Henry Paulson

Henry Merritt "Hank" Paulson Jr. (born March 28, 1946) is an American investment banker and financier who served as the 74th United States secretary of the treasury from 2006 to 2009. Prior to his role in the Department of the Treasury, Paulson was the chairman and chief executive officer (CEO) of major investment bank Goldman Sachs.

He served as Secretary of the Treasury under President George W. Bush. Paulson served through the end of the Bush administration, leaving office on January 20, 2009. He is now the chairman of the Paulson Institute, which he founded in 2011 to promote sustainable economic growth and a cleaner environment around the world, with an initial focus on the United States and China. He also works as executive chairman of the global fund, TPG Rise Climate.

Paulson was born in Palm Beach, Florida, the son of Marianne (née Gallauer) and Henry Merritt Paulson, a wholesale jeweler. He was raised as a Christian Scientist on a farm in Barrington, Illinois. He has Norwegian, German, and English Canadian ancestry. Paulson attained the rank of Eagle Scout in the Boy Scouts of America and is a recipient of the Distinguished Eagle Scout Award.

Paulson was an athlete at Barrington High School, participating in wrestling and football. He graduated in 1964. Paulson went on to attend Dartmouth College, where he graduated Phi Beta Kappa in 1968 with a degree in English. At Dartmouth, he was a member of Sigma Alpha Epsilon and he was an All-Ivy, All-East, and honorable mention All-American as an offensive lineman. Paulson received his Master of Business Administration degree from Harvard Business School in 1970. He was offered a scholarship to study at the University of Oxford following his graduation from Dartmouth, but chose not to accept it.

Paulson was Staff Assistant to the Assistant Secretary of Defense at the Pentagon from 1970 to 1972. He then worked for the administration of U.S. president Richard Nixon, serving as assistant to John Ehrlichman from 1972 to 1973.

Paulson joined Goldman Sachs in 1974, working in the firm's Chicago office under James P. Gorter, covering large industrial companies in the Midwest. He became a partner in 1982. From 1983 until 1988, Paulson led the Investment Banking group for the Midwest Region, and became managing partner of the Chicago office in 1988. From 1990 to November 1994, he was co-head of Investment Banking, then Chief Operating Officer from December 1994 to June 1998, eventually succeeding Jon Corzine as chief executive. His compensation package, according to reports, was $37 million in 2005, and $16.4 million projected for 2006. His net worth has been estimated at over $700 million. Paulson earned an estimated $480 million in total compensation from Goldman Sachs.

Paulson has personally built close relations with China during his career. In July 2008, The Daily Telegraph reported "Treasury Secretary Hank Paulson has intimate relations with the Chinese elite, dating from his days at Goldman Sachs when he visited the country more than 70 times."

Before becoming Treasury Secretary, he was required to liquidate all of his stock holdings in Goldman Sachs, valued at over $600 million in 2006, in order to comply with conflict-of-interest regulations. Due to a tax provision passed under President George H. W. Bush, Paulson was able to defer his capital gains tax, saving himself an estimated $50 million.

Paulson was nominated on May 30, 2006, by U.S. president George W. Bush to succeed John Snow as the Treasury Secretary. On June 28, 2006, he was confirmed unanimously by the United States Senate to serve in the position. Paulson was sworn in at a ceremony held at the Treasury Department on the morning of July 10, 2006.

Paulson identified the wide gap between the richest and poorest Americans as an issue on his list of the country's four major long-term economic issues to be addressed, highlighting the issue in one of his first public appearances as Secretary of Treasury.

Paulson conceded that chances were slim for agreeing on a method to reform Social Security financing, but said he would keep trying to find bipartisan support for it.

He also helped to create the Hope Now Alliance to help struggling homeowners during the subprime mortgage crisis.

Paulson was known to have persuaded President George W. Bush to allow him to spearhead U.S.-China relations and initiated and led the U.S.-China Strategic Economic Dialogue, a forum and mechanism under which the two countries addressed global areas of immediate and long-term strategic and economic interest. In spring 2007, Paulson warned an audience at the Shanghai Futures Exchange that China needed to free up capital markets to avoid losing potential economic growth, saying: "An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention." In September 2008, in light of the economic crisis experienced by the U.S. in the interim, Chinese leaders evidenced hesitation to follow Paulson's advice. When the U.S. needed to issue a huge volume of bonds to stabilize the financial market, it relied on China, the top holder of US debt.

On March 31, 2008, Paulson released "The Department of the Treasury Blueprint for a Modernized Financial Regulatory Structure". In remarks announcing the release of the report, Paulson cited the need to overhaul the financial regulatory system, saying:

But capital markets and the financial services industry have evolved significantly over the past decade. Globalization and financial innovation, such as securitization, have provided benefits to domestic and global economic growth; while highlighting new risks to financial markets. We should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change, one that will allow us to more effectively deal with inevitable market disruptions and one that will better protect investors and consumers.

The support given by the Federal Reserve Board, under Ben Bernanke, and the U.S. Treasury with Paulson at the helm, in the acquisition of Bear Stearns by JPMorgan Chase and the $200 billion facility made available to Fannie Mae and Freddie Mac attracted a great deal of criticism in congress by both Republicans and Democrats. Paulson and Geithner made every effort to enable Barclays to acquire Lehman Brothers, including convincing other large Wall Street firms to commit their own funds to support the deal. In light of the recent Bear Stearns criticism, Paulson was against committing public funds towards a bailout, for fear of being labelled “Mr. Bailout”. When British regulators indicated they would not approve the purchase, Lehman went into bankruptcy, and Paulson and Geithner worked to contain the systemic impact.

"Well, as you know, we're working through a difficult period in our financial markets right now as we work off some of the past excesses. But the American people can remain confident in the soundness and the resilience of our financial system," Paulson said soon after the Lehman Brothers bankruptcy.

In the aftermath of Lehman's failure and the simultaneous purchase of Merrill Lynch by Bank of America, already fragile credit markets froze, so that companies that had nothing to do with banking but needed financing (e.g. General Electric) could not get daily funding requirements which had the effect of sending the U.S. equity and bond markets into turmoil between September 15th and 19th, 2008.

After leaving his role as Treasury Secretary, Paulson spent a year at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University as a distinguished visiting fellow, and a fellow at the university's Bernard Schwartz Forum on Constructive Capitalism. His memoir, On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, was published by Hachette Book Group on February 1, 2010.

On October 6, 2014, Paulson testified in Starr v. United States, a lawsuit alleging that the government cheated American International Group shareholders of $40 billion by demanding a 79.9% stake in the company."AIG, either fairly or unfairly, ... became a symbol for all that is bad on Wall Street," Paulson said. He acknowledged that the terms of the bailout were meant to be "punitive."

In September 2015, Paulson was awarded an honorary doctorate of laws and environmental policy by Washington College President and former FDIC Chair Sheila Bair.

In April 2016, he was one of eight former Treasury secretaries who called on the United Kingdom to remain a member of the European Union ahead of the June 2016 Referendum. In June, Paulson announced his support for the Never Trump movement and endorsed Hillary Clinton for the presidency. In his op-ed to The Washington Post Paulson wrote, "The GOP, in putting Trump at the top of the ticket, is endorsing a brand of populism rooted in ignorance, prejudice, fear and isolationism."

Paulson is a leader of the Climate Leadership Council, co-authoring along with James A. Baker III, Greg Mankiw, Martin Feldstein, Ted Halstead, George P. Shultz, Thomas F. Stephenson, and S. Robson Walton a carbon fee and dividend proposal for the United States in 2017 as a climate change mitigation policy.

Paulson has been described as an avid nature lover. He has been a member of The Nature Conservancy for decades and was the organization's board chairman and co-chair of its Asia-Pacific Council. In that capacity, Paulson worked with former President of China Jiang Zemin to preserve the Tiger Leaping Gorge in Yunnan. Paulson co-chaired a group called Risky Business that raised awareness of the projected economic impact of climate change. He is a long-time supporter of Rare (conservation organization) where his wife Wendy is the Chair Emerita.

Paulson co-chairs the Aspen Economic Strategy Group with Erskine Bowles. He was the founding Chairman of the Advisory Board of the School of Economics and Management of Tsinghua University in Beijing.

Notable among the members of Bush's cabinet, Paulson has said he is a strong believer in the effect of human activity on global warming and advocates immediate action to decrease this effect.

During his tenure as CEO of Goldman Sachs, Paulson oversaw the corporate donation of 680,000 acres (2,800 km2) on the forested Chilean side of Tierra del Fuego, bringing criticism from Goldman shareholder groups. He further donated to conservancy causes US$100 million of assets from his wealth, and has pledged his entire fortune for the same purpose upon his death.