Snow steps down at Treasury; Paulson nominated
President Bush continued shaking up his cabinet today, nominating a Wall Street insider, Goldman Sachs CEO Henry Paulson, to replace the sometimes embattled John Snow as treasury secretary.
In making the announcement at the White House Rose Garden, Bush praised Paulson for his "lifetime of business experience," his "intimate knowledge of financial markets," and his "ability to explain economic issues in clear terms." Paulson, he added, will bring those attributes to bear at Treasury as he pushes to "strengthen our financial markets and expand the reach of the American dream."
The change at Treasury is not unexpected. Speculation has run for months in both Washington and on Wall Street that Snow, a former chief executive officer of CSX Corp., the railroad firm, was on his way out. Although Snow has been a loyal servant to the Bush administration, critics have long chastised him for not being a forceful booster for the administration's economic policies or convincing in selling them to the public.
In thanking Bush for his support, Snow cited the nation's improved productivity, growth rate, and rising wages as achievements during his three-year tenure as treasury secretary.
"The facts are in," he said. "Your economic policies have put the American economy on a strong upward path."
But Americans haven't been buying that rosy vision. Only about 40 percent have approved of Bush's economic policies in most recent Gallup Polls. Meanwhile consumer confidence polls continue to show a general decline.
Whether this is Snow's fault is certainly debatable. But what is clear is that the administration and its Treasury Department will most likely only find more difficulties on the horizon with concerns about inflation and currency gyrations, as well as continuing trade and budget deficits drawing increasing concern on both Wall Street and Main Street.
Asked how Paulson's nomination might help the administration tackle these looming issues, Alan Levenson, the chief economist for T. Rowe Price Associates, was skeptical.
"It is good that somebody with some market savvy has been brought in to manage expectations in the financial markets, and maybe it helps on the communication front," he says. "But the realities of the economy are what they are."
Speaking of the challenges ahead, Paulson noted that the U.S. economy is "truly a marvel, but we cannot take it for granted."
The Senate must confirm Paulson's ascent, but he has backing from both sides of the aisle and is expected to win swift approval.
In taking the job, he will become the second Goldman Sachs executive to join Bush's inner circle. Bush recently tapped Josh Bolten to replace Andrew Card as his chief of staff.
Why Paulson, who is also known as a staunch conservationist and avid bird-watcher, chose to take the job is another matter. Pundits have noted that it's hard to say no to the president of the United States, even one with low approval ratings. Perhaps Paulson was just looking for a change.
After three decades at Goldman Sachs, during which he orchestrated the firm's initial public offering and extended its reach into new markets, Paulson is a multimillionaire, with his net worth estimated at about $500 million. He took home about $30 million in total compensation in 2004 alone. In accepting the nomination, Paulson said he simply looked forward to helping "keep the American economy strong and competitive."