By now the world has had a day or so to get used to Henry Paulson's choice to become the so-called "market stabilizer" (which I thought was the Federal Reserve's job) and major domo of Treasury's TARP, Neel Kashkari. Now for alI I know, Kashkari is as advertised: a really sharp, up-and-coming young thing with an IQ bigger than the credit default swap market. But a few thoughts do come to mind with his ascension into bailout heaven, mostly involving not Kashkari, but his boss.
Continue reading below
I'm surprised no one has offered this yet, but here goes: Is Paulson out of his mind, or doesn't he care? Kashkari is being dropped into one of the most politically sensitive jobs in the U.S. -- in charge of spending what we have been told endlessly is $700 billion in hardworking taxpayers' funds, an outlay hated by both left and right. And given all the range of talent that exists on Wall Street or in the M.B.A. mills of America, Paulson, whose political moves during the bailout talks made Attila the Hun look like Lyndon Johnson, managed to find an individual who perfectly fit the sterotypical profile that the broad mass of Americans has been quickly learning to demonize, rightly or wrongly: a young, male, rocket scientist (degree in astrophysics, veteran of TRW) and financial engineer from, of all places, Goldman, Sachs & Co.
Now I know that Kashkari was one of the architects of the bailout plan, which, alas, has been criticized by nearly everyone, including the markets. And there is no one that holds Goldman in greater respect than I. But sheez, Henry, don't you know anyone else? It's unseemly, nepotistic even, as if Goldman is some sort of weird family. Besides, haven't you heard the talk that some crazies actually believe the bailout plan, not to say the American International Group Inc. loan, was designed to save Goldman? Or don't you care?
And that's the thing. Paulson technically has only a few months to go before a new administration sweeps the Bushes out of town and into the tattered history books. Paulson might have had a chance to hang in there -- given the crisis and everything -- until he shredded his political credibility with his moves on the bailout plan (three-page proposed bill, no oversight, bended knee to Pelosi). Maybe he's in such a hurry that he grabbed the nearest whiz kid on the bailout team he could find, and it turned out to be -- really! -- a Goldman guy. Or maybe he no longer cares about how it looks politically. Maybe he's beyond politics, dreaming about hawks and other flying things.
Maybe he'll be even right this time. Maybe. -
Robert Teitelman
Also see:
Paulson to tap Neel Kashkari to head bailoutRobert Teitelman is editor in chief of The Deal.
