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Paulson's Plenty

Right now Henry Paulson probably has, with Paul Bernanke, the most intellectually and emotionally fraught job in the world. So much has gone wrong and so much more can go wrong to the tune of trillions of dollars. Bernanke is a convert from the academy to public life, although he did serve on the board of education of Montgomery Township in New Jersey while he was a professor. Paulson's pre-life was as a banker, and his last work before Washington was as managing partner at Goldman Sachs.

Paulson has about half a billion dollars on Goldman Sachs' stock when he left the firm to become treasury secretary. And he bears some culpability for his company being mired (less than other firms, it is true) in over-leveraged debt instruments. But, at the time, very few people grasped how over-leveraged these instruments. In any case, in order to become a member of the cabinet, he was forced by law to sell his holdings. Lucky him! Goldman's stock was much, much higher then than now.

And he didn't have to pay taxes on this income because rules adopted under President Clinton exempt folk who are forced to sell to take a government job from normal obligations to the I.R.S. So he was allowed to keep roughly $150 million that he would otherwise have had to pay. That's about $75 million a year for his service in the Treasury. Not a bad salary, even in the gross gross income elite.

Had he not been made secretary of the treasury and had he held his stock...well...let him count his blessings, not me.