Doublethink on triple-A
Which politician, holding a senior frontbench economic position, made the following sensible observation
I remind you that Lehman Brothers, the collapse of Lehman Brothers, which started this global financial crisis, on that very day, they still had a AAA credit rating. What does a AAA credit rating really amount to? What I’m saying is you can’t place enormous store in the rating agencies. They do get things very badly wrong, and they totally missed those major firms and economies that were driving and the reason for the GFC.
Unfortunately, the same one who said only a few months ago that our
commitment to returning the Budget to a real surplus in a timely fashion and retaining Australia’s AAA rating is paramount.
Answer over the fold
Andrew Robb, Shadow Minister for Finance, Deregulation and Debt Reduction
It’s sensible to aim for a budget surplus, properly defined, in good economic times, and a high credit rating has some benefits, but the idea that these should be paramount targets is the kind of nonsense, dominant on both sides of Australian politics, that we could do without. Measures of budget balance and debt should be policy instruments, used in the management of the economy, not targets, let alone “paramount commitments”. Unfortunately, Robb’s silly statement putting the AAA rating as a top priority passed without notice, while has entirely valid observation about the uselessness of such ratings has been the target of vigorous criticism.