Wednesday, September 2, 2009

Hank "The Hulk" Paulson

Todd S. Purdum's Vanity Fair profile of former Treasury Secretary Hank Paulson -- who sat with Purdum seven times over a 15-month period, on the record, with the proviso that nothing he said would be published until after he left office -- was surprisingly lightweight. One would think that over nearly 8,000 words you could get a deep understanding of this man, who steered the ship of the US economy during the worst part of the financial crisis from fall 2007 till he left in January 2009. It was funny, but I came away from the piece feeling somewhat cheated. Here was a man who, with a Dartmouth education, who had no stomach for Washington politics (several times during the first interview he excused himself to go throw up), but with unparalleled Wall Street success at the helm of the richest investment bank in the US, Goldman Sachs, and some of the best we got was:
“Nancy Pelosi to me was a wonder in this deal, and she was available 24-7, anytime I called her on the cell phone,” Paulson told me, his hulking frame unfolding in a comfortable chair in his office at the Treasury, dominated by an oil portrait of his first predecessor, Alexander Hamilton. “She was engaged, she was decisive, and she was really willing to just get involved with all of her people on a hands-on basis.”

(Right after this, Purdum writes, is when he threw up the first time. Interesting placement of this fact, n'est-ce pas?)

Another tidbit:
“There’s a great lack of financial literacy and understanding in this nation, even among college-educated people.” But Paulson did figure out how to behave on the Hill. “There’s a way, keeping full integrity, of answering the questions you want to answer,” Paulson told me in one of our conversations, reflecting on what he had learned about committee hearings. “The thing that scared me was not a question I didn’t know the answer to. Just say, ‘I don’t know.’ The thing that scared me was some question that I knew, and answered correctly, and I’d be in deep doo-doo!” As his tenure wore on, Paulson confessed, “I amuse myself a lot by sitting there sometimes and thinking what would happen if I said, ‘Do you realize what an idiotic question that is?’”

But for me, the most telling passage in the piece had nothing to do with Paulson at all, but with the Bush administration itself:
The rescue of Fannie Mae and Freddie Mac—which together touched more than half of the nation’s $12 trillion in mortgages, by either backing them or owning them outright—proved to be all-consuming. “Mind-numbing” was the term Paulson used more than once. Beginning in the fall of 2006, Paulson had pressed for systemic reform of Fannie and Freddie, and had run into fierce opposition from the White House, which drew the line at any compromise with Congress.

My italics. See, earlier in the piece Paulson had said he was impatient with people on both sides of the aisle in Washington who would just sit there and say "I'm right, the other guys are wrong, I won't compromise." What this illustrates is just how politicized everything had become in the Bush era: from rescuing the economy to the troop surge in Iraq to ending Terri Schiavo's life. Thank God we have a president who actually makes the attempt to work with both sides (perfect example: the debate over the public option in health insurance reform). Too bad the other side hasn't yet learned how see-saws work.

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