Kashkari faces major task as 'bailout czar'

While at Wharton, Kashkari volunteered for a rigorous "leadership venture experience" at the U.S. Army's battle simulation lab at Fort Dix, New Jersey. The exercise involved a mock cease-fire in Bosnia, and the students were broken up into teams representing NATO, the Red Cross, the Army and other organizations coordinating to get relief to 300 refugees.

Professor Michael Useem ran the exercise and said Kashkari's willingness to put himself through the Army simulation revealed his drive and his abilities to function under "trying and, sometimes, even hostile conditions."

"He's been invested with enormous authority ... at one of the most critical junctures of our generation," said Useem, director of Wharton's Center for Leadership and Change Management, adding that he understood why someone with Kashkari's qualities was chosen.

It was during a summer internship at the investment bank and securities firm Goldman Sachs Group Inc. that Kashkari "really got that passion" for high finance, his sister said. In 2002, he joined Goldman Sachs in San Francisco, where he headed the information technology security investment banking practice.

In February 2006, Kashkari had a meeting in New York with Paulson, then the firm's chairman and chief executive officer, to talk about his interest in public service. When he heard of Paulson's nomination in July, he called him back.

"'Hank,"' he recalled saying. "'Do you remember that conversation we had a few months ago? If you're putting a team together, I want to come with you."'

A week later, he was being sworn in as a senior adviser responsible for developing the President's Twenty in Ten energy security plan. He has also been involved developing and executing the department's response to the housing crisis, addressing the sub-prime lending debacle and helping to draft the legislation that Congress passed last week creating the $700 billion rescue effort.

Not everyone praises his work. John Taylor, president of the National Community Reinvestment Coalition, has questioned Kashkari's leadership of Treasury's Hope Now Alliance, a government-industry group trying to prevent individual mortgage foreclosures. In an interview with National Public Radio, Taylor faulted making industry participation voluntary and said of Kashkari: "He keeps his cards close to the vest, so it's hard to tell what he's thinking."

But the same confidence and presentation skills that so impressed his colleagues on the telescope project were evident during a presentation Kashkari made last month at the American Enterprise Institute on covered bonds, a kind of mortgage-backed security popular in Europe.

"I'd never heard of the covered bond until a year ago," he admitted to the crowd. "It took me a while to get my head around it."

After one questioner grilled him about why he should feel good about the government getting into "market innovation," Kashkari calmly explained that there "there IS no silver bullet" for any of these ills.

"I'm a free-market Republican," he said, repeatedly clearing a throat scratchy from many late-night sessions. "As much as I would like to believe, 'Just let 'em free and everyone's going to work out their own problems,' we're under a lot of pressure right now. All of us are feeling a lot of pressure."

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