The president is looking for a respected Wall Street executive to convince the world that the US economy is in great shape thanks to the administration’s economic policies. Paulson is certainly a respected Wall Street executive.
As to why Paulson would accept the job. Three reasons come to mind:
- This is what’s done at Goldman Sachs. Many Goldman Sachs executives – Robert Rubin (who was Clinton’s Treasury Secretary and Stephen Friedman (who was Bush’s head of the
Is such a crisis imminent? Cheap Foreign Capital Harks Back to '90s Crisis in this morning’s Wall Street Journal [subscription required] suggests that developing countries are becoming increasingly dependent on our cheap capital but that we are providing that capital with insufficient awareness of the risks. If developing country stock markets tumble too far too fast, these risks could become all too apparent. This would lead to a rapid withdrawal of the cheap capital – leading to a global growth slowdown.
This is just the kind of financial crisis that could test Paulson’s skills and put him in the history books.