People wonder why Paulson would want the job. For one, it’s in the culture of Goldman. From the moment you get there, you’re expected to participate actively in politics and charity. Bob Rubin, the last Goldman head turned Treasury secretary (and—ahem!—the man who gets more credit than anyone outside of Alan Greenspan for presiding over the longest economic expansion in U.S. history), was always asking me how was I giving back. Bill Gruver, my boss, and now a professor at Bucknell, constantly emphasized that I needed to spend time in the community. These people talked about a public life where you showed that you understood how this country allowed you to get rich, and you’d better show the country some thanks. You were graded at Goldman not just by your returns, but by what you returned. If you thought only about the money, sooner or later you’d be stopped in your advancement. You’d have to be naïve not to look at ego and maybe even a little rich-guy guilt as factors. But Paulson, like the long line of Goldman public servants who came before him—Rubin, Corzine, John Whitehead, Stephen Friedman—doesn’t need this job. He isn’t some retired or pushed-out exec. He took the job, I believe, because he wants to do right by the country. That gives him another advantage: If he doesn’t like the way things go down, he can simply walk away.
The guys around the globe who say where the money goes will take Paulson’s call. They couldn’t have cared less about Snow’s call.
Almost immediately after Paulson’s announcement, the catcalls began: He’s a representative of the disgraced overpaid CEO class and he’s too much of an insider. The stock market greeted his appointment with one of the worst days on record. I think that’s all nonsense. After the brittle, amateurish O’Neill and the faceless, ineffectual Snow, we could use an insider with gravitas and street savvy. No one’s quarreling with Goldman’s financial success under Paulson’s watch, and the stock market’s decline has to do with an inane Federal Reserve’s insistence on taking interest rates too high once again—not with this appointment. Could Paulson be like Bob Rubin or Larry Summers, both of whom seemed worthy of Alexander Hamilton’s mantle? Obviously, it’s not clear yet, but I’d bet on favorable comparisons with the past two chiefs.