Once obscure, Hank Paulson now nearly a household name

WASHINGTON -- Before the stock market tanked, before prominent banks collapsed, before home foreclosures and shrinking 401(k) plans became a national obsession, most Americans would have been hard-pressed to name the man responsible for leading the country out of its latest financial crisis.But these days, Treasury Secretary Henry Paulson is practically a household name.No wonder. He's everywhere, it seems.He's the bald guy who was standing to President Bush's left when Bush strolled into the White House Rose Garden last September and laid out the government's plans for a financial rescue package of historic proportions.He's the one who has taken on the tough bailout questions from exasperated lawmakers during congressional committee hearings. He's the man who has been on your TV, in your newspaper, talking about the financial markets day after day after day.Paulson's starring role in the economic crisis has elevated the profile of the treasury secretary to a level of prominence that hasn't been seen in decades -- a standing the position will probably continue to carry well into the administration of President-elect Barack Obama."I think there is no question that the economy is going to be the No. 1 issue certainly well into 2009," said Dan Simon, managing director of the Wall Street communications firm Cognito.Consequently, "there is no question the role of the treasury secretary will continue to be incredibly important, and that is why who Obama picks is going to be an incredibly important appointment," Simon said.Paulson is now regarded by many as the most important member of President Bush's cabinet, said John Ferrell, a former managing director of investment banking at Merrill Lynch.Paulson's increased standing is due mostly to the state of the economy and the broad authority that he received from Congress to carry out the $700 billion financial rescue package approved in October, Ferrell said."There is so much discretion and authority in the treasury secretary right now," said Ferrell, who is now a partner in the New York law firm of Sullivan & Worcester. "There's wide latitude to do all kinds of things."Treasury secretaries seldom get that kind of autonomy -- or acclaim.President Franklin D. Roosevelt led the nation out of the Great Depression, but few people other than serious students of history remember the name of the treasury secretary who carried out Roosevelt's New Deal. (It's Henry Morgenthau, for the record.)Regardless, the treasury secretary has historically been one of the president's three most important cabinet members -- the other two being the secretary of state and secretary of defense, said John F. Cooney, who served in the White House Office of Management and Budget under Ronald Reagan."In every administration, Treasury plays an extremely important role," said Cooney, who is now a regulatory and litigation partner with the Washington law firm Venable LLP.In Paulson's case, a couple of factors may have helped boost his profile.It's inevitable that the public focus would shift to the treasury secretary in times of economic crisis, much in the same way that the defense secretary and the secretary of state got a lot of attention in the immediate months and years after the terrorist attacks of Sept. 11, 2001, Simon said.Paulson was chairman and chief executive officer of Goldman Sachs before coming to the treasury. But Simon suggested there might be another reason he has taken such a public role in dealing with the crisis.Bush is a lame duck president, remains unpopular and has never been a strong communicator. As a result, "there is a void into which Paulson has willingly or unwillingly stepped," Simon said.Willingly or not, Paulson has gotten some harsh criticism for what Ferrell calls a "lack of clarity" in his decision-making. For example, Paulson said last week the government would not buy up troubled assets at banks, as originally planned, but would instead focus on injecting capital into the financial institutions.Cooney said Paulson and his policy team had no choice but to change strategies because new problems seem to crop up almost daily. "What impresses me most about them is they have been willing to do that with the full knowledge that they will be criticized," he said.Paulson's successor, whoever it may be, will work under the same kind of microscope.Obama hasn't yet disclosed who his treasury secretary will be but is said to be considering Lawrence Summers, who held the job during the final 1 1/2 years of Bill Clinton's presidency; Timothy Geithner, president of the Federal Reserve Bank of New York; former Federal Reserve chairman Paul Volcker; and New Jersey Gov. Jon Corzine, also a former chief executive officer of Goldman Sachs.No matter who he picks, Obama should know that Americans want him to be like Roosevelt, a pragmatist "who will go out and try things until the credit markets get started and the economy gets rolling," Ferrell said.Obama's choice of a treasury secretary will be extremely important because "they can't sketch out a policy and sit back and hope it works," Ferrell said. "They actually have to do it. They have to implement stuff."(E-mail Michael Collins at collinsm(at)shns.com.)(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)