Everybody knows by now, or at least should know, who Henry "Hank" Paulson is. He was the designated man in charge of rescuing the financial system from collapsing. One recurrent detail of his career in the news, is his former role of Chairman and CEO of Goldman Sachs. Being Goldman Sachs by far the most prestigious bank, some people are worried about how "independent" is Paulson's judgement from former colleagues' pressure. Paulson does not own any stake in Goldman, so he has no vested interested; but given the importance of the decisions he is taking, the idea that he may be subject to a conflict of interests is arising. This article explains pretty well what is the prevailing mood in the US about the problem. Since the meltdown has started, Paulson has turned to his firm to hire specialists who could help him solving the crisis. Some competitors, or witty commentators, have started to name this crew "Government Sachs".
Just for your information, this top-rated Bank has a long standing tradition of encouraging his alumni to work into the public sector. You are not a "Goldman Alumn Star" until you have made a breakthrough contribution it into the public sphere. For example, Mario Draghi, the current President of Bank of Italy, or Mark Carney, the current Governor of Bank of Canada, have bought worked for Goldman. I believe this is an impressing achievement and signals the capacity of the Bank to attract the most talented. The above mentioned people have an outstanding and impeccable reputation as the "best" suited for their respective job (at least Mario Draghi for what I know, but can any Canadian confirm please for Mr. Carney?). Furthermore, I think it's more a praise than a critique for the Bank to encourage his most talented employees to quit the company and make their way through the difficulties of a public sector job. What is special about the US? Maybe, it's just that time pressure forced Paulson to hire the people he knew better and trusted more.
But the fundamental point remain: should private sector people be encouraged to work in the public sector later in their career?Or does this fundamentally entail a natural emergence of a conflict of interests? The debate is open.