Stop the coalition talks: the rating agencies are about to pronounce
Forget whether a Lib-Lab pact is a good idea or not. That’s not important any more.
The banks have pronounced which party they want to govern us, and the Credit Rating Agencies are preparing to tell us who’s really in charge
An alliance of the Labour and Liberal Democrat parties to form a British coalition government would “almost guarantee” a credit downgrade, BNP Paribas SA said, recommending investors sell the pound against the dollar.
A cut in the rating is likely “since both parties agree that early expenditure cuts could harm the economy,” a team at BNP Paribas led by London-based Hans-Guenter Redeker wrote in a research note today. “A Labour/Liberal government is the least- liked option by markets.”
You know, I really don’t know why we bothered with an election.
I predict this will be all over the Tory media within an hour.
I find it amusing how nobody is taking these pronouncements at all seriously. The ratings agencies can join the Murdoch media on the list of losers in this election.
That said, I don’t expect a Lib/Lab coalition – there are already enough Labour MPs on the record as opposing it (and ruling out cooperation with the SNP) that it would be almost unworkable. If the Tories hadn’t managed to sneak Richmond Park, Oxford West & Abingdon and Camborne & Falmouth from the Lib Dems and a whole bunch of fairly narrow marginals from Labour, it might have been a very different picture, as even a few rebels might have been tolerable, or cooperation with the SNP unnecessary.
On their own, announcements such as these won’t be taken seriously by a lot of people, because the ramifications directly conflict with self-interest and collective self interest for the working class. But these will undeniably be used by the Conservatives and others as building blocks of an economic narrative that Labour is bad for ‘the economy’, of which, in Tory speak, we all partake equally and should thus all sacrifice for equally.
Faced with a Tory government, and further attacks on the institutions which can express the collective self interest of the working class, and thus a reduced feeling that they can do anything, people will take more notice – whether it be of the credit ratings agencies specifically, or the more populist utterances of Dick Lambert and co.
With respect, I think you’re showing too much deference to these para-market institutions. I think they’re as discredited and irrelevant now as, say, nationalised industry was in the 1980s. The hard-of-thinking may still trumpet the pronouncements of zombie institutions as if they’re meaningful, but I don’t think most people care any more. The combination of blank stares, mockery and outright hostility that has met the Tory scaremongering on “the markets” has been striking.
I must admit, I can’t fully explain my opinion here, but the idea of listening to Moodys for advice on forming a government seems like something from a bygone (and not much-lamented) age.
I can’t imagine it seems the same to the people actually responsible for investment, or indeed to those political leaders who look to the market as their lodestar (theoretically at least) – and such leaders are far from a dying breed.