A few comments about Treasury Secretary Henry Paulson's defense in Tuesday's
New York Times, laying the ground for his return Tuesday morning to a House of Representatives that just finished savaging his guy Neel Kashkari. He makes a decent technical case for his sudden changes in direction on the bailout, but the oped is as dry and reader-friendly as a prospectus.
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Historically, we may look at Paulson (and Ben Bernanke, though it's interesting how the Fed chief has separated himself from Paulson lately) some day and say: Well, he was confronted with unprecedented challenges in an administration that had already flat-lined and he did the best he could. But right now, when you look at Paulson, you want to say: Could you be any worse politically?
Now the fact is Paulson may be the kind of smart, serious guy that disdains the retail politics Washington is notorious for. And normally, that wouldn't matter much because he'd have a president that would carry the load of explaining, justifying, persuading. But Paulson is essentially alone. And if he was reactive financially -- you can argue that point forever -- he was also reactive politically. Why the abrupt shifts on the bailout? Why the initial three-page bill? Why the failure to argue the case more compellingly to the public that a bailout of the banks -- or "Wall Street" -- was a bailout for Main Street? (Again, where was Bush?) Why the aggressive lack of transparency? Why not a more skillful release of his revision of the bailout last week? Why not more interviews and fewer hectoring speeches or press conferences? Why not more attempts to lay out how he's working with the Obama team, borrowing in effect the next president since the current one is useless? (The best PR he's gotten is when he said he'd have money left over for Obama.) Why not, egads, more effective spin, particularly on hot-button questions like bonuses?
The truth is, Paulson would still get a ton of grief, but he would have prepared the ground and offered a lot fewer surprises, which, on top of everything else, is making the markets and the public lose whatever is left of their faith in Treasury and its management of the mess.
Herbert Hoover may not have been quite as clueless as "Herbert Hoover." Franklin Roosevelt may not have been quite as stellar as "FDR." The difference is partly technical, partly political, in the best sense. The pity of Paulson is that he's rapidly become "Paulson," this puzzling, gangly guy who, even when he's changing his mind makes you feel it's your fault.
- Robert TeitelmanRobert Teitelman is editor in chief of The Deal.
Comments
Paulson is the Secretary of the Treasury. He is not supposed to try to manage the economy. He is supposed to protect the nation's money. He is not supposed to decide who gets the country's money. He is supposed to dole it out as Congress mandates. He is not supposed to give it away. He is supposed to make sure that all money due to the country's treasury is collected and held securely until Congress decides to spend it. He is not supposed to mandate economic policy. He is supposed to make recommendations to the government.
The idea that the government would buy into his new assumed role as a banker taking care of the banks is, to say the least and for the lack of a more illustrative word, bizarre.
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