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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (289649)	5/31/2006 7:19:19 AM
From: Road Walker	Read Replies (2) \| Respond to of 1572571

A Secretary for Troubling Times President Bush's nomination of Henry Paulson Jr. to be the next Treasury secretary is a master stroke. A Wall Street investment banker for more than 30 years and head of Goldman Sachs for the past eight, Mr. Paulson will bring much-needed clout, pragmatism and credibility to the job. So, for a change, the question raised by a major presidential appointment is not one of competence. Mr. Bush has even ventured outside his comfort zone in asking a heavy hitter like Mr. Paulson to join his cabinet. America will be fortunate to have someone of Mr. Paulson's caliber join the government. The important questions are why Mr. Paulson accepted the nomination and what his willingness to serve signals about the challenges facing the economy. In the past, the administration has had trouble attracting top talent to the Treasury because its officials were expected to shill for policies that were largely based on ideology and politics, not rigorous economics and sound fiscal practices. At this point, however, Mr. Bush has more or less accomplished — or abandoned — his main economic goals: most of his tax cuts have been extended beyond his term, and he has ditched his ill-conceived plans to privatize Social Security and change the tax code. That means Mr. Paulson will not have to advocate policies that he did not shape, and may well not see in the same stark and simplistic terms that the president does. Instead, Mr. Paulson will be free to focus on America's huge imbalances in trade and international transactions. He may not have much operating room, because the best way to reduce the United States' trade deficit would be to reduce the federal budget deficit, a goal the administration and Congress are not genuinely pursuing. But in the absence of concrete progress on the budget deficit, the government must try to convince America's trading partners and international lenders that it will fix its fiscal house before the global economy forces a fix, in the form of a falling dollar, higher prices and higher interest rates. Because he commands international respect and is not responsible for the policies that got the country to this juncture, Mr. Paulson may be just the person to buy America some time to get back on track. If persuasion doesn't work, the consequences of unchecked global imbalances could range from a slow economic decline to rapid and severe recession. Mr. Paulson would most likely be a steady hand in those situations, as well. Copyright 2006 The New York Times Company