QUESTION: When is an attack against the Federal Reserve Board not an attack against the Federal Reserve Board?
ANSWER: When it's waged by the Carter White House.
That's the latest assessment of the current dispute over monetary policy in the wake of last week's barrage of front page newspaper stories about a step up in the Carter administration's attacks on the Federal Reserve Board.
The Washington Post(and several other major newspapers) carried an article on Friday reporting that the White House had posted a notice criticizing the board's recent credit-tightening-a move it interpreted as intensifying their dispute.
The story-and the interpretations-were understandable. The move was unusual by any measure and, taken in context the posting of a notice, seemed like an intensification of the battle. And officials made no move to deny any shift.
The problem was, it wasn't what the White House really intended a situation that clearly left top officials embarrassed and in a tight spot-the morning that the articles appeared.
Charles L. Schultze, chairman of the President's Council of Economic Advisers, telephoned Federal Reserve Chairman Arthur F. Burns on Friday to apologize for the incident.
"We're sitting here with egg on our face this morning, and it's nobody's fault but our own," lamented on White House official involved in the fracas, "I know it's hard to believe we did it-but really, we did."
What happened, according to White House sources, was a series of apparently innocent-but potentially serious-blunders.
One the regular correspondents covering the White house had asked a routine question about monetary policy a few days before the notice was posted and was given an innocuous reply by a deputy presidential press secretary.
Ordinarily, nothing would have been made of the incident. Most press secretaries's pronouncements about monetary policy are bland and meaningless. And reporters basically accept that the subject requires more expertise.
But Carter administration officials weren't satisfied with the press officer's response, and-in an effort that otherwise might have been applauded-sent the query on to Schultze for a more expert reply.
Schultze, pressed for time, excepted a few paragraphs on monetary policy from a speech he had made on Oct. 4. and returned them to the press office. It was then that the snafu began.
As any old Washington hand can tell you, statements about monetary policy traditionally are handled gingerly and with some discretion. Previous administrations have been so sensitive they've avoided any comment at all.
But the Carter hands new to the ways of the capital blithely posted the Schultze memo on the press room bulletin board-a conspicuously public forum usually reserved for such pronouncements as what necklace the First Lady wore.
Reporters naturally took the brazen action as a pointed stepup in the White House campaign against the Fed's recent monetary tightening. And embarrassed officials naturally kept quiet-rather than admitting a blunder.
by the next afternoon, worried money mangers were phoning all parties concerned to decipher what the White House had in mind. "Surely this must have been cleared by the President," one said. "How far does he plan to go?"
White House officials insisted later they'd had no intention of stepping up their disagreement with the Fed when they wrote the memo. "We certainly wouldn't retract it," one source said, "but it wasn't designed to add to the fray."
Meanwhile, the White House is keeping a low profile, and acknowledging that, as one official put it, occasionally Arthur burns. "You live and learn," confessed one embarrassed Carterite. Unhappily everafter.