In these poor economic times, there is one endeavor that offers unlimited opportunities for employment: defending the debt-rating companies in court.

It won’t make you popular. But there has got to be a demand for lawyers willing to stand up for Moody’s Corp. and Standard & Poor’s, whose ridiculously high grades for hopelessly risky mortgage-backed securities helped trigger the worst recession in at least a generation.

Because they got it so wrong while claiming to be so good at assessing risk, they have been so sued that they could probably populate a small city with the lawyers it takes to defend them. OK, maybe a neighborhood.

This week Connecticut Attorney General Richard Blumenthal sued S&P and Moody’s, again. Last time, in 2008, he sued those two as well as Fitch Ratings for their two-track system that gave low grades to public debt simply because it was government- issued while giving extra points to corporate debt. Those cases are pending.

This time Blumenthal is complaining about the unreasonably optimistic assessments they handed out to mortgage-backed securities. That helped inflate the housing bubble until the truth popped it, costing billions of dollars to pension funds and other investors. The harm to the economy at large was incalculable.

The ratings companies were pretending to be independent and objective when they were really currying favor with the issuers, who paid them hefty fees and shopped for the most favorable rating, the suit alleges. The firms claimed their scores were trustworthy when they weren’t in the least.

Hiding Truth

Blumenthal told Bloomberg TV the companies changed their methodology, retaliated against employees bent on truth-telling and changed their compensation and compliance plans in their quest for more revenue and market share.

“They buckled under to their clients,” Blumenthal said.

Connecticut joins Ohio, which sued in November on similar claims. And investors, including the giant California Public Employees’ Retirement System pension fund, are suing the agencies and the investment banks involved in selling the securities.

Spokesmen for Moody’s and McGraw-Hill Cos., which owns S&P, told reporters that the suits had no merit and predicted their firms would win in court.

Rating firms have for years claimed a First Amendment shield against such cases, saying that free-speech protections apply to their opinions. And while that has often worked in the past, a federal judge in New York said last September that it didn’t apply to opinions that weren’t widely disseminated. That case is still in court.

Blip or Not

Whether the New York ruling marks a turnaround or turns out to be a mere blip, we will know in a few years.

But even with that victory, investors will have a hard time winning. They have to show specifics about who did what to produce the faulty assessments, precisely how they themselves were harmed and sometimes whether the firm had an obligation to them.

As part of its financial-services overhaul package, the House passed a bill in December that will make it easier for investors to sue rating companies.

The legislation would also require greater transparency, to use the buzzword of the decade, and authorize the Securities and Exchange Commission to write tougher regulations on the firms.

Senate Next

It isn’t a cure-all. And we haven’t seen the Senate version, which Christopher Dodd, Democrat of Connecticut, says he will introduce next week.

And however crucial to overall reform the rating companies are, the hot debate over the larger bill has focused on whether to create a consumer agency and where to locate it. Proposals fly about Capitol Hill to tax executive bonuses at bailed-out banks or to charge fees for securities trades.

But putting the reins on the rating companies? That starts on page 1,034 of the 1,279-page bill and gets scant attention in official analyses of the legislation.

In the meantime, the battleground is the courts. The latest Connecticut suit gets fairly specific.

It quotes a 2004 exchange, in which a senior S&P executive complained to managing directors in the firm’s mortgage-backed securities group about losing a “huge” deal to Moody’s because S&P had stiffer requirements for issuing a high rating.

“We think the only way to compete is to have a paradigm shift in thinking, especially with the interest-rate risk,” the unnamed executive said.

Oh yes. Employment opportunities for securities defense lawyers abound.

Unfortunately, there is no specific law that allows anyone to sue a company for helping trigger a worldwide recession.

But these suits come as close as they can to attempting to hold the rating firms liable for that.

It’s about time somebody did.