Russian Prime Minister Vladimir Putin on Wednesday appeared to link the resignation of Standard & Poor’s chief executive to the agency’s downgrade of the U.S.’s sovereign rating earlier this month.“We all know what goes on in the financial world. Here you have the S&P ratings agency lowering the U.S. sovereign debt rating. And now they fired the agency’s head, and started an investigation regarding the agency itself,” Mr. Putin told a meeting of Russian academics, Interfax news agency reported.
“There is much that’s unclear about the situation, many things which are, let’s say, superficial,” Mr. Putin said.
To quote Joe Biden (always dangerous, I know), Putin’s suspicions are completely understandable. That would be the obvious inference regarding a similar situation in Russia.
The more interesting question is whether Putin is merely projecting/mirror-imaging, or is instead correct in his conclusions.
Developments in recent years, most notably from 2008 on, and especially post-January, 2009, increase the odds that Putin has in fact nailed it. There has always been an element of gangsterism in American government (as in any government), but those tendencies have become more overt and numerous in recent years. So, as a Bayesian, I would say that my estimate of the likelihood that Putin is right is far higher now, than it would have been several years ago.
There is an ironic sort of convergence in this story. One of the reasons my interest in Russia was rekindled several years ago after decades of slumber is that it struck me as a classical liberal (libertarian, if you must) dystopian novel come to life. It illustrated all of the dysfunctions that arise in the absence of a rule of law and particularly property rights, the atomization of civil society, the dominance of a government operating with few real institutional checks, and the intersection between private economic interests and said unchecked government.
A crucial function of a dystopian novel, of course, is to point out through extension and exaggeration what will happen if existing repressive tendencies and features in society grow. If the leading figure in a real world dystopia has, in fact, correctly diagnosed the reason why Deven Sharma was ousted from S&P, it would indicate that the US is itself slouching towards dystopia.
I have little respect for the rating agencies, and recognize that they are in many respects government creations and benefit from various government protections and mandates. That said, N wrongs don’t make a right. Better to eliminate privileges as a matter of principle, than to strongarm a company for having the temerity to question Leviathan’s solvency.
So I hope Putin is merely projecting, but I would also lay non-trivial odds on his prescience, at least in this matter.