A 35-year-old former vice president at Goldman Sachs has been tapped to manage the $700-billion bailout.
Neel T. Kashkari, one of Treasury Secretary Henry Paulson’s advisers and a longtime protege who shares his boss’s Midwestern origins and Yul Brynner look, was named yesterday interim head of the Treasury Department’s new Office of Financial Stability.
In his new job, the aerospace-engineer-turned-banker will oversee the potential purchase of nearly a trillion dollars worth of bad loans and mortgage-backed securities from banks and other financial institutions as part of the government’s bid to end the turmoil roiling global financial markets.
Neel T. Kashkari
Kashkari will have broad powers in setting up the office and overseeing its initial operations. Plans are to hire about two dozen staff to manage the program, along with five to 10 asset management firms. The first asset purchases are expected in several weeks.
He is unlikely to stay in the post long, however, since the Bush administration ends its term in January, and Senate confirmation, which is unlikely to come before Nov. 4, is required to fill the position permanently.
Given the stakes, some are demanding to know more about him. Josh Marshall of Talking Points Memo expressed frustration yesterday morning at how little was known about Kashkari:
For all I know this guy’s a friggin’ genius. But did Hank Paulson really just put a 35-year-old former Goldman Sachs VP in charge of the entire bailout program?
Let me be clear, on the face of it, Neel Kashkari looks impressive. But VP isn’t even a high position at Goldman. And his background appears to be in tech investing, though he has been leading up Treasury’s response to the housing meltdown (a ambiguous recommendation in itself.)
In any case, I want to be clear. I’m not saying Kashkari is another Michael Brown. But he is going to be in charge of upwards of a trillion dollars, in a task that would challenge an economics and finance genius from any era, and one rife with ethical and conflict of interest pitfalls.
I think we need to hear a lot more about the thinking behind this appointment.
A former aerospace engineer who designed projects for NASA before switching his career to finance, Kashkari is currently assistant secretary for international economics and development. He is an Indian-American whose parents emigrated from Kashmir and Jammu.
The Wall Street Journal noted today that this promotion gives him a new title for what he has been doing since he joined the treasury department in July 2006 – addressing the consequences of the subprime housing mortgage meltdown.
He is one of three Treasury staffers – including general counsel Robert Hoyt and head of legislative affairs Kevin Fromer - who stayed up until 4 a.m. last Sunday putting together the $700-billion bailout bill which was rejected by the House of Representatives the next day.
Last year, he and Phillip Swagel, assistant secretary for economic policy, crafted a “break the glass” proposal - an emergency tool which envisioned Treasury buying bad loans and other assets.
A native of Stow, Ohio, Kashkari got a bachelor’s and master’s degree in engineering, and began his career as an aerospace engineer at TRW in Redondo Beach, CA, developing technology for NASA projects like the James Webb Space Telescope.
After deciding to switch careers, he earned an M.B.A. at the University of Pennsylvania’s Wharton School of Business and then joined Goldman in San Francisco, advising companies on mergers and acquisitions and financial transactions before moving to New York where he worked closely with then-chairman and CEO Paulson.
He and his wife, Minal, an engineer for defense contractor Lockheed Martin, maintain homes in Maryland and California.
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