Hank Paulson is a big get for the White House. There are few institutions more respected than Goldman Sachs—the Harvard Law of the banking world—and to lure its chairman away to be Treasury secretary is pretty impressive.

The Bush White House desperately needed someone of his stature for three reasons. First, the John Snow situation was becoming positively embarrassing: In all this, spare a thought for him, a decent man who was callously humiliated on a regular basis. People, including the FT's leader writers this very morning, were scoffing that no one serious would ever take the job from this administration as it had so degraded its importance. Second, a stellar pick like this shows that the administration is not done yet—more a limping duck, than a lame one. Third, it helps focus public attention on the economy which is something the GOP is eager to do in advance of the midterms.  

The problem the White House is left with is how to persuade Bob Zoellick not to head in the opposite direction. Zoellick is understandably peeved about not being seriously considered for the job. Also, Zoellick knows that if he leaves now, Republican ‘08ers will begin dangling all sorts of carrots in front of him to come on board as an advisor. But there seems to be a potential fix here for the Bushies. John Bolton has to be confirmed by the Senate as UN Ambassador in January and it is hard to imagine that a more Democratic Senate will give him an easy ride. Bush then could nominate Zoellick for Turtle Bay and give the job cabinet rank, which it had during Dick Holbrooke’s tenure. This might be enough to persuade Zoellick to stay. Considering that this administration is not blessed, to put it mildly, with competent administrators, they can’t afford to lose Zoellick. Plus, he’s the right man to handle the Iran diplomacy at the UN.