Five Questions for MBA Students to Ask Henry Paulson

Photograph by Luke Sharrett/The New York Times via Redux

Former Treasury Secretary Henry Paulson is chatting with students from the University of Chicago’s Booth School of Business on Feb. 1. As a centimillionaire with deep connections on Wall Street, Paulson is the kind of person that any go-getting MBA candidate would love to butter up. But just in case there are any gadflies in Paulson’s private audience, here are a few questions for them to toss his way.

1. The week of the bailout of American International Group in 2008, records show that you spoke more than two dozen times with Lloyd Blankfein, who succeeded you as chief executive officer of Goldman Sachs. Goldman and its clients later received $13 billion from AIG. May we assume that you and Blankfein primarily discussed bird-watching?

2. Bloomberg Markets magazine reported that in the summer of 2008, you gave hedge fund managers a scenario for how Fannie Mae and Freddie Mac could potentially be seized by the government and placed in conservatorship. That same morning you had told the New York Times that you expected Fannie and Freddie’s regulators to give a signal of confidence to the markets. Why did you give Wall Street and the public different messages?

3. In his book Too Big to Fail, Andrew Ross Sorkin reported that you met with the entire board of Goldman Sachs in your suite at a hotel in Moscow in June 2008. Sorkin writes that you discussed the possibility of a bank such as Lehman Brothers blowing up, among other topics. You did not report the “social event” on your official calendar. Obvious question: How was the room service?

4. When the housing market hit the skids and homeowners began to miss payments on their mortgages, you had the choice of helping the lenders deal with their losses, or helping the borrowers stay current on their loans. If you had helped the homeowners, the banks that made the loans would have benefited as well. Why the tilt toward the lenders?

5. Changing subjects here. As an old China hand from Goldman, you were expected to negotiate with Chinese leaders more effectively than your predecessors had. But by 2008, Chinese leaders were openly saying that they were losing interest in American advice. Your Paulson Institute is dedicated to the worthy goal of helping “the United States and China work in tandem.” Have you made any progress? Like, any at all?

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