Market Talk

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Financial bloggers have gained a loyal readership and considerable clout during the crisis of the past year. Their prominent role in shaping opinions came into particularly sharp view at a recent meeting.

A group of eight financial bloggers met in Washington on Nov. 2 with senior Treasury officials, including Secretary Tim Geithner. Treasury officials said they organized the two-hour meeting because they recognize the increasing influence financial bloggers have on public opinion and feel it is better to embrace rather than ignore their critics.

The gathering, the first of its kind, represented a milestone in the rise to prominence of the blogosphere. It shows that bloggers are being taken seriously by decision makers, and that kind of access could enhance their credibility among a wider group of readers.

The bloggers in attendance welcomed the opportunity to meet with Treasury officials. However, some expressed concern that their current readers could lose faith if they think the bloggers’ views have been compromised. One blogger admitted after the meeting that he felt sympathetic toward the same policy makers he often criticizes and worried he wouldn’t be as tough on them in the future.

Financial bloggers–a diverse bunch that includes professors, money managers, economists and former public officials, among others–have been gaining prominence analyzing the financial crisis and ensuing recovery, critiquing virtually every move by the government. Several bloggers have developed cult-like followings as a growing audience of readers has drifted to alternative media outlets.

Andrew Williams, a Treasury Department spokesman, said the invitation to meet with bloggers was part of the Obama administration’s continued outreach efforts to keep the lines of communication open with several influential groups.

“We’re trying to open a dialogue and get an opportunity to represent our point of view,” he said. “It’s important to get in front of our critics as well as our supporters.”

For bloggers, the agenda was obvious.

“Talking to the blogosphere is a way to try to control the message,” said Yves Smith, author of naked capitalism and one of the bloggers who attended the meeting. “It’s not that they care about our opinions. It’s propaganda; there’s no question about it.”

The meeting helped Treasury officials gain a greater understanding of what bloggers are trying to accomplish in their writing, while bloggers were able to see a side of some top-level administration officials that isn’t usually portrayed to the public, according to David Merkel, chief economist and director of research at Finacorp Securities and a blogger who attended the meeting.

Whether these bloggers, who certainly aren’t ones to hold back their disdain on controversial issues, start altering the tone of their writing remains to be seen.

“The mere invitation made me more favorably disposed to policy makers,” wrote Interfluidity blogger Steve Randy Waldman after the meeting, while acknowledging he refused to eat cookies that Treasury officials offered merely out of principle. “Although the format of our meeting did not lend itself to forging deep relationships, I was flattered and grateful for the meeting and left with more sympathy for the people I spoke to than I came in with. In other words, I have been corrupted, a little.”

Tom Graff, managing director at Cavanaugh Capital Management in Baltimore and a blogger who attended the meeting, said he would welcome using the meeting as a stepping stone to cultivating relationships with Treasury officials in the future.

If bloggers had better access to policy makers who could confirm or deny different topics or theories, it would improve the blogosphere’s credibility by allowing for more legitimate instead of speculative writing, he said.

But that doesn’t mean he plans to sacrifice what he writes in order to garner more favor among government officials.

“I’m not going to poison my writing just on this pie-in-the-sky idea that I’m going to be Tim Geithner’s buddy,” Graff said.