by Frank James
When Treasury Secretary Henry Paulson was appointed by President Bush as his third and presumably last Treasury Secretary in 2006, a lot of observers assumed Paulson was coming in to be a mere caretaker.
That was a bad call.
Shakespeare has a line about some men being born great, some men achieving greatness and others having greatness thrust upon them. Paulson jumps out of that last category. When Wall Street was healthy, it made him very rich. Now that it's ailing, it's made him famous.
Because of his energetic and sweeping response to the Wall Street meltdown, Paulson has turned out to be one of the most powerful and activist Treasury secretaries in recent U.S. history.
If there were an Alexander Hamilton Award for using federal power vigorously in times of economic crisis, he would get it by acclamation. Only time will tell if the way he has seized and used the levers at his disposal was the right thing at the right time.
In times of crisis, however, humans like a take-charge guy and Paulson is certainly that. He is the antithesis of Michael "Heckuva Job" Brown.
Almost overnight, he has become one of the most nation's, better yet, the globe's most powerful people. With the bald pate and the penetrating eyes, he looks a bit like Julius Caeser and some would say is acting the part.
Newsweek portrays him as "King Henry" in its latest cover story:
Wielding much of this power over financial life and death is this tall, calm man. Paulson came to Washington from Wall Street in 2006 expecting to deal with issues like Social Security reform and trade agreements. But the economy had other ideas. At a time when President Bush seems to have largely checked out, the teetotaling 62-year-old has emerged as the nation's most powerful leader--the investment banker in chief. As he did on the Street, Paulson continues to advise CEOs on the best course of action, to arrange financing and to get the best terms possible for his clients. Only now his clients are American taxpayers, the president and the global financial system.
With the help of his counterparts at the Federal Reserve and the Securities and Exchange Commission, Ben Bernanke and Christopher Cox, Paulson has succeeded in fundamentally altering the relationship between Wall Street and Washington--almost to the point where D.C. is now the world's financial capital. "There's no doubt that he's in charge," says Roy Smith, a former partner with Paulson at Goldman and a professor at New York University. An indifferent orator--Paulson hunches his 6-foot-2 frame over lecterns and has a halting speaking style--the Eagle Scout has emerged as the pre-eminent market whisperer and cajoler of the American financial system. And yet Paulson has rankled some in Washington by conducting business like a Wall Street Master of the Universe: the marathon late nights and weekend meetings with a small group of people, followed by an unveiling of the result as a fait accompli.
