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.
U.S. Secretary of the Treasury
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.
In April 2007, he delivered an upbeat assessment of the economy, saying growth was healthy and the housing market was nearing a turnaround. "All the signs I look at" show "the housing market is at or near the bottom," Paulson said in a speech to a business group in New York. The U.S. economy is "very healthy" and "robust," Paulson said.
In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades.
On March 26, 2008, Secretary Paulson said in remarks at the U.S. Chamber of Commerce,
As we work our way through this turbulence, our highest priority is limiting its impact on the real economy. We must maintain stable, orderly and liquid financial markets and our banks must continue to play their vital role of supporting the economy by making credit available to consumers and businesses. And we must of course focus on housing, which precipitated the turmoil in the capital markets, and is today the biggest downside risk to our economy. We must work to limit the impact of the housing downturn on the real economy without impeding the completion of the necessary housing correction. I will address each of these in turn. Regulators and policy makers are vigilant; we are not taking anything for granted.