…his GDP last year would have ranked him 161st out of 229 countries, according to GDP figures compiled in the CIA World Factbook. Mr. Paulson personally (not his hedge fund, but him) made $5 billion last year, according to the Wall Street Journal.
Mr. Paulson, although not commanding armies or navies, nor exerting dominion over territory, by himself made more money than the bottom 68 sovereigns in the CIA survey. Sierra Leone, a sub-Saharan, West African nation of 5.2 million people, ranked just behind Mr. Paulson, with a gross domestic product of $4.8 billion. It had a per capita GDP of $900, which is roughly what Mr. Paulson makes in the time it takes him to blink an eye. Sierra Leone spent 2.3% of its GDP on its military (about $110 million). Mr. Paulson presumably spent nothing, having had the protection required for those many billions provided to him at no extra charge, as an incident of citizenship in the United States. From the Journal article, it is assumed most of his earnings were taxed, if at all, at the capital gains rate of 20%.
Mr. Paulson is what the Street likes to call a “trader”, meaning he facilitates the movement of money such that it will find its highest return. Or that’s the excuse given by financial system apologists when questioned on the ridiculously exorbitant sums of money such “traders” fetch. But money flows to the place where it can earn its highest return like water flows downhill according to the laws of gravity, needing very little in the way of active facilitation. It’s not quite clear why a person such as Mr. Paulson, who was essentially nothing more than a gravity-facilitator, was more valuable to the world than the entire country of Sierra Leone, but there it is. He was.
Mr. Paulson last made this sort of money back in 2007, when he clocked in a little less than Sierra Leone, at $4 billion. In between, he suffered in relative poverty, having had to blink his eyes perhaps several times before the per capita GDP of Sierra Leone would plop into his lap.
Mr. Paulson’s return to getting his fair share is a marker of the times. We are living 2007 all over again. 2007 was to 2008 what 2011 will be to 2012. The good times are back. It seems. For a while. Then, since nothing real has changed, the good times will soon enough be revealed for the illusion that they are. But that won’t be a worry for Mr. Paulson. He’ll surely anticipate the slide, and redirect his gravity-facilitation efforts appropriately. Without people like him, water might otherwise never find its way downhill.