Bank Reparations: How ‘great’ was the greatest trade?, we set the stage—and I asked you what you thought about the ethics of this scene that led to lots of red ink for lots of Americans. But, there also was a certain “greatness” to this clever move that already is being called “the greatest trade ever.” So, today’s first question is: How much money did Paulson & Co. reap by fabricating super-toxic financial products that were designed to fail?

Before I give you the answer, consider this: These super-toxic products weren’t real; they were “synthetic.” These were “imaginary” products, says George Soros, which “mimicked” the original mortgaged-backed securities and created “imaginary value out of thin air.” They were created for one reason: to fail. By betting that they would, Paulson & Co. made a lot of money.

How much? $26 billion, says Gregory Zuckerman in “The Greatest Trade Ever.” Paulson got about $6 billion; his firm and its clients got about $20 billion.

It’s important to point out that what Paulson & Co. did was legal. There are no allegations of wrongdoing. And, many other players made a pile of money in the synthetic product game, though none hit the mother-of-all jackpots like Paulson did. I’ve seen at least one blogger call Paulson a “hero” and his story “inspirational.”

Do you agree? Do you find Paulson heroic?

Was any redeeming social value created? Were jobs created? Is the world a safer place? Do we have new technology? A cure for some dreadful disease? If anything of social value was created, I just don’t see it.

What I do see is what economists call “negative externalities.” This is the deleterious impact of a decision or action by one party on other parties who didn’t have a choice in the matter and whose welfare was not considered. Pollution is the classic example. Deals such as these create economic pollution—a few benefit but many bear the costs. Should the polluters be called to compensate?

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