Wednesday, November 8, 2006

The importance of Henry Paulson

So the Democrats reclaim the House. And the Senate remains within reach, with results from two races pending.

There's not much I can say about this that isn't being said elsewhere, but what I will say is that Treasury Secretary Henry Paulson may now be the most important man in the Bush administration, if not in all of Washington, because he now stands between China and congressional Democrats eager to punish China from growing. Paulson, who in recent months has emerged as the point man on US-China policy, will have to ensure that the Democratic House does not do something stupid, like imposing tariffs to goad China into raising its exchange rate.

Ironic that an administration that entered office determined not to view China as a "strategic competitor" is now in a position of defending China from China bashers in Congress. (Or maybe not so ironic, because since Nixon went to China it seems that the executive branch always finds itself defending China, while Congress bashes China, whether on human rights, trade, or national security grounds.)

Nevertheless, Paulson's significance remains. He will have his work cut out for him, but given that he has already performed well in office -- possessing more power in the administration than both of his Bush administration predecessors combined -- I expect that he will be up to the task.

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