The first question, of course, would be: Is it true? There seems to be few sources for the story. On the other hand, nobody seems to be denying it. Nor does it anybody seem to find it all that improbable either, which is useful evidence in and of itself.
I'm of two minds about this. I wouldn't have much of a problem with, say, black American economist Glenn Loury agreeing to run Haiti's central bank for awhile as an act of charity. On the other hand, if Mrs. Merkel put new Nobel laureate Robert Shiller in charge of the German central bank, I'd be leery. Whether Israel is closer in importance on the world stage to Haiti or Germany is of course a question for you to decide for yourself.
Another question would be: would taking a major post in a foreign government disqualify you for serving your own government in the future. For example, Israel's retiring central banker, economist Stanley Fischer, is a naturalized American citizen. I would presume that means he has given up hopes of an American government position, but I've never seen this issue discussed. I recall that when IMF head Dominique Strauss-Kahn was taken down in NYC in 2011, more than a few American economists started calling for the U.S. government to put its weight behind Fischer to get the IMF job. This struck me at the time as nuts: the IMF job traditionally goes to Europeans, and whatever Fischer is, he's not a European.
And what does that says about the globe's transnational elites? And, why did Larry turn it down? Because he's an American or because the job's just not big enough for him? And how do Summers and Netanyahu get along?
"The faculty of stopping short, as though by instinct, at the threshold of any dangerous thought. It includes the power of not grasping analogies, of failing to perceive logical errors, of misunderstanding the simplest arguments if they are inimical to Ingsoc, and of being bored or repelled by any train of thought which is capable of leading in a heretical direction. In short....protective stupidity."