Also, Krugman's solution doesn't resolve the issue that most large securitized credit offerings like the big MBS deals that got us into trouble, ALREADY get rated by more than one, if not all, of the agencies, so it isn't picking the agency where a lot of the corruption occurs.  It's that there are costs and professional risks involved for any analyst and his or her employers, past, present, and future, in making a prediction that deviates too much from the common wisdom or expectations of the day. Look at the outrage and accusations of political manipulation that occurred when the agencies downgraded Irish debt, for example.  People can get fired or are otherwise punished for rating something bad that turns out to be good (and lots of times probably should be, just like doctors who operate when something less dangerous could have been done), so they tend toward status quo.