Mr. Risk Goes To Washington

What does a Treasury Secretary do? Good question. It's much easier to tick off the things a Treasury Secretary can't do. He can't control the money supply, even though the Treasury Dept. includes the Bureau of Engraving & Printing, which prints the paper currency, and the U.S. Mint, which makes the coins (7.7 billion pennies last year). He can't set tax policy, even though he supervises the Internal Revenue Service. While he controls the Bureau of the Public Debt, he can't expand or shrink the budget deficit. One might say the Treasury Secretary, especially in the Bush Administration, gets all of the scut work and none of the fun.

That's why many people were surprised when Henry M. Paulson Jr., CEO of Goldman Sachs Group (GS ) -- a power position if ever there was one -- accepted President George W. Bush's request to become the new Treasury chief. Treasury has been so minimized in recent years that most news outlets have been conditioned to downplay it. Most of their accounts of the Paulson nomination were heavy on fluff and devoid of specifics. Paulson was repeatedly lauded for the "credibility" he would bestow on the Administration's economic policy in the eyes of the financial markets. Some commentators opined, hopefully, that he would be a voice for "fiscal responsibility" who would have a "seat at the table" when economic policy was made. Others saw Paulson as a "heavyweight" who could more effectively deliver the Bush Administration's message of economic growth before the November elections.