So what will Mattiello find when he meets with these guys? I
predict he will find earnest, intelligent, kind, and solicitous people. They
will make sympathetic noises about the awkward plight of our poor state and the
unwise choices made by our previous governor and speaker of the House.
They will understand immediately the ramifications of our
difficult position. But they will point out all the worst-case scenarios,
because they are also people who believe very strongly that the end of
western civilization will be nigh if a state is allowed to renege on a
commitment they imagine it to have made.
There are times when personal contact is misleading. After all,
the earnest, intelligent, kind, and solicitous people he will meet represent
agencies that are deeply corrupt, in the pay of the banks whose bonds
they rate, constantly trying to curry favor with the very institutions they are
supposedly there to police, while abusing the powerless. There have been
virtually no changes to their business model since that very business model led
our financial markets to the verge of collapse in 2008.
If Mattiello was in search of actual answers to actual
questions, he would do far better to spend time interviewing the bond buyers
for the insurance companies who hold most of our state’s bonds. Those are the people whose opinion will actually
be important, because those are the people who actually give us the money we
need to borrow.
I’m more interested to know whether they are capable of reading
a bond prospectus and understand the difference between a general obligation
bond approved by the voters and a bond that says all over it that it is not
such a thing.
There is a class of questions out there that cannot be answered
by asking them. I learned years ago, for example, that I cannot learn whether
today is opposite day by asking my daughter. If it is opposite day, she will
say no when I ask, and if it is not, she will also say no. I have to think of
another way to answer the question. There’s a lovely discussion of exactly this
point in Snow et al’s 1991 book, “Unfulfilled Expectations: Home and School Influences on Literacy“,
where the authors speculate about the futility of having well-dressed Harvard
education researchers with clipboards ask poor mothers how many times a week
they read to their children.
Here are some other questions whose answers cannot be found by
asking:
“Hey Mr. Rich Person, will you leave the state if we raise your
taxes?”
“Hey Mr. Business Owner, will you bring jobs back to this state
if we lower your taxes?”
“Hey Mr. Bond Rater, will you leave our state bond rating alone
if we let an independent agency default on its bonds?”
Incalculable damage has been done to our state by people who
imagine that the way to answer questions such as these is simply to ask them
directly and take the answers at face value. (Typically by people who will then
call me naive.)
The public nature of Speaker Mattiello’s trip, and the people he
intends to visit and to hear imply that what is going on here is not actually a
fact-finding trip, but Kabuki theatre, the beginnings of political cover for
making the unpopular decision to give in to the threats and repay the bonds. If
true, this is unfortunate. Perhaps we can only hope that somehow weak knees
will ward off the tax-cut fever that I hear is infecting the back rooms of the
House this past month.
Tom Sgouros is a freelance engineer, policy analyst, and
writer. Check out his new book, "Checking the Banks: The Nuts and Bolts of Banking for People
Who Want to Fix It" from Light
Publications.
