The Confessions of Hank Paulson

They never really fade away, the old soldiers, the bankers-cum-politicians, even the ball players. They always at least try for a come-back, although they rarely bring it off. I recall a sultry Saturday at Yankee Stadium in 1954 when Frankie Crossetti, performing in an exhibition game that brought the Miller Huggins Yankees out of mothballs to confront Casey Stengel’s more youthful oldsters. Frankie laced the first pitch he’d looked at in 15 years over the right center field wall, only to fall down half way to first base with a charley horse.

So it was recently when we the astonished viewers realized we had not seen our last of Hank Paulson, Treasury Secretary during the glory years of Dubbleya, aka Bush II. At least for as long as it takes to flog his book, the mandatory memoir we have come to expect from every faded and mostly forgotten member of the rich and sub-famous. In fact we were treated to a double exposure, a two-shot, a va-et-retour.

Most impressive was the venue faithfully provided by Charlie Rose, the perennial doyen, the unofficial king of the interview-for-profit circuit. No celebrity is too large for Charlie, whether he’s recently produced a book or not. One night he’ll be matching wits with Arnold Palmer, in the finest detail devoting half an hour to Arnie’s short game or his take on the Tiger. In the very next episode, Charlie will be verbally fencing with the Russian Foreign Minister or Bashar al-Assad, who may not have written a book yet but probably will when he finds a gutsy New York publisher, willing to gamble on a 10 million-piaster advance.

But before we get to the Charlie Rose marquee, Hank Paulson’s handler had earlier warped him into a gig with the prestigious Meet The Press Sunday seminar, wherein host David Gregory, mindful of the classic Tim Russert tradition, carefully balanced the opinion scales by including Maria Bartiromo, the lily maid of Wall and Broad. About as contrarian a voice as asking the Queen’s chamberlain to put the knock on the monarchy. But there the shutout ended, because, perhaps in a moment of weakness or simply oversight, somehow former Congressional pit bull Barney Frank was also given a place on the program.

The Hank-and-Maria mutual admiration duo was scarcely warmed up, singing an operatic apologia for the beleaguered bankers of bail-out brutality, when Barney (gruffly as is his wont) posed the unanswerable question: if they, the long-suffering money-changers, and more recently derivative-fixated merchants, needed the tax-payers to help them clear the overload from their sub-prime inventories, how was it that they could pay each other such outlandish salaries, bonuses and stock options?

Barney didn’t mention any names, being the polite New Englander that he is, but we could deduce, for example, that he was referring to the likes of Jamie Dimon and Lloyd Blankfein, whose compensation is more like a Saudi’s ransom than Bob Cratchit’s Christmas box, which would be more appropriate, given that they were the perps in the great debacle.

Thus spanked by Frank, Hank, who had still not made significant inroads into his own modest $100 million mustering-out pay received from Goldman Sachs (prior to the call from Dubbleya and the compassionate conservatives), was taken not only aback, but also affront. As for Maria, for the first time in living memory she seemed at a loss for a suitable financial buzz-word. She could find neither head wind nor top-line guidance with which to respond.

David Gregory, supposedly refereeing from a neutral corner, didn’t help much, managing to fill the shocked silence by mouthing the vague comment that only 14 percent of Americans had a positive view of Wall Street bankers. Increasing income inequality, he managed to suggest, illustrated how emphatically the banks had ended up on top. It left the door open for Barnie to point out that they’d never left. But he didn’t.

Instead, Frank did point out that new regulations meant that banks could no longer become “too big too fail,” because they would not receive government help if they were overly indebted, or for that matter, using TARP funds to play the market.

Regaining her composure, Maria was quick to speak up for the 14%, dishing into the debate with the rejoibder. “We need to get beyond the conversation of ‘Is Wall Street evil? Are the bankers evil and causing pain?’”

Barnie ignored that straight line, so she continued: “We need to move toward the conversation of how do you create sustainable economic growth. That will answer the issue of inequality. Because with growth, come jobs.”

Jobs, in Maria’s world, means that more minimum-wagers flipping Big Macs will surely narrow the gap and solve the issue of inequality. Mission accomplished.

“I couldn’t agree more,” Paulson agreed more. “I mean, to me, that’s what it’s all about is sustainable economic growth.”

It wasn’t immediately clear whether he meant his own or the economy’s, but at that point the host and Maria broke the silence with forced laughter, Barney Frank looked at his fingernails, and another great moment in Finance went into the record book.

Paulson followed the same philosophical line with his Charlie Rose soiree. First he traced his early years as a swimming instructor in Quantico, Virginia. “The only time I had ever worn a suit was to go to church.” But he did his first bailout moonlighting at the Pentagon (It was a minor Lockheed defense contract) where he was moonlighting after his swimming day job. Or maybe it was the other way around.

Then he got a minor job in the White House, with exquisite timing. It was two weeks before Watergate. As a last resort, he fell back on Wall Street, picking Goldman Sachs as his entree to financial stardom. The rest is history. Ours as well as his.

The solid hour at Charlie Rose’s table established more firmly than ever Hank Paulson’s commitment to the Street and his steadfast belief that the bankers are a poor, misunderstood crew who want only what is best for the people. In answer to Charlie’s timid query about whether off-color activity had occurred, which almost trashed the financial world, his rejoinder was that “”some made mistakes. But a lot of people made mistakes.”

Mistakes, it turns out, are a pseudonym for crime. It was reminiscent of the ancient doctrine in High Church circles that replaces the concept of crime with the more universal and harmless, being forgivable, church invention of sin.

Charlie Rose didn’t press the point. Which was surprising, given his predilection for frontal assault with most interviewees. If he can brace Assad in his own den, telling him the world considers him a criminal – which he did recently — why could he not take on a relative bantam weight like Hank in the same fashion?

I prefer the opinion offered up by Jamie Dimon of JPMorgan Chase recently, even as he was debating chucking the whole Wall Street gig in favor of retirement on a fish farm in Alaska, Dimon said that offhand, he could think of 15 major bankers who should be in jail.

Clearly, Paulson will sell a lot of books, not that he needs the dough. The world, enfin, wants to believe in bankers. But his personal home run, unlike Frankie Crossetti’s, came before he retired. It was when he was confronted by Barney Frank that he fell down with a charley horse. As an apologist and father -confessor for Wall Street, even in retirement, Hank didn’t get to first base.

Bill Annett writes four newsletters: The Canadian Shield, American Logo, Beating the Street, and The Oyster World. He can be reached at: Read other articles by Bill.