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German politicians make war on truth

Europe declares war on rating agencies - Telegraph.

Do Wolfgang Schauble and Heiner Flassbeck understand what they are saying? They want to "break", "dissolve" or "ban from rating countries" the independent agencies investors rely upon to rate investment risk.

Is this what Chancellor Merkel meant when she asserted the primacy of politics over economics?

If independent sources of information are suppressed, you arrogant fools, investors will not simply assume that your assessments of risk are correct. They will find other reliable data or they will assume the worst. Frankly, a politician furiously demanding the suppression of independent data sources is the best evidence yet that the EU bail-outs will not work.

Independent rating agencies, though they have erred (as all humans - with the apparent self-exception of German politicians - must) add to the overall value of financial assets by making risks more transparent and allowing comparison of rival investments on a consistent basis. Risks which are obscure must be priced on a worst case basis, diminishing value.

Germany's politicians are out of order here, and dangerously so. Not least when they indulge in such racial epithets as "anglo-saxon" to attack their perceived enemies. As a group, German politicians are ill-advised to raise the spectre of national stereotype.

h/t Samizdata, which makes the chilling point, in this context, that so far from being doomsayers, the rating agencies have a track record of undue optimism. Think about that, Wolfgang, as you bark your deluded orders to your imagined army.