Hardball: Hell hath no fury like an administration embarrassed by a top credit-rating agency stating the obvious — that its perilous spending policies and rising debts warranted a downgrade just like any poorly run business.
Speaking at a fundraiser in Philadelphia on June 13, 2008, candidate Barack Obama said of his Republican opposition: "If they bring a knife to the fight, we bring a gun."
In this case, in August 2011, Standard & Poor's brought an embarrassing downgrading of U.S. debt to AA+ from AAA in advance of the president's re-election bid, the first such reduction in U.S. history.
In response, the administration brought a lawsuit in 2013 charging fraud and seeking $5 billion in fines from S&P for the credit ratings it had attached to bonds supported by subprime mortgages in the years leading up to the financial meltdown.
At the time, it smacked of vendetta. As we noted last year, S&P's subprime securities ratings were virtually identical to those of Moody's and Fitch, yet the government singled out S&P for prosecution simply because it was the only one of the big three to pull the trigger on the downgrade.
The vindictive nature of the government's lawsuit was confirmed Tuesday when lawyers for McGraw-Hill, S&P's parent, filed an affidavit from the company's chairman, Harold McGraw III, stating that on Aug. 8, 2011, mere days after the downgrade, he got a call from Timothy Geithner saying S&P's deed would not go unpunished.
Read More At Investor's Business Daily: http://news.investors.com/ibd-editorials/012314-687419-tim-geithner-threatened-standard-and-poors.htm#ixzz2rGq5CgxY
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