From the S&P statement explaining their downgrading of US creditworthiness:
We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process.
In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.
TRENDING: GOP candidates slam Obama after downgrade
By: CNN’s Kevin Liptak
Washington (CNN) – Republican presidential candidates issued harsh criticism of President Barack Obama Friday after the credit rating agency Standard and Poor’s announced it was downgrading America’s long-term debt status.“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy,” Former Massachusetts Gov. Mitt Romney said in a statement. “Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.”
Tuesday, March 11, 2008
Moody’s and S&P Avoid Cutting Ratings on AAA Subprime
A kind reader Tim e-mailed me this Bloomberg story, which apparently is only up on the professional version (yes, I am a member of the great unwashed who lacks a Bloomberg feed. Now you know what to get me for Christmas). I’ll add a proper link once it migrates over.
The rating agencies have taken some steps to show a new toughmindedness. Standard & Poor’s announced with some fanfare in January that they were going to either downgrade or put on negative watch $534 billion of debt. S&P was also so kind as to estimate that these moves could increase bank losses, now at roughly $130 billion, to $265 billion.
A week later, S&P announced some internal changes in an effort to bolster its damaged reputation. These moves seemed a bit late in coming, given the firestorm of well-deserved criticism aimed at rating agencies. Indeed, the timing was a bit sus, as they would say in Australia, coming only as international regulators are considering how to improve rating agency conduct. The decision to issue the press release now could be viewed as an effort to take the wind out the sails of the International Organization of Securities Commissions plans to implement a code of conduct.
The Bloomberg story confirms our cynicism about the S&P’s and Moody’s. It reports that the rating agencies have held back from downgrading AAA subprime related securities.
Around the world, The McGraw-Hill Companies provides people with the information and insights they need to adapt and grow in changing times.Founded in 1888, it is a leading global financial information and education company that helps professionals and students succeed in the Knowledge Economy.
Leading brands include Standard & Poor’s, McGraw-Hill Education, Platts energy information services and J.D. Power and Associates.
By working together with our customers and partners, these brands are laying the foundation for a smarter, better world. (Watch the video – right – to hear what our employees have to say).
-Harold McGraw III serves as Chairman, President and CEO.
-The Corporation is headquartered in New York City and has more than 280 offices in 40 countries.
-Sales in 2010 were $6.2 billion.
-Employees worldwide total approximately 21,000.
THE FLORIDA TIMES-UNION
August 3, 2006
Bush ties prove to be lucrative
by William L. Bainbridge
Country western singers Tim McGraw and Faith Hill have been getting far more attention than the publishing giant with a similar name that has been quietly gathering in our tax dollars like a hungry squirrel getting ready for winter.
With sales of $6 billion in 2005, publishing giant McGraw-Hill, no relation to the talented musical performers, produced an annualized return of 19% last year. Critics of President George W. Bush’s administration have been vocal about the Bush and Cheney family ties to defense contractors at a time of war and, more recently, to their ties to the price gouging gasoline producers. Few, however, have noted the close and profitable relationship between the Bushes and the leadership of McGraw-Hill.
President Bush has managed to keep his family’s nearly eighty-year relationship- with the McGraws alive and well – – a relationship that, according to THE NATION , began between the President’s grandfather, Prescott Bush, and James McGraw Jr., great uncle of current McGraw-Hill Chairman Harold McGraw, III in the 1930’s.
While it is generally understood and accepted that exchanging favors among business friends in the private sector is common practice, the ethics of such practices between government officials and private business interests is another matter. Examples in the defense arena and among Washington-based lobbyists such as Jack Abrahoff have been broadly documented. Such patterns have contributed to the downward spiral that has resulted in record low public approval ratings for the current President..
Less visible are relationships in other sectors that have proven to be no less lucrative. Consider the following:
· Our state governments will have spent as much as $5 billion with private firms in the next two years in direct costs to develop, score and report the Bush administration’s “No Child Left Behind” law tests designed to record student performance. This is the estimate from the federal Government Accounting Office. Only four companies tend to control test development: (1) CTB, a testing division of McGraw-Hill, (2) Texas-based Harcourt, (3) Illinois-based-Riverside and (4) London-based Pearson. McGraw-Hill’s CTB division appears to be dominating this lucrative new industry with contracts in nearly half the states. Is it because they have a superior product and entered into the criterion test market arena first? The test publishers have spent millions with officials in government and at some foundations on reforms that produce more corporate profits rather than substantive benefits for students.
· The National Reading Panel adopted standards for a heavily scripted phonics program, favoring the nation’s largest phonics publisher, McGraw-Hill’s “Open Court.” McGraw-Hill’s representatives dominated the panel and the same pubic relations firm worked on the federal plan that promoted “Open Court” in Texas, under then Governor George W.. Bush. The findings were billed as “scientifically based” built on its “success” in the Houston Independent School District. This alleged success has since been found to be predicated on an educational statistics numbers scandal.
· U.S. government speakers at conferences have been accused by education leaders of crossing an ethical line by endorsing McGraw-Hill products including “Open Court” and SRA/McGraw Hill’s “Direct Instruction.”
· The Association of American Publishers (AAP) sent a letter to the U.S. Secretary of Education indicating concern that some programs were receiving explicit preference. “We request that you again clarify that there is no federally approved list, in this case for assessments, for which Reading First funds can be used,” AAP said.
· Harold McGraw III, whose companies are major beneficiaries of federal education funds to school systems, was appointed a member of the current President’s transition advisory team.
· Harold McGraw III also was appointed to (1) the Board of Directors of oil company ConocoPhillips, (2) the Chairmanship of the National Council on Economic Education and (3) the Education Task Force of the Business Roundtable.
· Two former U.S. Secretaries of Education received the Harold W. McGraw Prize in Education. When one considers the influence the U.S. Department of Education has over school system spending with educational publishers, should accepting such and award from a publisher raise questions?
Some would consider these matters as additional examples of the culture that has been widely reported as permeating the present White House. It is difficult to see how such attitudes and practices benefit children, and contribute to taxpayers’ efforts to support improved student performance.