Goldman Sachs rules the world

Second, Goldman Sachs people are multilateralists. Joining it is like hooking up with a Wall Street cult, in that the group is more important than any individual. At other Wall Street firms, individual traders and executives can become rock stars. At Goldman Sachs, such celebrity is frowned on. For anyone who doubts that, count the number of young bankers with blue Goldman Sachs gym bags slung over their shoulders in lower Manhattan, a show of team spirit rarely seen in corporate America.

Adding to Goldman Sachs' aura is the fact that its retail presence on Main Street is nonexistent. Not only does that contribute to its mystique as a behind-the-scenes player -- as opposed to, say, Merrill Lynch or Citibank -- but it has helped insulate the firm from the kind of boiler-room investor scandals that have plagued its rivals.

The global economy has become a mammoth, interconnected firm, with no single country able to call the shots. Although the Bush team may not accept this view, there are signs -- in Bolten's appointment, Condoleezza Rice's elevation and Karl Rove's sidelining -- that it finally recognizes the importance of engaging the rest of the world.

This is particularly important when it comes to economic policy, where markets are more linked than ever and where one country's trading foe (say, China, in the case of the U.S.) can also be its biggest creditor (ditto).

Finally, Goldman Sachs executives in general, and Paulson in particular, are pragmatists to the point of being mercenary. It's all about the markets, politics be damned.

Bush's appointment of Paulson is a sign that the president recognizes that playing partisan games with the economy gets us nowhere. In Snow, the president had a secretary who would do as he wished, and economic vital signs that weren't half bad, yet most Americans remain convinced that the country is in the doldrums. Bush's job-approval rating suffered accordingly.

Much has been made about the toothlessness of the Treasury secretary, particularly in this administration. The truth is that this is a job to be molded. Incoming secretaries shrink (Snow) or expand the post (Robert E. Rubin) as they are capable.

Hank Paulson and his Goldman Sachs touch can refurbish the office. Even bringing him aboard is something of a capitulation for the president, whose good-old-boy demeanor never has seemed that comfortable around the Wall Street crowd.

Almost no one believes that Paulson, a consummate deal maker, would have taken the job if he hadn't wrung a mandate, directly from the president, to take charge. With many of Treasury's non-economic duties moving to the Department of Homeland Security and elsewhere, Paulson can take the economic reins of a country with a storied past, a difficult future and the raw materials to make it all work.

And that's a pure-play turnaround story even a junior Goldman Sachs analyst could sink his teeth into.