Bloggers @ Treasury

March 8, 2010
last time round (David Merkel, Tyler Cowen, Yves Smith, Steve Waldman, John Jansen, Michael Panzer, Kid Dynamite) were absent this time.

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Treasury had its second big blogger meeting today, where Tim Geithner and other Senior Administration Officials (sorry, ground rules) fielded questions from a group of bloggers* which tilted heavily towards the newsier end of the spectrum. The Center for American Progress was there in force, as were the Atlantic and the Huffington Post; the less corporate bloggers from last time round (David Merkel, Tyler Cowen, Yves Smith, Steve Waldman, John Jansen, Michael Panzer, Kid Dynamite) were absent this time.**

I can’t quote what anybody said, even anonymously, but I can tell you that the message from Treasury was that financial reform is not dead in the Senate, and that in fact on some matters, including derivatives reform, there’s real hope that the Senate can put something together that’s even stronger than what the House passed. I’ll believe it when I see it, but the general idea seems to be that so long as something gets out of committee, the final bill might actually have some teeth.

Have we reached the point at which we’ve wasted our crisis? The official Treasury talking point is that we haven’t, and that there’s a window of time through the end of this year in which there’s still some political urgency left; after that, passing something strong will get harder. Again, I think they’re just trying to make the best of a bad situation — that we’re still months away, in a best-case scenario, from a bill actually reaching the president’s desk, and that by then (fingers crossed) the crisis will be more of a distant memory than ever.

I did ask about credit default swaps, in the light of the latest moves by European governments to place blame derivatives and speculators for their debt woes, and got a pretty encouraging answer: it’s pretty clear that Treasury reckons debt woes should be addressed with fiscal measures, and doesn’t think much of banning naked CDS or anything like that.

HuffPo’s Shahien Nasiripour was on great form, and seemed to be much more on top of the Treasury brief than most of the officials we were talking to. He asked a great question about people walking away from their mortgages, and was told that no one in Treasury would ever officially countenance such behavior — but I did get the impression that the actual human beings there, in their personal capacity, might not necessarily agree with the official view. The answer was more “we’d never say that people should walk away” than “we don’t believe that people should ever walk away”.

There was also a little bit of talk about the higher capital requirements for bigger banks. That’s not part of the financial regulatory reform bill, because Treasury already has the authority to implement it unilaterally. The idea is that the exact requirements will be decided upon by the end of this year, in consultation with the G7, and that they will then be phased in over 2011 and 2012, coming into full force in 2013. There’s no real indication of where they’re going to be set, just that they’ll be more stringent than the requirements currently in place.

More generally, I came away with the impression that life at Treasury is not much fun, on a day-to-day basis, and that the stresses of trying to set economic policy in the face of strong opposition from both the banking lobby and the Republican party are wearing on the officials there. And I also came away with a photocopy of John Cassidy’s piece on Geithner in this week’s New Yorker: each of us got given it as some kind of Treasury party favor.

Josh Green has a big Geithner profile too, and now Treasury was inviting us bloggers in, and then there was that Vogue piece — there does seem to be some kind of PR offensive going on. But I’m not nearly enough of a Washington insider to hazard a guess as to who’s responsible, or why they might be doing it. But I’m sure it’s going to be a topic of conversation at the post-meeting dinner.

*Daniel Indiviglio, Megan McArdle, Matthew Yglesias, Patrick Garofalo, Amanda Terkel, John Aravosis, Faiz Shakir, John Amato, James Kwak, Duncan Black, Sam Stein, Shahien Nasiripour, Ryan Grim, David Kurtz, Tim Fernholz, and me.

**Update: It turns out that this was a deliberate policy: no one who came to the last meeting was invited to this one. James Kwak, Megan McArdle, and I all for various reasons couldn’t make the last one, so were invited to this one. But Treasury has a somewhat weird policy of “maximizing touch” and therefore not repeating any blogger.


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