Last week, a small group met in the Oval Office to discuss the impending takeover of Fannie Mae and Freddie Mac. But while President Bush convened the meeting, there was no mistaking who was running the show: Hank Paulson, who had first floated public ownership and who oversaw every aspect of the bailout. The Fannie-Freddie conservatorship, which flies in the face of normal Bush policy, is only the latest demonstration of the treasury secretary's considerable clout.
As the New York Times reports, Bush has strong economic views dating from his MBA days—he harbors real antipathy for Fannie and Freddie, which he wanted to rein in as early as 2002. But now he has ceded economic policy almost completely to Paulson, a man he trusts far more than his first two treasury secretaries. One White House spokesman said, "The sentiment was, ‘You’re in charge, and I hope it works.’"