In his New Hampshire primary victory speech, President Trump acknowledged John Paulson and floated the possibility of him serving as Treasury secretary in a second Trump administration.
What would that mean, policy-wise? In a February 2023 interview Paulson said, "gold is rising again. I say again because it's been the reserve currency of the world for thousands of years, a legitimate alternative to holding the dollar or other paper currencies. There has been a significant increase in demand from central banks to replace dollars with gold, and we're just at the beginning of that trend. Gold will go up and the dollar will go down, so you'd be better off keeping your investment reserves in gold at this point."
In the same interview Paulson predicted a stock market correction and a recession, neither of which materialized. Here he is on some other, more policy-related issues, from the same interview: "The traditional American values are based on thrift, hard work, savings, and re-investment. That's what leads to success. If you want the benefits of success, spending but without the hard work or savings, then that will lead to ultimate decline. That's how I view the political divide in the U.S. today. There's a segment that wants all the benefit, but they want the government to provide it without contributing to the economic growth, and they achieve that by borrowing and spending."
Paulson reportedly gave Hebrew University $27 million in 2023 and the Tel Aviv Museum of Art $15 million in 2021. Like Trump, he grew up in Queens, N.Y., and now lives in Palm Beach. He famously bet against mortgage-backed securities starting in 2005, a bet that paid off brilliantly beginning in 2007. First in his class at NYU, then an M.B.A. at Harvard Business School, stints at Boston Consulting Group, Leon Levy's Odyssey Partners, Gruss Partners, and Bear Stearns, an investment in the Boston Beer Company (maker of Sam Adams), and, in 1994, opening his own hedge fund with $2 million of his own money, staffed by himself and an assistant. (He's also in the middle of what seems to be a complicated, acrimonious, long-running divorce case.)
Anyway, for Treasury secretary, one could do plenty worse. Trump has been going around saying the stock market is soaring in anticipation of his return to the White House. That may or may not be so, but certainly John Paulson (not Hank Paulson) at Treasury would probably inspire some confidence in the financial markets, at least those quarters of it that prefer their money hard rather than easy and that appreciate someone who keeps an eye on gold as a standard of value and who understands the risks of excessively easy monetary and fiscal policy.