President George W. Bush tapped Goldman Sachs chairman and CEO as his nominee for Treasury secretary, succeeding John Snow, who is resigning. Hank Paulson, at a press conference announcing his nomination, said, “We must take steps to maintain our competitive edge in the world.” Indeed, observers speculate he’ll have wide latitude to set policy, having rebuffed the president’s offers in the past.
“The question is: Why would he sully his reputation? He probably got assurances that this would be a real job,” notes MarketWatch chief economist Irwin Kellner. Already, Paulson has lined up support on both sides of the aisle, with key Sen. Charles Schumer (D-N.Y.) voicing support.
Taking over for Paulson at Goldman is expected to be Lloyd Blankfein, currently the firm’s chief operating officer, though Goldman would not comment on its succession.
Paulson, who served in President Richard Nixon’s administration from 1970 through 1973, isn’t the only Goldman man in the Bush White House: Chief of Staff Joshua Bolten was an executive with the firm prior to taking a role with the Bush campaign in 2000. Nor is he the first Goldman chief to head up the Treasury. Robert Rubin left the firm to serve as Bill Clinton’s Treasury secretary. Unfortunately (or fortunately) for Paulson, one of his predecessors will not get the chance to vote to confirm him. Former Goldman CEO Jon Corzine (D-N.J.) left the U.S. Senate in January to become governor of New Jersey.