The big news this morning is that President Bush has finally found someone willing to become Secretary of the Treasury to succeed John Snow. The pick is Henry Paulson, head of the prominent brokerage firm Goldman Sachs, previous home of Clinton's Treasury Secretary Robert Rubin. There is no question that Paulson is a man with considerable stature on Wall Street. Indeed, the big question for the commentators on CNBC this morning was why such a person would take the job.
As Bush's previous secretary, Paul O'Neill, so famously remarked in his book "The Price of Loyalty", the Bush Administration is notoriously uninterested in policy as such, just politics. Moreover, the chatter about replacing the hapless John Snow has repeatedly made it clear that the Bush Administration considers the job of Treasury Secretary to be head cheerleader for the economy, and, by reflection, Bush. In other words, someone who could sell the public on the idea that an economy that all but the top 5% experience as unsettling at best and very difficult at worst is really the best there is.
But Paulson is an interesting choice, and the fact that he would take the job is interesting in itself. Paulson is not just a very smart, savvy and successful Wall Streeter. He is also an avid birdwatcher and Chairman of the Board of the Nature Conservancy, and someone who puts his money where his mouth is:
Paulson is chairman of the board of directors of the Nature Conservancy, an Arlington, Virginia-based group that aims to promote environmental diversity and protect natural habitats. He and his wife ``are devoted conservationists,'' according to William Burnham, president of the Boise, Idaho-based Peregrine Fund for birds of prey, which he joined in 1990.
Paulson defended his conservation work at the firm's annual meeting on March 31 after the Free Enterprise Action Fund, a pro-free-enterprise mutual fund, accused him of promoting his environmental concern ahead of Goldman's business interests. Three days later, the firm disclosed that Paulson had just made a $100 million donation to a charitable foundation he established to donate to environmental causes. He still owns stock worth more than $500 million.
In fact, because the Nature Conservancy (albeit one of the more conservative conservation groups) is known to support the Kyoto Treaty and action on global warming, Paulson's rumored accession to the post was criticized by some conservatives precisely for that reason. Moreover, as a person with a solid Wall Street finance background, even if he is a Bush Pioneer, he has to know that the current fiscal policy (all borrow and spend, all the time) is a Recipe for Disaster.
It has been said that Bush needed Paulson more than Paulson needed to be Treasury Secretary. It is hard to believe that a man of his stature, wealth and, apparently, principles, would join this Administration, even in its waning days, if he thought he was going to be just a salesman for a failed and unsustainable economic policy. It will be interesting to see what happens in those legendary cabinet meetings, and whether Paulson is able to bring some degree of sanity to an operation in which so many with ability have failed and so many without scruples have prospered.
And it may show something else. Maybe Karl Rove is more worried about Al Gore than about Hillary Clinton.
I don't buy either that Karl Rove is worried about Al Gore (as if appointing a nominally green-ish SecTreas would make much of a difference in this administration's image) or that Paulson is going to have any material effect on policy of much any sort. This administration's macro policy, its environmental policy, and its lines of authority, are set.
He thinks there's something in it for him, almost certainly something that will make him richer. He may or may not be right, depending on how much of a sucker he's been played for.
They needed somebody -- anybody -- to take the job, and they managed to convince him to do it.
But I wouldn't go looking for any deep meaning here. It's window-dressing, no more.
Posted by: bleh | May 30, 2006 at 13:16
The markets don't seem too impressed--the Dow is down 135 points, although that may have more to do with foreign weakness. Rubin was known for favoring a strong dollar, and some think Paulson will too, although there's probably not much anyone can do at this point.
I do think a smart man with hundreds of millions of dollars and a successful career would have to have a good reason, other than money, for taking a job like Treasury Sec in the Bush Administration.
Posted by: Mimikatz | May 30, 2006 at 14:29
I just wanna know--did this guy talk to Paul O'Neill--or even read his book. Because I can imagine taking the job if I thought I could save the American economy. But that's not going to happen in this administration.
Posted by: emptywheel | May 30, 2006 at 16:16
There could be many reasons Paulson took the job. It could be that he's ready to retire and sees this as one last great line on his resume. Or Paulson could be expectly really bad economic times ahead and thinks (or deludes himself into thinking) that Rover will give him a free rein when disaster hits. Maybe he's being pushed out of Goldman and this is a respectable place for him to land temporarily before he truly retires.
Posted by: kaleidescope | May 30, 2006 at 16:55
I'm thinking Paulson will be an inactive figurehead, getting massages and reading the paper all day - right next to Negroponte.
Posted by: kin | May 31, 2006 at 08:53
The real question is why was John Snow in that job in the first place?
He is either a bald-faced liar, or a buffoon - probably both.
When Snow was presiding over a clear policy of weakening the dollar - in a desperate attempt to boost export numbers, which they are still foolishly pursuing yet today - that chump actually said that a "strong-dollar policy" meant protecting the physical paper currency, against counterfeiting, and he pointed out the new types of paper and inks that the US mint was changing to...blah, blah...
The US Treasury Secretary actually said that.
Perhaps to the uninitiated that might've sounded reasonable, but any economist, businessman, analyst and foreign central banker had to read that as either a base insult, or a terrifying revelation that the person in charge had no bloody idea what he was talking about.
You can argue over whether a strong dollar or a weak dollar is preferable, but it has absolutely nothing to do with a fucking piece of paper.
Oops, my bad - ignorance and incompetence are not reasons for losing one's job in the shrub administration.
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Posted by: Hamed Elbarki | May 13, 2008 at 16:38
Well reading this article dated 2006 and in fact two years ago around this time, yeah at the time it seemed like everything else a good idea, but now we see just another miserable failure the GOP and Bush Administration failed to acknowledge the fact why previous administrations left the dollar the way it is, and now were seeing the results of a weak dollar, I just hope when the 44th president takes office, they can reverse course get us back on track. This almost like a replay of the late 1970s, early 1980s. Only time will tell. I learned a thing while in church, that if mankind does not learn from history, history 9 out of 10 times repeats itself. Too bad people did not vote this bastard out while we had a second chance to in 2004. Well at least he can't run again and it will be interesting to know who runs the country.
Posted by: Thomas Lang | May 23, 2008 at 10:22