Treasury Officials Meet With Financial Bloggers

Taking its cue, perhaps, from the Obama Administration's reported efforts to reach out to the political blogging community in the hopes of cultivating broad support for its ambitious agenda, the Treasury yesterday organized a meeting between various Department officials and a group of economics and finance bloggers.

Among the bloggers who attended the "discussion," which centered on financial reform, the Treasury's efforts to stabilize the financial system, and the challenges ahead, were the publishers of Naked Capitalism, Interfluidity, Marginal Revolution, Kid Dynamite’s World, Across the Curve, Accrued Interest, The Aleph Blog, and Financial Armageddon (one of my two blogs).

While Naked Capitalism's Yves Smith has done a good job in "Curious Meeting at Treasury Department" of summing up what transpired -- which, admittedly, left most of us feeling like we had more questions after it ended than when it started -- I did learn a few things at the gathering that I found particularly interesting:

• In response to a question about what would happen if, as Carmen Reinhart and Kenneth Rogoff have concluded about past financial crises, the current episode also proves to be a "protracted affair," it wasn't clear that there was a "plan B" in place if things don't recover in 2010 as many mainstream analysts expect. In fact, the suggestion from one official was that the tenure of the current crisis would likely be nearer the shorter end of market expectations.
• There was also a bit of a disconnect between the remarks Treasury Department officials have made in public forums and what was said at the meeting. Last Thursday, for example, Bloomberg reported that Secretary Geithner spoke to the Economic Club of Chicago and said, “You can say now with confidence that the financial system is stable, the economy is stabilized....You can see the first signs of growth here and around the world.”
  
  Yesterday, however, a number of those who attended clearly acknowledged that things could (still) go wrong and said such fears kept them awake at night. While that is not unusual in and of itself, at the very least it adds to doubts I and others have had about the true state of the banks, the financial system, and the economy.
• The meeting appeared to confirm the strong grip that Wall Street has on the levers of legislative power. In response to a throwaway remark by one of the bloggers present that discussions about the overly large size of the financial sector relative to the real economy were "not politically correct," one official suggested the reality was just the opposite, and that a substantial majority of the public agreed with that assessment.
  
  If you take that together with the assertion that the Treasury -- and, by extension, the Administration -- is fully committed to financial reform, as well as the fact that the Democrats dominate Congress, the implication is that other forces -- namely, the moneyed interests and their lobbyists -- are standing in the way of necessary change. Nothing new there, I guess

 

Follow Michael J. Panzner on Twitter: www.twitter.com/mjpanzner

Comments

[GetAbike]

Did anyone ask, "what about the toxic assets that are still on the books of the financial institutions? Are any of these bailed out banks solvent?"

[satyriasis]

It is clear to me no reform of any kind in the financial sector will occur. We should have had a total depression. That was the only way things would truly change as much as I hate to say it.

Or when Wall Street was in trouble we should have nationalized the banks like many brilliant economists said. You know the guys that predicted this mess. By nationalizing them we'd neutralize their political lobbying activities completely. So while we restructured them we'd be free of threats from the legislative reform side of the battle. Now they're using our money to block reform and creating the conditions for another massive collapse.

[Billl]

We were all caught up in the dreams for change as we were mesmerized by Barack Obama.

We optimistically visualized him as a messiah striding over the waters to correct the injustices that we have suffered from our political systems along with abuses from financial, energy, and health care industries.

We craved salvation.

Barack Obama still talks the talk.

He has a long way to go to walk the walk.

While President Obama, who we elected, continues the mesmerizing banter, the unfair strangle holds controlled by those abusing us are being wrapped tighter and tighter.

Where is the charismatic messiah we thought we elected?

[joebaggadonuts]

If you thought you were electing a messiah, you are the one with the biggest disconnect from reality problem. Obama is human. So are you and I. We can, if we work together toward a common destiny of betterment, achieve that aim. If you want to sit back and let someone "save" you, good luck with that.

As for Michael Panzer here, Thanks, Michael for bringing us some insight into what for us would otherwise be a closed door meeting. Sounds like they are as concerned as we are that things work out for us, and as scared of the financial banksters as they should be. All I can say is it is a good beginning, but it seems we have a long way and many difficulties to overcome before we get to solid ground.

[sonofsamphm1c]

Your guy, John McCain, is a United States Senator.

I supported Obama from about as far back as one can go and I have never felt or said or believed any of the nonsense you just wrote.

[niblik]

I have yet to see any Progressive or member of the Democratic party use the "messiah" label for our President.

The only people I see use it are the posters that aren't interested in debate, discussion, or facts.They are only interested in one thing: the destruction of any policies supported by the White House.

So take off your thinly veiled "demo" mask, you aren't fooling anyone.