Why Treasury briefings are off the record

By Felix Salmon
August 20, 2010
Shahien Nasiripour has some excellent detailed notes from the Treasury blogger meeting. And he doesn't hesitate to call out the senior official when doing so is warranted:

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Shahien Nasiripour has some excellent detailed notes from the Treasury blogger meeting. And he doesn’t hesitate to call out the senior official when doing so is warranted:

The official pointed to the futures market where traders are betting that home prices will remain stable through the fall of 2014.

But there have been just 40 trades all year through Wednesday, said Mary Haffenberg, a spokesperson for the CME Group, which runs the S&P/Case-Shiller Home Price Index Futures market, the market the administration uses as its benchmark.

Meanwhile, Matt Yglesias wishes that the meeting had been on the record:

DC officialdom ought to realize that its obsession with off the recordy-ness has some serious downsides. Treasury did two meetings this week, one that was with professional blogger types and one that was more with professional economists who also blog, and most of the attendees seem to have come away quite impressed. If that’s the case, wouldn’t people able to listen to a recording of the full session likely also be impressed?

My feeling is that the answer to that question is “not necessarily”. Having a meeting with a Treasury official is interesting and worthwhile, although I admit that my mind did wander in parts, when the conversation got too political. Listening to a recording of someone else having a meeting with a Treasury official? You need to be a real wonk to do that, and although you might come away impressed, most people doing it are likely to be on the lookout for some kind of news.

Nasiripour is reporting, for instance, that at this meeting a senior Treasury official “said that home prices will likely decline in the near future” and “argued that taxpayers should continue to prop up small banks due to their exposure to toxic assets”. I don’t recall either statement, but I was neither taking detailed notes nor recording the conversation. It would be great if we could simply go to the tape and report exactly what was said and who said it. But then the news cycle would glom onto the “X said Y” story, in a world where administration officials can get fired if they say the wrong thing.

Putting the whole conversation on background makes it almost impossible to turn the briefing itself into a news event, and that in turn allows officials to speak without worry that their words will end up being used against them in the kind of fevered political-media frenzy which regularly appears out of nowhere and nothing in Washington.

What’s more, Treasury officials in general, and the Secretary of the Treasury in particular, really can and do move markets when they start talking about things like the dollar. There is a lot of value to open conversation, but it’s pretty much impossible to have an open conversation, in public, on the record, with a sitting finance minister of any country, especially when sensitive topics like the dollar or capital adequacy standards are on the agenda.

That’s all in theory; in practice it’s even worse, at least with this Treasury. During the Great Moderation, Paul O’Neill would happily chat away to reporters, on the record; he would occasionally find himself in hot water for doing so, but he was never very important. Politico and HuffPo didn’t exist in those days, but even if they had existed, they wouldn’t have covered Treasury. As a result what O’Neill said never really mattered that much. Plus, he liked engaging in wonky Socratic dialogue with FT reporters.

When Barack Obama picked Geithner over Summers for the Treasury job, he knew he was getting a buttoned-down technocrat rather than a natural debater and schmoozer. And Geithner learned his lesson early on: first in the nomination process, when he caused a storm on the subject of whether China was manipulating its currency; and then with his hugely-anticipated speech on the financial stability plan, which contained no real detail or concrete proposals, and which looked dreadful on TV, and which sent markets tumbling. Since then, Treasury has simply understood that it has to be very careful about exactly when, where, and how it says things in public.

I’m a reporter; I naturally want as many things to be on the record as possible, and ideally to be able to link to them directly online. I also think that it’s important for news organizations to be much more transparent than they are at present about the degree to which they’re meeting and talking to the most senior administration officials — Obama, Geithner, Bernanke, Biden, Clinton, Gates. We don’t need to necessarily know what these people are saying in those conversations, but it would be a step in the right direction if news organizations simply revealed that the meetings were taking place.

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Comments
One comment so far

Dude, having anybody from treasury department talk about the true health of the economy is liking having the bank CEO where a public company holds its accounts talk about the cash reserves status every quarter. They are the only people within HUNDRED (100%) proximity of truth and their words, any time, can have dramatic effect.

The real world needs only the speculators talk ( with partial knowledge) so that there are plenty of gambling opportunities, which keeps everybody alive and on toes.

But it is fun dreaming about the ideal world. Dream on!

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