Henry Paulson's Long Night Details Term Paper

The limitations of Paulson's role also reflect the social and political contexts of his actions. The role of Treasury Secretary has changed little in decades, and the powers of the office are as such limited. Paulson points out that "innovation precedes regulation," a situation that leaves him in frustration when dealing with Bear Stearns and other impending crises. This reflects another challenge of his job -- at Goldman Sachs he was CEO, with virtually unlimited power. As Treasury Secretary not only does Paulson have a boss, but his powers are constrained because the Treasury is merely one branch of a much larger regulatory machine. The ways in which powers are portioned out and limited have a significant impact on Paulson's ability to manage such crises. Managing with only limited power requires a different skill set than managing as CEO.

Political actors are also expected to be strong communicators. Purdum points out repeatedly that Paulson is not a strong public orator, and this affects his role. In the world of investment banking, it is not necessary to possess such skills, yet the shift to the political arena brings demand for the ability to convey ideas clearly to a microphone. This has impacted the perception of Paulson in public, something that is a legitimate concern in a social context where public opinion rather than expediency can dictate actions. Paulson is forced to address criticism, for example, that his actions are a direct reflection of his background as a banker and a Republican, rather than the actions of a financial and economic expert assigned to a largely non-partisan task.

In addition to the substantial adjustments Paulson has been forced to make to adjust to the dramatically different social context on the Treasury Secretary job, he has also faced challenging circumstances with respect to the economy and with respect to the political climate. While his political leanings and social background may give him a baseline ideology, the stark polarization of ideology in the political arena was a contrast to the more practical approach that many on Wall Street take. Given a crisis -- as Paulson was forced to address with the collapsing financial markets and catastrophic economic disruption -- differences can usually be put aside on Wall Street in order to address the problems at hand. While this happened for the most part at the executive level with the White House transition, there remained some difficulties at other levels of government. The toxic political climate, therefore, represented an unnecessary obstacle to successfully addressing the crisis.

Henry Paulson's job is complex, no doubt in part because of the multiple crises he has been forced to address during his tenure. Purdum's article sheds light on the difficulties faced in the transition from Wall Street to Washington, in particular where there is a significant divergence in the social context. The political context, too, is challenging, because of differences in the norms between the two cultures, Wall Street being direct and pragmatic and Washington being often duplicitous and concerned with multiple competing priorities. The economic crisis provides a backdrop for understanding these issues because of the way it creates a heightened degree of intensity surrounding the decisions Paulson has had to make and the way it has increased the stakes surrounding his ability to adjust to the new political and social contexts in which he must now operate.

Works Cited:

Purdum, T. (2009) Henry Paulson's long night. Vanity Fair. Retrieved March 8, 2010 from http://www.vanityfair.com/politics/features/2009/10/henry-paulson200910

Krugman, P. (2007). Henry Paulson's priorities. New York Times. Retrieved March 8, 2010 from http://www.nytimes.com/2007/12/10/opinion/10krugman.html