Paulson's got his crisis, can he handle it as well as Rubin?

It's been almost two years since Hank Paulson took over as Treasury Secretary. I was not sure why he wanted the job, but I speculated that he might have taken it because it would give him a chance to outshine fellow Goldman Sachs Group (NYSE: GS) alumnus Robert Rubin when a financial crisis arose.

Well, he's got his crisis now. Today, The Associated Press reports that Paulson spent quite a bit of time on the news shows talking about how the The Bush administration will "do what it takes" to stabilize chaotic markets and minimize the economic damage. But his plan to save Structured Investment Vehicles (SIVs) dissolved, his subprime rescue plan fizzled, and subprime refused to remain contained as he said it would last spring.

Rubin demonstrated his mettle in handling several financial crises such as the Mexican financial crisis and the Russian financial meltdown in 1998. While Rubin has hardly distinguished himself at Citigroup (NYSE: C), nothing can take away his finesse in handling those financial crises.

I wish Paulson had such skill because the crisis we now face is immeasurably more challenging than the ones that Rubin solved.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup stock and has no financial interest in the other securities mentioned.