"The rich rules over the poor, And the borrower becomes the lender's slave."
- Proverbs 22:7 New American Standard Bible

On the night of July 12, Fannie Mae Chief Executive Officer Daniel Mudd was having a quiet night with his wife and a glass of wine when his phone rang. The person calling was Treasury Secretary Henry Paulson and he was very worried.
Fannie Mae, the biggest mortgage finance company in the history of the world, was in trouble. It's stock prices had dropped 45% since the start of the year. It's borrowing costs were rising as creditors became worried about the chances of Fannie Mae defaulting on its debt. "We're trying to solve a crisis of confidence," Paulson told Mudd after he explained the taxpayer bailout designed by the Bush Administration. "Would this do it?"

It seems that Paulson's boss had called him just a few hours earlier and explained in no uncertain terms that America was in for an economic nightmare if the American taxpayer didn't backstop Fannie Mae.

The problem was his boss in this case wasn't President Bush.
It was China.

Investors in Asia, the biggest foreign owners of Fannie Mae's $3 trillion of bonds, were asking the Treasury to bolster the government- sponsored company and its smaller competitor, Freddie Mac, said three people with knowledge of the talks.

The next afternoon, before financial markets opened Monday in Asia, Paulson announced the rescue plan, saying he would seek authority to buy unlimited equity stakes in the companies and their bonds if needed, while the Federal Reserve would lend directly to Fannie and Freddie. Congress included the proposals in a broader housing bill that President George W. Bush signed into law last week.

Freddie and Fannie rely on foreign institutions. Investors and central banks outside the U.S. own about $1.3 trillion of Fannie and Freddie's corporate and mortgage bonds, according to the Treasury. Chinese institutions are the biggest holders in Asia.

For some reason most Americans don't seem to care that 10% of our GDP has just been pledged in a bailout (that we can't possibly afford) that disproportionately benefits wealthy foreign investors. I honestly can't fathom the reason for this indifference, but that's not the point of this diary.
If the American public can't shake itself out of this malaise over its taxpayer money being directly funneled overseas, then perhaps the American public can find in itself a reason to care that the most important domestic legislation today is being directed by foreign governments. To put it another way, the politicians that you vote for are becoming puppets of foreign governments like China.

Paulson had visited China just a few months earlier and failed to win any concessions from China concerning their currency practices. He also caved in to China last December.

The reason I point this out is because Paulson met with the Chinese President just two weeks after the Bear Stearns collapse.
A month later Paulson was on his way to the middle east.

United States Treasury Secretary Henry Paulson will fly to the UAE and other Gulf states this week to reassure regional governments on their funds in the US following recent furore about the role of their investments.

At the same time that America was entering the worst financial crisis since the Great Depression, our Treasury Secretary, instead of tending to the domestic upheaval, was jet-setting around the world like an international salesman.

To a large extent, that is exactly what the Treasury Department has become - an agency to sell American debt to foreigners.

When they no longer want our debt, they will come for our assets.
Unfortunately, America doesn't have many companies worth purchasing. So in order to maintain our unsustainable lifestyles of excess consumption with no savings, we are selling our infrastructure. Since much of our infrastructure is in poor condition, this usually means selling our taxpayer-built highways to foreign investors at rock-bottom prices.

Chicago built a toll-way; it brought $1.83 billion, leased for 99 years to a foreign financial group.

Indiana built a toll-way; it brought $3.85 billion, leased for 75 years to the same foreign financial group.

Texas wants to build a toll-way; the offer is $7.2 billion for 50 years.

Governments are going berserk looking for highways, bridges, and other municipally-owned revenue-producing infrastructure that may be leased to private operators for big bucks up front. Government officials praise the idea as the perfect answer to budget shortfalls. The idea is sort of like manna from heaven for the current officials; they get tons of cash to spend, but will be long gone when the people who are paying the bill begin to want accountability from their government officials.

This idea of selling off (long-term leasing) of American infrastructure is fundamentally flawed.

It's fundamentally flawed for a 1st-world nation. For a 3rd-world nation selling off infrastructure for pennies on the dollar to foreigners makes perfect sense. When foreigners own everything worth owning then they will also call all the shots. Your vote will mean nothing.

Soon the maps of Latin America will start at the Canadian border.