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Unlike Rip Van Winkle, the legendary character by the American author Washington Irving, who woke up from a twenty year sleep and was shocked to see a changed world, the modern day version, the US credit rating agency Standard and Poor’s, is sending the world economy in to a tail spin. The question is why the whole world has to pay for someone’s inaction?

The S & P’s faulty down grade of the US credit rating to +AA status, among other things, is attributed for the current world financial turmoil illustrated by the leading headlines of this week:

Stung by the first-ever downgrade to its top-notch sovereign credit rating, the US has hit back at S & P, saying that the rating agency's flawed analysis has put its own credibility and integrity at risk. 

S & P is not the lone Rip of the Global Economy who creates turmoil by ill conceived and un substantiated adverse remarks on nation’s economies. The Comptroller and Accountant General of India has recently come out with reports claiming losses of USD 39 billion to the government in lost licence revenue, which has been misinterpreted by the Indian masses as government corruption of the same amount, stalling India’s growth.

The question is why these agencies have gone in to long slumber of inaction while things were definitely going astray and why they have to get the figures and facts so wrong when they eventually chose to proclaim their shocking revelations.

The crucial thing is, with the globalisation, the damaging effects are no more limited to countries but the whole world. With these watch dog agencies being allowed to act independently or just constitutional set ups with out any answerability to anyone, time has come to decide if they can be allowed to continue to function in the same way or at least operate under guide lines to contain or limit the damage arising out of sentiment erosion and confidence deficit caused around the world.

It is very consoling to see that stalwarts of Capitalism like Warren Buffet have come forward to defend the US Economy, despite the echoes of pessimism emanating from
Competing economies like China.

What is giving concern though is the appalling lack of comprehension of the situation and the apathy shown by the current bunch of leaders of the developed world, like may of the EU nations who have chosen to enjoy their summer holidays without resolving burning issues in Italy and Spain, which smacks of Nero’s playing of his fiddle while Rome was burning.

The protracted congressional drama over the credit limit, which appeared to be plain partisan electioneering for all thinking people, which precipitated the current action by S & P has demonstrated a similar apathy of the US leadership.
Can we afford to let our leaders to be Rip Van Winkles in their elected positions? I guess the way the world markets will react on Monday will decide.

Article first published as Who Can Make The Rip Van Winkles of Global Economy Accountable? on Technorati.

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