The Masters of the House

I'm reading Michael Lewis' book about the collapse of the subprime mortgage market, The Big Short: Inside the Doomsday Machine, which I can recommend to you. It's about how a small group of people made billions betting that the subprime mortgage market was going to collapse – which it did.

On one hand, they deserve credit for all the work they did to understand the flim-flam job the investment banks were running (if you have any doubt about that, read the book). On the other hand, they became billionaires without actually doing something worthwhile. Bill Gates and Steve Jobs pioneered an industry and employed thousands on the road to making their billions. These guys placed bets. And the investment banks' need to cover those bets just made the 2008 collapse that much worse.

One of the guys who shows up in The Big Short, John Paulson, also popped up in a revealing NY Times article the other day about how Wall Street feels about the Occupy Wall Street protests – dismissive, though usually privately. But Paulson had actually released a statement to the press.

The top 1 percent of New Yorkers pay over 40 percent of all income taxes, providing huge benefits to everyone in our city and state .... Paulson & Company and its employees have paid hundreds of millions 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. [My emphasis.]

Are you surprised to learn that Paulson employees are major contributors to the coffers of John Boehner?

As I make my way through The Big Short, I can't help thinking of a passage in Victor Hugo's Les Misérables. Having just given a fascinating description of the Battle of Waterloo from the French perspective, Hugo describes the scene of carnage afterward. A sunken road in the countryside...

... was filled with horses and riders inextricably heaped together. Terrible entanglement. There were no longer slopes to the road; dead bodies filled it even with the plain, and came to the edge of the banks like a well-measured bushel of barley. A mass of dead above, a river of blood below....

As night falls on the battlefield, a lone figure is seen making its way among the corpses.

He looked about. He passed an indescribably hideous review of the dead. He walked with his feet in blood.

Suddenly he stopped.

A few steps before him, in the sunken road, at a point where the mound of corpses ended, from under this mass of men and horses appeared an open hand, lighted by the moon.

This hand had something upon a finger which sparkled: it was a gold ring.

The man stooped down, remained a moment, and when he rose again there was no ring upon that hand.

This is our introduction to Thénardier, or "The Master of the House," as he's known in the popular musical made from the book.