our history such a downgrade has occurred. The Obama administration was in the process of "negotiating" with House Republicants to raise the nation's debt limit. The downgrade was not only an embarrassment to the administration, but it lent fuel to the fire that the President and his Democrats had not been good stewards of the people's money. It was after the downgrade that the Obama administration began a campaign against Standard and Poor's to place the blame for the 2008 crisis squarely on their shoulders.
     It is ironic that the Obama administration is using its Justice department to prosecute S&P for the very crisis that was in part caused by Bill Clinton using his Justice department to force the bad loans in question to be made in the first place. Whether the government is ultimately successful or not is not important, the idea that the executive branch could use its Justice Department to punish administration detractors, is a concept that would cause a great amount of consternation among our founders. It is anathema to the great nation they carefully crafted, and an assault on the ideals of limited government and separation of powers.

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