John Paulson
John Paulson, a hedge fund billionaire who made millions betting against the U.S. housing market in 2007-2009, is among those likely to lead the Treasury in a second Trump term. Paulson hosted a $50M fundraiser for Trump’s 2024 Presidential race, and was a major fundraiser and Trump campaign economic advisor in 2016.
After Paulson helped get Trump elected in 2016, he pushed Trump to privatize Fannie Mae and Freddie Mac, which holds more than $6.6 trillion in obligations behind mortgage-backed securities, to benefit his investments. Project 2025 Federal Reserve chapter echoes this sentiment, calling for privatizing government-backed entities Fannie Mae and Freddie Mac, thereby redirecting profit that helps fund the government to private corporations instead and raising qualifying credit scores and restricting consumers’ ability to access and afford mortgages.
Paulson is best known for shorting the subprime mortgage market through investing in credit default swaps, which earned him personally $4 billion on those trades. That bet and others—which are depicted in the film, The Big Short, earned Paulson & Co. billions of dollars as the housing market collapsed and its failings cascaded in 2007-2008. His firm then bought numerous properties as our economy crashed, including the insolvent Doral Resort & Spa. The Trump Organization bought that country club, with financing from Deutsche Bank, and rebranded it Trump National Doral. (In 2018, as it faced declining profits and Trump was battling his first impeachment, he sought to make it the host of the G7, and be paid to do so; it also houses the infamous Trump painting bought by the Trump Foundation, which a court order dissolved.)
Paulson’s profits from the subprime crisis were tainted in part by how the system was gamed. For example, Goldman Sachs ended up paying one of the largest fines in history, $550 million, for a joint effort with Paulson on an investment vehicle called Abacus 2007-AC1, a vehicle that allowed some of their clients to bet against the housing market, which Paulson correctly predicted would fail. This meant the hedge fund manager made money while investors lost more than $1 billion.
Paulson spent at least $1 million to try to help Mitt Romney beat Barack Obama in 2012, and then backed Trump in 2016 after he secured the Republican nomination. Paulson then became one of the Trump presidential campaign’s top economic advisers, and Trump floated him as Treasury secretary. Additionally, in April 2024 as Trump has been facing state and federal criminal prosecutions, Paulson hosted a fundraiser at his home in Palm Beach that brought in more than $50 million for Trump, according to Trump’s campaign. Paulson is reportedly on Trump’s short list to be Secretary of the Treasury.
Notably, Paulson’s holdings were puffed up by Trump’s 2016 win: “With Trump’s victory, Paulson—a political donor and economic adviser to the president-elect—is already seeing a payoff. His funds have a stake in Fannie Mae and Freddie Mac, once virtually worthless, whose common-class shares soared more than 80 percent since Election Day.” In 2008, as our economy collapsed and Paulson profited, the U.S. bailed out those government-sponsored enterprises that guarantee mortgages, for a total cost of more than $187 billion. Later, the Obama administration changed the terms of that conservatorship to recover the cost of the bailout.
Also noteworthy, at the height of the Black Lives Matter movement in July 2020, the Paulsons wrote a letter to their daughters’ private school, Spence, accusing it of “anti-white indoctrination” in its curriculum.
This profile has been updated.