My new column is up @Going Concern:
They lead a charmed life.
• A government sanctioned franchise to provide their services to the largest global companies.
• Oligopolistic pricing and an annuity-style constant pipeline of business because of significant barriers to entry resulting in a license to print money.
• Historic immunity from scrutiny and litigation based on proprietary methods and models.
• The benefit of inscrutability, making it difficult for media, regulators and legislators to feel comfortable changing the business model.
• The trust and confidence of the investor due to their seemingly independent and objective position in the capitalist structure.
You may think I’m talking about the public accounting industry. We could be. But there’s another industry that enjoys many of the same benefits, including direct payment by the clients whose judgments they are supposed to be independently scrutinizing – the credit rating agencies.
Go here for the rest of the column.