Evaluation’s contribution to the economic disaster

Investment ratings by the big three rating companies (Moody’s, Standard & Poors, Fitch’s) are supposed to be the independent evaluative data that provide potential investors with a sound judgement of where to best put their money. Turns out, though, that Moody’s gave high ratings to AIG just before they were bailed out by the US government, and to Lehmann Bros just before they declared bankruptcy. Also turns out that Moody’s (and the other raters) receive big bucks from the companies they are rating, giving at least the appearance of less than independent evaluation and more cynically giving the appearance that companies buy ratings. Moody’s, on the other hand, blames rogue employees diverting attention from these pecuniary relationships. While there may be some incompetent or unethical evaluators at Moody the suggestion this is a one-off diverts attention from the very fundamental connection that exists within our society between capital and goodness. In his article Blowback (American Journal of Evaluation, Vol. 29, No. 4, 416-426 (2008)), Ernie House illustrates similar entanglements in the drug industry, where the appearance of good science masks profit making.

When good becomes synonymous with profit (which is what happens in neo-liberalism) then evaluation CAN serve the profit making (or the ideology that prizes profit making) which becomes the indicator of good. Evaluation no longer gets left to evaluators ~ the drug industry funds its own clinical trials and the capitalists fund their own rating systems to support their end goals. This scenario creeps into educational and social programming evaluation and should set off alarm bells.

It may be a little comforting to see the value of Moody stock dropping.

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