Poster Boy

Mom always told us not to bet money we couldn’t afford to lose.

“No, it’s not a sin,” she told us. “Not if it’s your own money.

“I just never saw the point. I can have a lot more fun spending money than losing it to the house.”

But what if you are the house?

John Paulson, founder and president of the hedge fund Paulson & Co., grew up privileged in Queens, NY. He went on to graduate first in his class from NYU Leonard N. Stern School of Business, then collected a Harvard MBA, but those things didn’t make him a Master of the Universe.

To become a certified billionaire (he’s ranked #39 on this year’s Forbes 400 list of richest Americans), Paulson had to muster the guts and savvy to bet against the sub-prime market, ensuring that as housing markets tanked across the country, jobs evaporated and hundreds of thousands of Americans were forced out of their homes, he and his clients profited not handsomely… not extravagantly… but obscenely.

What does this titan of finance have to say about those left behind, the angry sign shakers of Occupy Wall Street?

“Instead of vilifying our most successful businesses,” Paulson wrote in a statement released yesterday, “we should be supporting them and encouraging them to remain in New York City and continue to grow.”

John Paulson knows what's good for you

He went on to lecture, “Paulson and Co. and its employees have paid hundreds of millions of dollars in New York City and New York state taxes in recent years and have created over 100 high paying jobs in New York City since its formation.”

If around 100 employees spun off hundreds of millions of dollars worth of taxes in recent years, you’re gonna need a government budget-level calculator to do the math on their earnings.

Paulson’s statement attracted cheers from market insiders who are tired of living in a spotlight of populist rage — such as the proud market manipulators who posted signage at the Chicago Board of Trade reading “We Are the 1%” — but it probably had less to do with politics than with distracting investors.

Business Insider reports that one of Paulson’s biggest funds is down 47 percent for this year. Another large fund under Paulson’s management dropped 32 percent. Big John has a far better track record betting against our economy than betting on it.

Bad bets were made, but at least they were made substantially with OPM (“other people’s money”). Paulson and company will be OK. Hedge fund managers still collect their management fees when they underperform the market. They just don’t get billions of dollars in performance bonuses.

This is America, where no billionaire is left behind. If they really tank the market — bring construction to a halt, turn Americans out into the street, crater the job market, sink a couple of sovereign nations — Congress can always go back to the well and shake down the last tattered remnants of our once-proud middle class to bail them out again.

Then the most successful businesses can go back to manufacturing that special strategic commodity that makes our country strong:  debt.

For other people.