By Oke Kay Snyder
From beneath a pile of alarming headlines—Russia’s war in Ukraine, Trump’s indictment—the latest news about the downgrade of the U.S. economy emerges like a roach in a bachelor pad’s kitchen sink. Pardon my sardonic chuckle. If you were looking for a tale of woe and despair, you came knocking at the wrong door. Instead, allow me to highlight the comic opera that unfolded when Fitch Ratings, in its infinite wisdom, decided to downgrade the U.S. debt rating from AAA to AA+. If you’re taking this “historic” event seriously, I suggest you recalibrate your funny bone.
I remember a time when credit ratings were based on economic strength, fiscal responsibility, and the ability to repay debts. Today, it seems, all you need for a downgrade is “a steady deterioration in standards of governance.” The last I checked, our governance issues had not hampered our ability to pay bills. Perhaps Fitch is mistaking us for a different country?
Fitch, in its apocalyptic pronouncement, stated that the January 6 insurrection was a significant factor in the downgrade. Somehow, they failed to acknowledge the resilience of the American economic system that continued to flourish despite the tumult. Surely, that oversight was merely an accident.
It’s quaint how the U.S. markets responded with the predictability of a poorly written sitcom. The Nasdaq had its worst day in five months, the Dow closed down a full point, and the S&P lost 1.38%. Japan’s Nikkei 225 also had its worst day of the year. In the immortal words of Chicken Little, “The sky is falling!” Or, as I like to say, “The joke just keeps getting better.”
Let’s step back from the hysteria and appreciate the absurdity of it all. Here we have an economy robust enough to weather a global pandemic, political upheaval, and the rise and fall of Bitcoin, yet we’re supposed to quake in our boots at the prospect of a downgrade? Please, pass me another cocktail and a side of sarcasm.
Our “downgraded” economy, for those with short memories, just experienced an earnings season where approximately 82% of S&P 500 companies beat expectations. Yet we’re somehow losing sleep over the rating company’s bedtime horror story?
Meanwhile, CEOs like Jamie Dimon of JPMorgan Chase are dismissing the downgrade as “ridiculous.” And he’s not wrong. It’s like telling LeBron James he’s been downgraded to a mediocre player because he missed one free throw. Ridiculous, indeed.
As for the “nationally recognized statistical rating organizations,” they hold no monopoly on wisdom. After all, these are the same companies that gave overly rosy ratings on complex mortgage products that turned out to be, in Dimon’s words, “hot garbage” during the 2008 financial crisis. What they’re serving us now seems suspiciously similar.
So, dear readers, let us raise a glass to our newly “downgraded” economy. It’s an economic powerhouse that keeps churning out success after success, no matter what headline-grabbing farce the rating agencies throw at it. Remember, sometimes the joke isn’t on the punchline; it’s on the people who take it too seriously. Cheers!