US financial bailout: It is rocket science

Scott Talbott, a lobbyist for the Financial Services Roundtable, a group of 100 large companies, said Kashkari will have his work cut out for him.

"He's got the health of the housing market and the economy on his shoulders," he said. "But he's got a $700 billion checkbook too."

Kashkari will keep his current title as assistant Treasury secretary for international affairs, but will head up the newly created Office of Financial Stability on an interim basis.

The designation of Kashkari as the interim head of the new office was necessary because the permanent head of the office, which is a presidential appointee, must be confirmed by the Senate, currently in recess ahead of the November elections.

It is possible Kashkari may never get the job on a permanent basis since the Senate, now controlled by Democrats, will probably leave an interim head in place so that the next president, either Barack Obama or John McCain, can choose a permanent replacement. Paulson has already announced that regardless of who wins the election, he plans to step down as Treasury secretary on Jan. 20 when the next president is sworn into office.

Some analysts were not impressed with the selection of Kashkari.

Robert A. Eisenbeis, a former director of research at the Federal Reserve Bank of Atlanta, said that Paulson should have chosen someone more familiar with the government's response to the savings and loan crisis of the late 1980s and 1990s, when the Resolution Trust Corp., was created to dispose of billions of dollars of assets from bankrupt savings and loans.

"The kind of people that you need are the ones who were associated with RTC and had experience dealing with these large volumes of assets," Eisenbeis said. "Working at Goldman Sachs doesn't qualify you for doing this job."

The selection of Kashkari was one of a number of steps the administration took Monday in an effort to demonstrate it is moving quickly to implement the bailout program.

It issued interim guidelines for the choice of the expected five to 10 asset management firms who will set up a process to buy up to $700 billion of distressed mortgages and mortgage-related assets from financial firms. The hope is that by removing the toxic assets from the firms' books it will encourage banks and other financial institutions to resume more normal lending operations.