Hank Paulson bets on George W. Bush
By TigerHawk at 5/30/2006 05:19:00 PM
It is long past news that John Snow has resigned, and that President Bush has tapped Goldman, Sachs CEO Hank Paulson to be Secretary of the Treasury. See Cardinalpark's personal take below.
After reading Cardinalpark, it isn't surprising that George W. Bush wanted Hank Paulson to take the job -- he is an excellent choice even if he did go to Dartmouth -- but it is surprising that Paulson took the job. Why is he giving up $30 million per year so that he can jump on to an allegedly sinking ship? It seems to me that there are four possible answers. First, perhaps Paulson does not think that the Bush administration is as lame as the received wisdom believes it is. He thinks he can be part of the team that turns it around. Second, regardless of the prospects for the Bush administration, perhaps Paulson believes that this is his most direct route to a career in politics a la predecessor Jon Corzine. A distinguished career as Secretary of the Treasury could lead to all sorts of interesting opportunities in 2008 or 2010. Third, perhaps the senior players at Goldman pushed just a bit, each hoping to move up in power and income during the inevitable post-Paulson reshuffling of the deck. Thirty million dollars is a lot of payroll to pass around -- perhaps my co-blogger will offer his thoughts on that comment. Fourth, Paulson may just be hankering for a return to the White House. Back during the Nixon administration, he worked as assistant to John Erlichman. Just maybe, Hank Paulson did not want that to be his last job in government service.
Bush Administration Picks New Treasury Chief
By Cardinalpark at 5/30/2006 02:36:00 PM
for whom I once worked. That probably connotes a degree of closeness that overstates the matter (a lot). I am sure he also knew well another colleague of Tigerhawk's. The world is small.
Paulson was always underestimated by his rivals and colleagues. He was a forceful advocate, an excellent salesman and a physically imposing presence. People dismissed him as "not so smart," which he has proven to be remarkably false. They confused his midwestern style and his inability to make a speech as a lack of intellect. Sound familiar? He was a Chicago outsider in a New York business.
Hank Paulson was notoriously inarticulate, and happy to make light of his own public speechmaking. But what was great about him was his transparency, his candor, his willingness to be held to account and his forcefulness in holding others to account. He is a powerful guy, a powerful personality. He will be no shrinking violet. He may make the occasional public speaking gaffe. He has gotten better at all of those things as the length of his tenure as CEO of Goldman Sachs has forced him to improve on these public skills. But it's hard to believe that he won't rival Bush for the occasional malapropism.
On policy matters, he will line up very well with the President. He will almost certainly talk up the dollar, rather than talk it down. He is intimately familiar with China, as he has been a frequent traveller there for business and I bet his Treasury posting bodes well for our interactions with the Chinese. Because Bob Rubin was viewed as a Clinton Administration genius, Bush may benefit from some of the glow Rubin left on the Treasury, since Paulson and Rubin share their Goldman pedigree. But there could not be two more different people, really, that come from the same place, than Paulson and Rubin. Paulson will be a tax cutter, a dollar proponent, a free trade proponent -- all in all, I would say a very strong selection for the Treasury position. He is also a warrior. By that I mean that under adversity, he is incredibly strong. He ascended to the role of COO at Goldman at its worst moment (1994). He then became CEO at a moment of great peril and change (1999 - when the Long Term Capital Crisis and the Russian financial crisis temporarily derailed Goldman's IPO). One other thing - Paulson is a noted environmentalist. He is Chairman of the Nature Conservancy, and an avid photographer of wildlife, especially birds. His position on Arctic Wildlife Drilling will be interesting to see emerge, though only tangentially related to his day job.
One bit of bad news for the Princeton folks who read here - he is a Dartmouth graduate.
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