How social engineering by government made U.S. vulnerable to Russian scheming

Jan. 29 (Bloomberg) -- Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.

Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics, according to his new memoir, “On The Brink.”

The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities. The Chinese declined, he said.

Taxpayers & China bailed out autos; feds want tickets to Detroit Auto Show in repayment

About a year after Washington began its rescue of two Detroit automakers, so many federal officials want to attend the Detroit auto show that organizers have, for the first time, created a new credential specifically for those in government.

Requests for passes to the show are pouring in from members of Congress, the Department of Transportation and other agencies, Doug Fox, chairman of the 2010 North American International Auto Show, said today.

Taxpayers have provided more than $80 billion in aid to the auto industry.

When the show opens to the press, analysts and politicians Jan. 11, about twice as many federal officials are expected to be in attendance, wearing the new gray and silver passes. The Detroit auto show opens to the public Jan. 16.