Hank Paulson’s inside jobs

Felix Salmon writes: What on earth did Hank Paulson think his job was in the summer of 2008? As far as most of us were concerned, he was secretary of the US Treasury, answerable to the US people and to the president. But at the same time, in secret meetings, Paulson was hanging out with his old Goldman Sachs buddies, giving them invaluable information about what he was thinking in his new job.

The first news of this behavior came in October 2009, when Andrew Ross Sorkin revealed that Paulson had met with the entire board of Goldman Sachs in a Moscow hotel suite for an hour at the end of June 2008. He told them his views of the US and global economies, he previewed a market-moving speech he was about to give, and he even talked about the possibility that Lehman Brothers might blow up. Maybe it’s not so surprising that Goldman Sachs turned out to be so well positioned when Lehman did indeed do just that a few months later.

Today we learn that the Goldman meeting in Moscow was not some kind of aberration. A few weeks later, on July 28 2008, Paulson met with a who’s who of the hedge-fund world in the headquarters of Eton Park Capital Management — a fund founded by former Goldman superstar Eric Mindich.

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2 thoughts on “Hank Paulson’s inside jobs”

  1. delia ruhe

    You’d think that Americans would be beyond being shocked by corporate imperialism by now, especially after having gone through eight years of watching Cheney’s Halliburton automatically get every choice government contract without even having to file a bid for it.

  2. dickerson3870

    RE: “What on earth did Hank Paulson think his job was in the summer of 2008?” ~ Felix Salmon

    MY COMMENT: Chimpy/Smirky (George W. Bush) gave away the store!

    FROM whorunsgov.com:

    (excerpt)…In May 2006, President George W. Bush was looking for a high-profile new Treasury secretary to replace John Snow. Chief of Staff Josh Bolten recruited Paulson, who was reluctant to come to Washington to work for an administration in which Treasury secretaries Paul O’Neill and Snow had little power.
    Bush promised Paulson a broad portfolio over economic policy, including managing the nation’s economic relationship with China; making a new attempt to overhaul Social Security; and managing any financial crises that arose.
    SOURCE – http://www.whorunsgov.com/Profiles/Henry _Paulson?loadTab=1

    FROM THE NEW YORK TIMES:

    [excerpt] WASHINGTON — Henry Paulson Jr. has taken over as U.S. Treasury secretary and as top economic adviser to President George W. Bush, filling out a new economic team with a more pragmatic cast for the final two and a half years of this administration.
    Bush said Monday that the former Goldman Sachs chairman would have a central role in setting the agenda and implied that the Treasury Department would regain some of the power it lost to White House advisers during Bush’s first term.
    “Hank Paulson will be my leading policy adviser on a broad range of domestic and international economic issues, and he will be my principal spokesman for my administration’s economic policies,” Bush said before Paulson was sworn in.
    Paulson, who has a net worth of more than $700 million and has announced plans to sell $370 million of Goldman Sachs stock, is probably the richest Treasury secretary in U.S. history…

    SOURCE – http://www.nytimes.com/2006/07/11/business/worldbusiness/11iht-paulson.2171913.html

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