Mises Wire

The super state of the European Union is reacting to information potentially undermining their political agenda in the expected way: prohibition, repression, and censorship. The latest move to “save” the economy is not to get the finances under order, as any individual or market organization would have (been forced) to. No, to government the solution is to sweep the problems under the carpet – to pretend they aren’t there. And, of course, to shoot the messenger. Long before he arrives with the bad news.

This is what the European Commission is now doing. While President Obama badmouthed the rating agencies, at least he did not (as far as we know) outlaw rating. But this is exactly where the European Commission is heading: the best way of stopping a market reaction to bad finances is not to avoid bad finances – it is to hide information of the fact. In other words, they propose a “blackout” of credit ratings of troubled European states. It is the typical knee-jerk reaction only governments (believe they) can get away with.