Paulson’s PR Problem
Roger Ehrenberg worked on Wall Street for 17 years, and he’s been a supporter of Treasury Sec. Henry Paulson Jr. since he was named to the post. But at Information Arbitrage, Ehrenberg details how Paulson mismanaged the $700-billion bailout from a public-relations standpoint.
Paulson’s biggest mistakes? Asking for supreme powers and no judicial review. Failing to realize that voters needed to trust the makers of the plan, and that they needed transparency. Arguing against paying market value for toxic assets. All this, Ehrenberg says, marks Paulson as man of the past, rather than the future.
He has bungled the handling of the bailout worse than an intellectual midget. This is one circumstance where IQ points, hubris and ego served as a barrier to success. He was so convinced of his righteousness and correctness that he didn’t listen. During an election year. In the midst of one of the most severe financial crises this country has ever faced. He simply missed the boat. He didn’t have a read on the pulse of the country. And it cost his bill passing Congress. And perhaps his job as well. …
He reads as a pandering ex-Wall Street executive, a man more concerned with preserving the status quo than helping usher the financial markets into a new, more customer-focused and risk-managed phase. This is a world that can still be profitable and create value for customers, employees and shareholders alike, but perhaps at a lower level and with more stable returns. Not a bad thing. And just maybe a really good thing. But this is not what lies deep within Mr. Paulson’s heart. The days of yesteryear are what he still pines for.
Much of the fallout is focusing on Congress’ role in tanking the bailout. But Paulson’s strategy also will be coming in for a closer look. Especially as he tries to revive the rescue package.
Paulson obviously needs to play the p.r. game a lot better this time around. And maybe understand politics better as well. The question is whether he will.