Hank Paulson, who President Bush nominated to be the next secretary of the Treasury, is being called the GOP version of Bob Rubin.
As Bill Clinton's Treasury secretary, Rubin kept Wall Street and world markets calm while providing consumers around the US with a sense that Washington understood the financial difficulties they faced each day.
Paulson's primary challenge will not be as the US economic policymaker-in-chief. Instead, he'll have to be a primary financial spokesman; that is, he'll need to be a highly effective communicator.
Part of the reason for this is timing: Unless there is a crisis, he'll have little or no opportunity to influence Bush administration economic policy. The President's budget was submitted in February and no one expects the White House to come up with a new plan this late in the year. Plus, any change from existing policy will be an admission by the White House that it has been wrong, and this administration typically has not made admissions like that.
So, during the next five months, Paulson's sole role will be to convincingly deliver the President's message on the economy. The White House will want him to travel around the US and the world telling everyone as convincingly as possible that Bush's economic policies have been successful and that they and the economy are better off because of them.
Yet, Paulson's abilities in this area are largely untested. As CEO of Goldman Sachs, one of Wall Street's most prestigious firms, he has spoken to the financial media, to financial audiences, and on financial topics. But can he communicate with non-financial types?
These are the people who are more swayed by the price they pay for a gallon of gas than they are by official economic statistics and forecasts. These are also the consumers who these days are expressing increasing concern about the economy, even though overall growth has been strong and unemployment is relatively low.
The irony is that Rubin, Paulson's model, was not a great communicator. By the time he became Treasury secretary, however, Rubin had established his credibility with the Hill and the media while head of the National Economic Council. He was known for being an honest broker whose word could be trusted and someone who had the President's ear.
Paulson doesn't enter with this widespread credibility. He'll walk into the job well known on Wall Street, but barely known elsewhere, including in the West Wing of the White House, on the Hill, and on Main Street. Because of that, he won't enjoy the same honeymoon period as Rubin. Right from the start, whatever Paulson says will have to be on the mark.
Paulson faces a tough road because the next five months will be all-campaigning-all-the-time for most members of the Bush administration, who are increasingly looking at the 2006 election as a referendum on his policies. This will hurt Paulson's credibility, perhaps severely. It may help Bush in the short term, especially if Republicans maintain the majority in the House and Senate, but it will harm the new Treasury secretary as he changes from campaigner to policymaker next year.
Stan Collender is MD in the Washington, DC, office of Qorvis Communications