Readers may wonder why I haven’t written about my visit on Monday to the Treasury, but truth be told, I headed out afterward with Mike Konczal and Steve Waldman to get a drink, and we all looked at each other quizzically. I said something along the lines of “I’m not certain there is anything to write about,” and they nodded in agreement. I had less than a half page of notes.
That isn’t to say we didn’t spend nearly 2 1/2 hours in a high-ceilinged conference room, and that we didn’t engage with Treasury officials, including Timothy Geithner, in what looked like conversation. But the assumptions of both sides re process as well as substance were so far apart that it often felt like we were talking past each other.
One part of the dynamic was the home court advantage the Treasury enjoys. This is their drill, their offices, they no doubt used their spiel on others and have it pretty well debugged, and more important, they play well off each other (they give the impression of having good rapport with each other; there was some banter on their side). So they have message discipline and stay unified and still manage to look relaxed and informal. By contrast, we seven bloggers (the others were Tyler Cowen, Alex Tabarrok, Phil Davis, and John Lounsbury) were on hold in the very large corridor till the conference room cleared up, which meant we didn’t even have the chance to ask each other, “And what do you want to ask about?” Our interests were likely to be (and were) somewhat divergent, but it would have been nice to know to what degree.
Despite our heterogeniety, we all took a skeptical posture towards the Treasury team. One has to think they anticipate that, which then begs the question of what they expect to accomplish with these meetings. We aren’t journalists, so the access card does not work; the infrequency and format of these sessions means they don’t build personal rapport (and there are good reasons why not; from our end, it costs time and money to go to DC; from their end, we aren’t important enough to warrant more frequent contact).
So they may have other motivations, but a safe assumption is that they regard this as marketing, and a famous cliche is “50% of what I spend on advertising is wasted, I just don’t know which 50%.” We probably look like part of the wasted 50%, but they can’t be certain, and the costs to them of having this sort of meeting are low, so they might as well keep the experiment going.
In the last session I attended (November), one consultant (Lee Sachs) and one official (Assistant Secretary for Financial Institutions Michael Barr) made presentations, which did provide some focus. This time, Barr (who was even more Midwestern earnest than last time) threw the session open to questions from us, and quickly got a complaint (repeated in various forms over the meeting) that the Treasury had done a poor job of explaining what its goals had been for financial regulation and what the finreg bill stood for.
We’d ask questions (usually too long and complicated), they’d offer replies which were sorta responsive but not really, in that the kept stressing what had been done and why that meant the banking system was much safer (higher capital requirements, living wills, central clearing of “standard” derivatives), and we weren’t buying it, but our pushback (predictably) went nowhere.
The most revealing bits were the asides and the use of language (for instance, the first remark on housing included a mention of renters; the fact that they see this as a group to be concerned about suggests the officialdom will be loath to do too much for homeowners, hopeful analyst reports from the Street to the contrary). One interesting set of exchanges involved regulatory authority. Steve Waldman and Tyler Cowen both made articulate cases (Tyler from remarks in the meeting, Steve from pattern and practice) that there was good reason to doubt the authorities would use their clout; there was no effective reply because none could be made (it basically boils down to “trust us”).
One bit I am still puzzled about is the amount of time Geithner spent with us. He is famed for keeping a tight schedule, and he showed up at 4:30 PM and stayed 50 minutes, which was 20 minutes beyond the official meeting close. Although the Treasury staffers who had run the session before arrived Geithner were articulate and knowledgeable, he is particularly adept in this smallish meeting format and seemed to noodle our questions enough so that his responses were typically more direct yet managed to incorporate a lot of thoughtful nuance (not that he didn’t avoid certain issues, mind you; he argued that Treasury had limited authority on a certain issue; I pointed out ways in which Treasury more than enough leverage to bring a bank to heel; he avoided acknowledging the matter I raised; more on that in due course). He did make some minor disclosures (like saying he wasn’t supposed to talk about Fed policy, then doing just that, hinting that the catfood commission might recommend changes in taxes, which in context might mean more consumption taxes, as in a VAT).
I could try to reconstruct in more detail who said what to whom, and I’ve avoided reading other posts on the meeting (I’ve been told Alex Tabarrok posted right away and have seen the headlines for John Loundsbury’s posts). But I’m not sure I can reconstruct them, and more important, I’m not certain what (or more accurately, whose) ends it serves.
Finally, one reader did tell me Alex Tabarrok got some comments criticizing him for falling into Treasury’s orbit by meeting with them. While in theory one could lose one’s edge by staring the opposition in the eye, sports teams do this as a matter of course. If we saw the staff of the Treasury more often and we had something to gain, that could be a concern, but these sessions take a lot of time, and I question what the upside for bloggers is. The immediate one is getting one’s nose inside a new tent, but that is a matter of novelty and wears off after the first encounter. I suspect the main effect is that we and Treasury each sharpen our games a teeny bit by engaging directly on points of contention.