But people who sold after his trades made a stupid decision -- to buy overpriced mortgages. We'll live in a better world when rational financial decisions are more rewarding, and that won't happen without making folks like Paulson pretty rich. The thing is, you could make the case that a mortgage boom that went on another year would cost the country 1% of GDP in badly-allocated capital (spent on houses nobody wanted to live in and everyone bought to flip). From that perspective, he's earning a commission of less than 1%.

Ok, that sounds like a more convincing argument than the original one.

Speculators are risking their own money re-aligning badly-allocated capital in the economy and correct prices. If they are right they earn a nice commission.