Henry Paulson (b. 1946)

Who They Were

Henry Paulson (born 1946) is an American banker and public official who served as U.S. Treasury Secretary during the 2008 financial crisis. Before joining the government he spent decades at the investment bank Goldman Sachs, rising to become its chairman and chief executive. President George W. Bush appointed him Treasury Secretary in 2006, and within two years he was managing the most severe financial emergency since the Great Depression. As the crisis intensified in the autumn of 2008, Paulson became the public face of the federal rescue effort, coordinating with the Federal Reserve and Congress as major financial institutions failed or teetered. He left office in early 2009 at the end of the Bush administration, and he is not to be confused with the unrelated hedge fund manager John Paulson. In later years he wrote about the crisis and worked on economic and environmental policy.

Key Contributions

Paulson's central act in office was pushing the Troubled Asset Relief Program (TARP) through Congress in October 2008, a roughly $700 billion program designed to stabilize the banking system by injecting capital into stressed institutions. He argued that without decisive federal intervention the credit system could seize up and drag the wider economy into collapse. The plan was politically contentious - an initial version was rejected by the House of Representatives before a revised bill passed - and it remains a defining episode in debates over bailouts, moral hazard, and the government's responsibility for the financial system. Working alongside Federal Reserve officials, Paulson helped shape emergency interventions involving firms including the mortgage giants Fannie Mae and Freddie Mac and the insurer AIG.

On EconRecall

U. Play the games that feature Henry Paulson:

• The 2008 Financial Crisis