The Treasury Department's hidden treasure

When Sam Bodman's name appeared in the news as President Bush's choice to lead the Department of Energy, the dominant reaction the press was to treat him as 'unknown.' But he is a man of great accomplishment, as an engineer, a scholar, and businessman, and as a brilliant official in a sub—cabinet position. As it happens, I instantly recognized his name, because of the praise he had received from one of the intellectual giants of our age.

Last May, I had the dazzling honor of interviewing the great economist, Hernando de Soto.  He is my hero, so for me this was a dream come true. De Soto's work shows that simply institutionalizing property rights for the world's poorest people has brought untold stability and prosperity to every country that's seriously tried to implement his findings. His own country, Peru, where his ideas are firmly in place, recently reported its 37th straight month of economic growth and continuing peace. You never hear of any trouble coming out of Peru these days? The quiet of Peru gives the Nobel Economics Committee lots to ignore, it seems.
 
So the nomination of Sam Bodman to the Energy Department deeply intrigued me.  What does this have to do with de Soto? In the interview, de Soto told me that Bodman was one of the finest minds he knew of in the U.S. government, and he knew quite a few.
 
I had never heard of Bodman, and made the great man spell Bodman's name out for me.
 
Our conversation went something like this:
 
"We will be hosted by State and Treasury," said de Soto.

Q. "But given some of the poor advice Treasury has spread around the world in the past few years, how can you convince people like that of anything? Isn't talking to Treasury about the critical importance of property rights a waste of time?"  I asked.

A. "No. At Treasury there are good people — especially Sam Bodman. He's very impressive to us. I know him very well, and he understands these ideas. He's going to be hosting us," de Soto said.

 De Soto added that he was in a different league from many people in the Bush Administration who were friendly, but who didn't precisely get the point of his ideas.

"Even though they are good friends, they can be paying more attention to this by understanding that when we talk about property rights, we are not talking about land tenure or titling in themselves, but about using property rights to create rule of law — it's a different approach," he said.
 
He pointed out that Bodman was a notable exception.
 
What does this have to do with being an "unknown" nominee for head of the Department of Energy? It suggests that Bodman has a discriminating mastery of powerful economic ideas, a head for broad picture strategy, and an understanding of how markets work. These capabilities will serve him well in today's climate of volatile oil prices, speculation, and the threatened use of oil as a weapon in dodgy countries like Venezuela and Russia.
 
Bodman, as a matter of fact, is very well—qualified to lead the Department of Energy for less abstract reasons as well. His background is in chemical engineering, a specialty that's requires an extremely high degree of critical thinking and mastery of a demanding education. He was good enough in the subject to teach it at M.I.T., one of the world's premier universities in engineering.  It's also a specialty that's nearly invisible to most Americans, most specifically media types who, in the words of an acting dean of Columbia University's Journalism School, "became journalists because you can't do math." Don't expect the media to have a clue as to Bodman's capabilities.
 
De Soto has tipped us early about the Treasury Department's hidden treasure. I greatly look forward to what he can do at the Department of Energy.