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Wednesday, May 31, 2006

Why Did Paulson Take the Job? 

Speculation alert!

Tigerhawk wonders why Hank Paulson would leave Goldman and his $30mm per year CEO job for the Treasury job in a lame duck Presidency. Let me propose a few reasons:

1) He had nothing more to accomplish at Goldman Sachs. Paulson is a very big Bulls/Michael Jordan fan. With Goldman's 2005 performance, Paulson equalled Jordan's championship winning jumpshot in the 1998 NBA Finals against the Jazz. In the 6 years since Goldman's IPO, the stock has nearly tripled. He brilliantly managed the complex transition from private partnership to public company, preserving and probably enhancing Goldman's reputation through a burst bubble and a recession. Goldman's profits are simply extraordinary. He has a Goldman share position worth $700 million. When you are worth that much, you make $30 million per year owning muni bonds. He doesn't need the pay. Besides, with Sarbox and now the options investigations, being the CEO of a public company (even if you have been as incredibly successful as Hank Paulson or Bill McGuire, the CEO of United Healthcare) is unnecessarily treacherous. He's been the CEO for 7 years. He's 60 years old. He is going out on top.

2) As I previously articulated, he is philosophically in tune with the Bush Administration.

3) My impression of Paulson is that he is spontaneous. He didn't seem to have planned his rise, he didn't have a reputation for political maneuvering. And, as I said previously, he ascended at moments of challenge and peril, unafraid to seize opportunities when maybe they didn't look so good at that very moment.

The current decision seems consistent with that history. He didn't work assiduously on behalf of a candidate, in effect seeking the job. The opportunity presented itself, and Paulson understands that it may never again present itself. He probably did not intend to work for a particular candidate in the 2008 election, in the same way that Rubin worked quite publicly on behalf of Clinton. He's 60 now, would be 62 then -- so if he had any interest at all in the position, this might have seemed to him the moment, even if unplanned and imperfect. Battlefield promotion is how you might refer to the situaton, and I am sure that would resonate with Paulson as a concept.

4) I am sure 2 1/2 years in that job is more than enough. Paulson will likely grow impatient with politics. I doubt he did this to set the stage for any sort of run for office. He is not a politician, or campaigner. I can't see it. Physically, he is a bit like an offensive lineman. Sometimes, when he is sitting in the room with an irritating and less than intelligent politician, I am certain he will want to reach across the table, grab the fellow by the lapels and shake sense into him. I just don't see him as a politician.

Besides, that would get him out around the time that the next recession is likely to be looming, and I suspect he would prefer to be headed for the hills by then.

5) He obviously is a believer in public service, and if you are CEO of a financial institution, Treasury Secretary is as good as it gets in public service.

UPDATE: I thought it worthwhile to add another consideration. One of Paulson's mentors at Goldman Sachs was Steve Friedman. Friedman was co-mananging partner with Bob Rubin, and the CEO who elevated Paulson to COO in 1994, upon his departure. Friedman is (or was) the Chairman of Bush's Council of Economic Advisors. Count on Friedman having been critical to Paulson's recruitment, and to assuring Paulson that his voice would matter.

Just a few ideas, not exhaustive.

12 Comments:

By Blogger Bat One, at Wed May 31, 11:25:00 AM:

I wonder if Mr. Bush is perhaps planning another run at either tax reform, or Social Security reform after the November mid-term elections. Paulson is a rather substantial presence to be merely filling a chair at Cabinet meetings.

There is also Mr. Paulson deep comittment to environmentalism to be considered, an area traditionally claimed as a strictly Democrat issue.  

By Blogger Screwy Hoolie, at Wed May 31, 06:00:00 PM:

O/T

Still waiting for that retraction, CP. The yellow badge story is still just as false as the day you claimed it was true.

It's no weakness to admit you were wrong. In fact, it's the only way to maintain any sort of credibility. I will continue to comment on this until you issue some sort of retraction or clarifying statement.  

By Blogger Cardinalpark, at Wed May 31, 06:06:00 PM:

I clarified several times. If Taheri doesn't retract, then I won't. He is standing by his story, and so will I. Furthermore, I responded directly to your counterposts. If graffiti is your game, then I would say you are harrassing.

I think, Screwy, that you and I have ceased having productive debate. When that happens, it is best to stop talking. We understand each other, and obviously have incompatible views. I have done my best to be civilized with you, and frankly I think you've gone off the reservation. So enough.  

By Blogger Screwy Hoolie, at Wed May 31, 08:05:00 PM:

You choose the lie. If someone else tells the lie and stands by it, then you don't have any responsibility?

As if you ever intended a productive debate.  

By Blogger Screwy Hoolie, at Wed May 31, 08:48:00 PM:

LINK
May 25, 2006

In Response To Wiesenthal Center’s Query: U.N. Investigation Finds No Evidence Of Religious Minority Dress Code In Iran

Last week, the Simon Wiesenthal Center asked the Secretary General of the United Nations to investigate a National Post op-ed piece written by Amir Tahiri stating that religious minorities would be required to wear color patches delineating their religions.

A letter received today by Wiesenthal Center Dean, Rabbi Marvin Hier, written by Alicia Barnena, Acting Chef de Cabinet, on behalf of the Secretary General, said: “The Secretary-General, who is currently traveling in Asia, was disturbed by this report and asked me to look into this matter immediately. I have now done so, and an analysis of the law by the United Nations Resident Coordinator in Tehran finds that there are no suggestions or clauses within the law that refer to religious minorities and their dress, or that would support the serious concerns raised in the National Post story.”

“We are pleased that the United Nations is now involved in the matter and has confirmed that the current law does not have any dress codes for minorities,” said Rabbi Hier.

The Simon Wiesenthal Center is one of the largest international Jewish human rights organizations with over 400,000 member families in the United States. It is an NGO at international agencies including the United Nations, UNESCO, the OSCE, the OAS and the Council of Europe.

For more information, please contact the Center's Public Relations Department, 310-553-9036.

it'd be simple for you to say that the story was a lie, but will you pride continue to get in the way?  

By Blogger Cardinalpark, at Thu Jun 01, 09:55:00 AM:

Screwy:

So what does the law call for?  

By Blogger Cardinalpark, at Thu Jun 01, 09:58:00 AM:

Oh, ans Crewy -- since you've avoided commentary on this other post, what do you think of the Iranian President's remark at the end of his letter to President Bush?  

By Blogger Screwy Hoolie, at Thu Jun 01, 12:39:00 PM:

It's what you'd expect from a militant fundamentalist.

You want me to talk about all the bad things in Iran, and I've avoided doing so. I couldn't find the words for why until I read this from Kevin Drum:

"I know perfectly well that criticism of Iran is not just criticism of Iran. Whether I want it to or not, it also provides support for the Bush administration's determined and deliberate effort to whip up enthusiasm for a military strike. Only a naif would view criticism of Iran in a vacuum, without also seeing the way it will be used by an administration that has demonstrated time and again that it can't be trusted to act wisely."  

By Blogger Cardinalpark, at Thu Jun 01, 01:04:00 PM:

Screwy: what do you mean by a militant fundamentalist? By that, are you describing me in religious terms? I know you'v previously described me as militarist. In some cases, I suppose I support military endeavors, in others I don't. But what do you mean precisely?

Screwy, I know you aren't thrilled with the Iranian situation, because it is adversarial. Iran is an adversary of the US. I wish it were not so, because geopolitically, Iran is a natural ally of the US. The problem is its theocratic, tyrannical regime. They, Screwy, are truly militant fundamentalists. How can one take you seriously when you can't even get simple nomenclature right?

So how does one deal with such an adversary? Our despotic friends sully us, do they not? Do we make this despotic regime our friend? Is this even possible?

See, by asserting Drum's partisanship, one avoids tackling the important issue. Tackle the issue Screwy, and drop the partisanship. It's the issue that matters. Whether Bush deals with it today, or whomever the next president may be, somebody has to deal with the issue at hand. The conversation we are trying to have requires looking the project directly in the eye.  

By Blogger Screwy Hoolie, at Thu Jun 01, 02:13:00 PM:

I meant that Ahmadinejad is a militant fundamentalist. Then again, so is George W.

But that's apples and oranges isn't it?

"looking the project directly in the eye"...

This "project" is ongoing, CP. Iran is on its way to producing nukes in the next 5 or 10 years. That gives us time to exert all the diplomatic efforts we can to create friendlier conditions. You say that War is a weapon in the diplomatic arsenal...and you're not a militarist? With nomenclature like that, you'll be hard pressed to convince anyone otherwise.

I think we need to look at the Saudi Arabia "project in the eye" and the Peak Oil "project in the eye" and the Global Warming "project in the eye" and the Budget deficit "project in the eye", etc.

Just because you cast it as a crisis doesn't make it so. It's a part of the geopolitical situation, not the entirety of it.

You'll likely find fault with the lack of urgency I give to Iran, and that's fine. It's not as urgent as Bush supporters would like us to think it is, and I'd prefer to have a different, more competent administration dealing with it.  

By Blogger Cardinalpark, at Fri Jun 02, 09:36:00 AM:

SH - I don't find fault. I'm frankly not sure. Uncertainty itself adds urgency. Saudi is a clear, long term issue. So is the budget, though I would contend that proposed Social Security reform by the administration-- which clearly looks to deal with the problem -- has been rebuffed by Congress unwilling to face up to the issue.

One difference between us may be simply that i have 2 boys, one 12 and one 8. My self interested preference would be to have dealt with Iran before they are 18, because I think the odds favor Iran being more, not less dangerous in 6 years. But that may or may not correctly assume the continued tenure of the current regime.

Put another way, I would like the Mullahs out sooner rather than later. Ideally by revolution, without American military intervention. But out regardless.  

By Blogger metromon, at Sun Jun 11, 11:07:00 AM:

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