Pray For Karl Marx

God recently allowed the so-called bubble to burst. The wise guys running those real estate finance firms, with cute names like Fannie Mae and Freddie Mac, approved thousands of loans to people who obviously could never afford to repay them. When those rotten loans started stinking to high heaven, they were packaged neatly, wrapped in pretty paper and pedaled as miracle investments. That, in turn, became the greatest hour for government bankers from Munich to Reykjavik. Balance sheets resembled houses of cards grown to skyscraper proportions, and eventually (how could it end otherwise?) they collapsed like the Tower of Babel. The failure of Lehman Brothers investment bank started it all. The secretary of the treasury, who called an emergency $700 billion rescue package his own, allowed Lehman to go down the drain.

We all know about the cycles of capitalism. I’m a schooled Marxist myself, so nothing about capitalism surprises me. But during a visit to my London club, I recently ran into a close friend of Henry Merritt Paulson, Jr., better known as “Hank.” Hank Paulson actually stood in the eye of the hurricane that destroyed the house of cards; he was that above-mentioned secretary of the treasury. Paulson’s friend told me a story that I can’t get out of my head. Paulson, as everyone knows, had been CEO of the investment bank Goldman Sachs prior to becoming George W. Bush’s secretary of the treasury. But he actually started in the political world: History ties him to the Watergate scandal during the Nixon era, when he served as an assistant to the legendary John Ehrlichman of the infamous White House “German Gang.”

So Paulson knows all the tricks, whether in politics or business. From his early years when he had to make do with annual salaries in the $15 to 30 million range, he managed to accumulate a net worth estimated at $700 million. He has arrived at the global centers of power. We’re told that when President Bush asked him to solve the Fannie and Freddie problems, he answered, “Mr. President, we’re going to move quickly and take them by surprise. The first sound they’ll hear is their heads hitting the floor.” That’s how everyone imagines it is on Wall Street.

Then my friend describes the other side of the coin to me: Paulson is a member of the First Church of Christ, Scientist, that sect of Christian science that rejects all forms of medical treatment, for example. Paulson himself says that whenever he sought advice about the economic crisis, he turned to prayer. When he was on his last legs, he poured the sleeping pills his doctor prescribed for him down the toilet and turned instead to prayer. How does the Christian Scientist prayer go? “There is no life, truth, intelligence, nor substance in matter. All is infinite Mind, and its infinite manifestation, for God is All in All. Spirit is immortal Truth; Matter is mortal error. Man is not matter, but spirit.”

The Americans led us through the international financial crisis with that prayer on their lips. I’m stunned! Not even Karl Marx ever warned me of that abyss.