Paul Krugman reacts to the S&P downgrade of the United States

The Nobel-prize-winning economist castigates the credit rating agency on his blog.

Writing on his New York Times blog last last night, Nobel laureate, Obama critic, Princeton economist and card-carrying Keynesian Paul Krugman reacted angrily to the controversial decision by Standard and Poor's (S&P) to downgrade the United States' top-notch triple-A credit rating for the first time in history.

Professor Krugman wrote:

On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.

On the other hand, 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?

Just to make it perfect, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point -- then went ahead with the downgrade.

. . . In short, S&P is just making stuff up -- and after the mortgage debacle, they really don't have that right.

You can read the full blogpost here.

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Commons confidential: Comrade Corbyn the coverstar

Milne's messages, Chilcot rumours, and why the Evening Standard may have backed Zac.

Tony Blair’s first flatmate, Charlie Falconer, will find himself in a difficult spot should Jeremy Corbyn stick to his guns when the Chilcot report is published on 6 July. The current Labour leader, a former chair of the Stop the War Coalition, is on record denouncing the campaign in Iraq as an “illegal war” and supporting a war crimes trial for his predecessor-but-two.

Every nudge and leak suggests that Chilcot’s weapon of mass destruction will eviscerate Bomber Blair. The whisper in Westminster is that Baron Falconer might feel honour-bound to quit as shadow justice secretary in the House of Lords should Comrade Corbyn back a plan to send his old housemate to the Hague.

My snout recalled overhearing a conversation in which Falconer’s solicitor wife asked her hubby: “How can you work for a man who thinks Tony is a war criminal?” Please do tell us, Charlie.

Comrade Corbyn is the first Labour leader for many a year, perhaps the first in the history of the class struggle, to be chosen as a cover star by Theory & Struggle, the journal of the Marx Memorial Library. The front-page pose is entirely social-realist by design: the bearded leader is pictured staring purposefully off to the reader’s left – of course. We may be sure that any likeness to an image of Karl Marx on the same page was purely non-coincidental.

An old school chum of the bombastic backbencher Karl McCartney let slip a clue about the source of the Lincoln Tory’s touchiness with regard to his personal brand. Back in 2013, the MP failed to persuade parliamentary authorities to spend £15,000 reprinting his surname on Commons documents, including the Hansard verbatim report of proceedings and business, with a superscript “c” instead of the lower case “Mc” on the line. Perhaps his obsession with presentation dates from when classmates nicknamed him Shergy, after Shergar, the Epsom Derby winner that was stolen and killed 33 years ago. On the upside, equine comparisons never unseated Princess Anne.

Maybe Sadiq Khan’s team, still puzzling over why the London Evening Standard editor, Sarah Sands, endorsed its rival Zac Goldsmith when the Tory was a nailed-on loser, should examine its man’s housing policy. Sands’s purchase of two flats in the redeveloped BBC TV Centre at White City wasn’t exactly the “first dibs” scheme envisaged by the Mayor of London to widen ownership.

Hacks using the Telegram encrypted messaging app, handy for receiving clandestine documents from anxious leakers, were amused to discover that Seumas Milne signed up for the service in May. Corbyn’s spin doctor may be unaware that everybody on the network with his number was notified of the covert arrival.

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad