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Context of 'February 17, 2009: President Obama Signs into Law $787 Billion American Recovery and Reinvestment Act'

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Detroit’s Big Three CEOs testify for more than two hours in a hearing before the Senate Banking Committee, using dire language to describe the financial straits that are threatening to bankrupt their companies. Chrysler LLC CEO Robert Nardelli says that without immediate help, his company could be forced into bankruptcy. “We cannot be confident that we will be able to successfully emerge,” he says. General Motors (GM) Corporation’s CEO, Rick Wagoner, adds that the failure of the industry would be “catastrophic,” causing the loss of 3 million jobs. Ford Motor Company CEO Alan Mulally tells the committee that if one of the automakers failed, the whole industry could be disrupted. “You’re here to get life support,” says ranking minority member Richard Shelby (R-AL). “Why aren’t you making money? How would you pay this money back?”
Financial Losses Worse than Originally Believed - The automakers say that their financial losses were worse than they at first thought, with Nardelli testifying that his company ran through $5 billion this year, including $3.3 billion in the third quarter, with only $6.1 billion on hand to last through the end of the year. Wagoner says that his firm would spend $15 billion by the end of 2008, and another $10 billion in 2009. Wagoner wants $10-$12 billion for GM, while Mulally and Nardelli want $7 billion for their respective corporations. Both Wagoner and Nardelli say that their companies will run out of money in a matter of months. One senator asks if the automakers would be willing to make monthly status reports on cash flow if the Senate agrees to the loan. Nardelli offers to take $1 a year as salary compensation; neither Mulally nor Wagoner did not make the same commitment. Nardelli also committed to Chrysler’s agreeing to consider new fuel efficiency standards. “We’d be open to any requirements,” he says.
Already Cut Costs, Moved to Restructure - The automakers testify how aggressively they have moved to cut costs, restructure, and revamp their product lines to be more competitive with foreign rivals, and say their companies were making progress until they were derailed by the credit crisis that has stalled the global economy and dried up consumer confidence. Auto sales are at their lowest level in at least 15 years, they say, dropping nearly 32 percent in October. As a testament to the seriousness of their financial crisis, the three automakers assure the committee that they would spend the requested $25 billion in the United States; however, they refuse to say that they would not come back for further bailout funding. Wagoner testifies that GM has cut $9 billion in costs since 2005. He touts labor agreements with the United Auto Workers that will further cut wage and health care expenses, and says that improvements in designing and manufacturing vehicles as well as developing fuel-saving technologies will also assist in reining in manufacturing costs. “As a result of these and other actions, we are now matching—or besting—foreign automakers in terms of productivity, quality and fuel economy,” he says. Wagoner assures the committee that the company was moving quickly to right its business. “We have more work to do in all aspects of our business,” Wagoner said. “This is hard stuff.” He said that GM would use some of the money to pay suppliers and pay for part of the Chevrolet Volt program.
UAW President Grilled - In his own testimony, United Auto Workers President Ron Gettelfinger ranks the relative financial health of the Big Three as Ford being the most solvent, with Chrysler at number two, while General Motors may be at or near insolvency by the end of 2008. The UAW chief faces tough questions as well, as Senator Bob Corker (R-TN) pushes back on union work rules and the jobs bank. “I understand Mr. Gettelfinger has done a good job on behalf of all workers not working and being paid,” Corker says, calling the practice unacceptable in other businesses.
Disagreement among Democrats, Republicans - Democrats support a plan to subtract $25 billion from the $700 billion Wall Street bailout package, known as the Troubled Asset Recovery Program (TARP), while Mitch McConnell (R-KY) has joined the White House call to speed up money previously authorized for the automakers through an Energy Department loan program. “To basically change the qualifications of the money that we have already appropriated is a sound way to go forward,” said McConnell. House Democrats and many environmentalists oppose the use of the Energy Department loan, since it is approved only for projects that lead to significant fuel efficiency improvements. Carl Levin (D-MI) says that in order to get a bill, Republicans must write language that explains how they would quickly get $25 billion from the Energy Department program to automakers. But Levin is realistic about the long road they face. “Progress: No. Effort: Hell, yes. Big-time effort,” he says. “We haven’t seen progress and won’t see progress until we see the language from those who want to see the [Energy Department] funds.” Debbie Stabenow (D-MI) says she will “very reluctantly” agree to reworking the retooling loans if that was the only way to get help now. Other Senate allies of the auto industry, including Claire McCaskill (D-MO) and Ken Salazar (D-CO), opposed the proposal to shift $25 billion from TARP. “I’m not sure we want to throw good money after bad,” Salazar says. Max Baucus (D-MT), chairman of the Senate Finance Committee, says it will be nearly impossible to make a deal before Congress adjourns for the year later this week. “Reading the tea leaves, I just don’t think it’s going to happen,” Baucus says. “There’s not enough time given the opposition of the White House and opposition of the other side of the aisle.” Corker echoes the belief that nothing would get done this year, calling the hearings “the first step in a loan application.”
Further Hearings Slated - The CEOs will return to Capitol Hill for a hearing before the House Financial Services Committee on Tuesday, November 25. [Detroit News, 11/19/2008]

Entity Tags: United Auto Workers, Ford Motor Company, Debbie Stabenow, Chrysler, Carl Levin, Alan Mulally, General Motors, Senate Banking Committee, Max Baucus, Rick Wagoner, Robert Nardelli

Timeline Tags: Global Economic Crises

US Treasury Secretary Timothy Geithner announces a much bigger plan to rescue the US financial system than previously predicted or envisioned, including a much greater government role in markets and banks since the 1930s (see March 15, 2008). Although the administration provides few details, one central portion of the plan that investors most desired to learn about creates bad banks that rely on taxpayer and private investor funds to purchase and hold bad assets racked up by the banks from subprime mortgages, derivatives, and credit defaults. An additional focal point of the plan stretches the final $350 billion that the Treasury may use for the bailout, relying on the Fed’s capability to create money. This last tranche of funding allows the government to be involved in the management of markets and banks. For example, with the credit markets, the administration and the Fed propose to expand a lending program that spends as much as $1 trillion as a replacement for the $1.2 trillion decline between 2006 and 2008 for the issuance of securities backed primarily by consumer loans. The third component of the plan gives banks new capital to lend, but banks that receive new government assistance will have to cut the salaries and perks of their executives and limit dividends and corporate acquisitions. Banks must also publicly declare more information about their lending practices. With the newly proposed Treasury requirements, banks will have to give monthly statements on how many new loans they make, yet the plan stops short of ordering banks to issue new loans or requiring them to account in detail for the federal money. The Obama administration’s commitment to flood the banking system with funds will combine the $350 billion left in the bailout fund; the rest of the money will be from private investors and the Federal Reserve. Some market observers, along with some federal legislators and economists, criticize the plan for its lack of details. [New York Times, 2/10/2009]

Entity Tags: Obama administration, US Federal Reserve, US Department of the Treasury, Timothy Geithner

Timeline Tags: Global Economic Crises

According to economists and other finance experts, most of the major US banks are broke, awash in losses from bad bets that overwhelm the banks’ assets. [Link TV, 2/10/2009; Financial Times, 2/10/2009] None of the experts focus on individual banks, and there are exceptions among the 50 largest banks in the country. Consumers and businesses do not need to fret about their federally insured deposits, and even banks that are technically insolvent can continue operating, and could recover their financial health once the economy improves. Until there is a cure for banks’ bad assets, the credit crisis that is dragging down the economy will linger, since banks cannot resume the lending needed to restart commerce.
Suggested Response - Economists and experts say that the answer is a larger, more direct government role than the recently-unveiled Treasury Department plan. The Obama-Geithner plan leans heavily on sketchy public-private investment funding to buy up the banks’ troubled mortgage-backed securities. Experts say that the government needs to delve in, weed out the weakest banks, inject capital into surviving banks and sell off bad assets. “The historical record shows that you have to do it eventually,” said Adam Posen, a senior fellow at the Peterson Institute for International Economics. “Putting it off only brings more troubles and higher costs in the long run.” The Obama administration’s recovery plan could help spur a timely economic spurt, and the value of the banks’ assets could begin to rise. Absent that, the prescription would not be easy or cheap. Estimates of the capital injection needed range from $1 trillion and beyond. By contrast, the commitment of taxpayer money is the $350 billion remaining in the financial bailout approved by Congress last fall.
Pessimism - In a new report Nouriel Roubini, professor of economics at the Stern School of Business at New York University, estimates that total losses on loans by American financial firms and the fall in the market value of the assets they hold will reach $3.6 trillion, up from his previous estimate of $2 trillion. [Global Economic Monitor, 2/10/2009] Of the total, he calculates that American banks face half that risk, or $1.8 trillion, with the rest borne by other financial institutions in the United States and abroad. “The United States banking system is effectively insolvent,” Roubini says. [International Herald Tribune, 2/13/2009]

Entity Tags: Peterson Institute for International Economics, James K. Galbraith, Nouriel Roubini

Timeline Tags: Global Economic Crises

Less than one month after his inauguration, President Barack Obama signs into law a $787 billion recovery package, stating that this will “set our economy on a firmer foundation.” However, Obama reiterates during the bill’s signing ceremony at the Denver Museum of Nature and Science that he will not pretend “that today marks the end of our economic problems, nor does it constitute all of what we have to do to turn our economy around. Today marks the beginning of the end, the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs.” The legislative battle on the bill ended with only three Republican votes in the Senate and none in the House. As president-elect, Obama initially expected to spend between $675 billion and $775 billion on the recovery package, and the final number is almost exactly that. However, Congress included $70 billion worth of tax cuts in the bill they approved, although more than a few economists say $70 billion in tax cuts won’t create as many new jobs as $70 billion in spending would. According to the government’s Recovery (.gov) Web site, the 2009 American Recovery and Reinvestment Act:
bullet Saves and creates more than 3.5 million jobs over the next two years;
bullet Takes a big step toward computerizing Americans’ health records, reducing medical errors, and saving billions in health care costs;
bullet Revives the renewable energy industry and provides the capital over the next three years to eventually double domestic renewable energy capacity;
bullet Undertakes the largest weatherization program in history by modernizing 75 percent of federal building space and more than one million homes;
bullet Increases college affordability for seven million students by funding the shortfall in Pell Grants, increasing the maximum award level by $500, and providing a new higher education tax cut to nearly four million students;
bullet Enacts the largest increase in funding of the nation’s roads, bridges, and mass transit systems since the creation of the national highway system in the 1950s;
bullet Provides an $800 “Making Work Pay” tax credit for 129 million working households, and cuts taxes for the families of millions of children through an expansion of the Child Tax Credit;
bullet Requires unprecedented levels of transparency, oversight, and accountability.
White House press secretary Robert Gibbs says Obama will seek additional stimulus/recovery funding if needed. [New York Times, 2/17/2009; recovery.gov, 2/17/2009]

Entity Tags: Obama administration, Barack Obama, Robert Gibbs

Timeline Tags: Global Economic Crises

Citigroup CEO Vikram Pandit is in talks with the US government to increase the amount of public ownership of the bank in a move both politicians and bank bosses hope will avert the need for the ailing corporation to be taken into FDIC receivership (see March 15, 2008). Talks commenced after Citigroup shares dropped more than 20 percent in late trading on Friday, leaving the business with a share value of $10.6 billion, with balance sheet assets of $1.95 trillion. Government receivership of Citigroup is seen as politically unpalatable, and US taxpayers could conceivably own up to 40 percent of Citigroup. Economists see government takeover of the corporation as evidence of other major banks struggling with insolvency. The failure of major banks will have calamitous repercussions. The US treasury says it remains committed to helping the banking industry recover without taking complete control. “Because our economy functions better when financial institutions are well managed in the private ¬≠sector, the strong presumption… is that banks should remain in private hands,” the Treasury Department said in a joint statement with the Federal Reserve. Speculation that a major Wall Street institution could be taken into public ownership toppled the market on Friday, February 20; likely targets were heavily rumored to be Citigroup and Bank of America. Bank of America lost nearly half its share value in three days before rallying late Friday afternoon. The latest talks center on a Treasury Department proposal to convert preference shares in Citigroup into new ordinary shares. This move would not involve additional taxpayer funds, but taxpayers would surrender the guaranteed dividends that come with preference stock, as well as some degree of protection in the event of a corporate collapse. Serious questions remain, such as the price at which new shares are issued. Estimates of the size of the government’s eventual stake range from 25 percent to 40 percent. With this move, Barack Obama’s administration would become a major presence on Citigroup’s ordinary share register, thus diluting the interests of existing investors, and heightening fears of political pressure being brought on US banks. Some analysts suggest that banks relying on taxpayer bail-outs are being encouraged to focus lending and liquidity on the national US market. [Guardian, 2/23/2009]

Entity Tags: Obama administration, Citigroup, Vikram Pandit, US Department of the Treasury, US Federal Reserve

Timeline Tags: Global Economic Crises

Citigroup logo.Citigroup logo. [Source: Citigroup]The latest government bailout gives Citigroup bond holders excellent terms and doesn’t provide the bank with new money. Instead, Citigroup cut expenses with the elimination of preferred stock dividends, and also converted shares into common equity at an above-market-value of $3.25, positioning itself to take the first hit if it encounters additional losses. Analysts are predicting that the company’s losses will continue to increase. Since the beginning of 2009, Citigroup’s stock has fallen 78 percent. “Debt holders could eventually be required to participate in further government-led restructuring actions,” Standard and Poor’s says. [Bloomberg, 3/2/2009] Citigroup CEO Vikram Pandit tells investors that increasing the bank’s “tangible” common equity from $29.7 billion to as much as $81 billion should “take confidence issues off the table,” about the bank’s loss absorption ability. The bank lost $27.7 billion in 2008, and is predicted to lose $1.24 billion during the first six months of 2009. “There’s no difference here,” says Christopher Whalen, co-founder of Institutional Risk Analytics, a Torrance, California risk-advisory firm. “It won’t fix revenue, and you’re still going to see loss rates.” Whalen says that the government’s efforts are mainly protecting other financial institutions and foreign goverments that are Citigroup bonds holders. “The taxpayer is funding the operating loss and protecting the bondholders,” Whalen notes. “The subsidy for the banks will become one of the biggest lines in Washington’s budget.”
Government Should Organize Citigroup, AIG Bondholders - Whalen also says it would be better if the government organized Citigroup and insurer American International Group Inc. bondholders, since the insurer received a $150 billion US bailout, and also made a deal with the government to convert some of its debt to equity. US government investment fell by more than 50 percent, and the government plans to convert up to $25 billion of its preferred stock to common shares, gaining a 36 percent stake in the bank. At Friday’s closing price of $1.50, government investment is worth approximately $11.5 billion. The bank itself has a stock market value of $8.2 billion as of market closing on February 27.
Analyst: Investors Should Avoid Citigroup Shares - Richard Ramsden, head of a group of analysts at Goldman Sachs Group, recommends that investors avoid investing in Citigroup shares: “It is unclear whether this is the last round of capital restructuring, which means that existing equity may be further diluted in the future.” The bank’s move to convert preferred shares to common equity led Moody’s Investors Service to adjust its senior debt rating for the bank from A3 to A2. Standard and Poor’s also changed its outlook on the bank’s debt from negative to stable. “Citi will face a tough credit cycle in the next two years, which will likely result in weak and volatile earnings,” S&P analyst Scott Sprinzen says. “We cannot rule out the possibility that further government support may prove necessary.” With the first two Citigroup rescue bailouts, the US Treasury bought $45 billion of preferred stock, and the Federal Reserve and FDIC guaranteed the bank against all but $29 billion of losses on a $301 billion portfolio of assets. With the third bailout, the Treasury, the Government of Singapore Investment Corporation, Saudi Prince Alwaleed bin Talal, and other preferred stockholders, agreed to take common stock at $3.25 a share, giving up dividends. The chairman of the House Ways and Means Committee, Charles Rangel (D-NY), says: “The administration and the past administration have tried so many different ways that we can only hope and pray that this time they get it right. It seems like with the banks it is a never-ending thing.” [Bloomberg, 2/28/2009]
Third US Rescue Forces Citigroup Board Changes - The Obama administration demonstrated its willingness to force changes on executives at top banks that receive taxpayer-funded rescue packages by pressing Citigroup to reorganize its 15-member board with new, more independent members. The move sends a message to Wall Street that there are consequences when taxpayer dollars are used to save them. “The government is the new boss, and the new executive committee is no longer on Park Avenue,” says Michael Holland who, as chairman and founder of New York’s Holland & Co., manages nearly $4 billion in investments. [Bloomberg, 3/2/2009]

Entity Tags: Government of Singapore Investment Corporation, Christopher Whalen, Charles Rangel, Alwaleed bin Talal, AIG (American International Group, Inc.), Federal Deposit Insurance Corporation, Vikram Pandit, US Department of the Treasury, Citigroup, Richard Ramsden, Moody’s Investors Service, Standard & Poor’s, Michael Holland, Institutional Risk Analytics, Scott Sprinzen, US Federal Reserve

Timeline Tags: Global Economic Crises

Regulatory reports on Bank of America, Citibank, HSBC Bank USA, JP Morgan Chase, and Wells Fargo indicate that, as loan defaults of every kind soar, the institutions face “catastrophic losses” should economic conditions “substantially worsen.” Already suffering as a result of what the banks term “exotic investments,” the reports disclose that, as of December 31, 2008, current net loss risks from derivatives—quasi-insurance bets tied to loans or other underlying assets—have swelled to $587 billion. According to McClatchy journalists Greg Gordon and Kevin G. Hall, obscured in the year-end regulatory reports that they reviewed were figures reflecting a jump of 49 percent net loss in just 90 days.
Bailout Money Shoring Up Reserves - Taxpayer bailout money has already shored up four of the five banks’ reserves, with Citibank receiving $50 billion and Bank of America $45 billion, in addition to a $100 billion loan guarantee. According to their quarterly financial reports as of December 31:
bullet JP Morgan had potential current derivatives losses of $241.2 billion, overrunning its $144 billion in reserves, and future exposure of $299 billion.
bullet Citibank had potential current losses of $140.3 billion, outstripping its $108 billion in reserves, and future losses of $161.2 billion.
bullet Bank of America reported $80.4 billion in current exposure, lower than its $122.4 billion reserve, but $218 billion in total exposure.
bullet HSBC Bank USA had current potential losses of $62 billion, over three times its reserves, and potential total exposure of $95 billion.
bullet San Francisco-based Wells Fargo, which took over Charlotte, N.C.-based Wachovia in October 2008, reported current potential losses totaling almost $64 billion, below the banks’ combined reserves of $104 billion, but total future risks of about $109 billion. [McClatchy Newspapers, 3/9/2009; Idaho Statesman.com, 3/9/2009]

Entity Tags: Kevin G. Hall, Citibank, Greg Gordon, Bank of America, HSBC Bank USA, Wells Fargo Bank, N.A., Wachovia Bank, N.A., JP Morgan Chase

Timeline Tags: Global Economic Crises

In a speech to the Tulsa Chamber of Commerce, Federal Reserve Bank of Kansas City President Thomas Hoenig declares that US banks’ ability to remain viable during a deeper recession—while undergoing federal government stress tests—demonstrates that most don’t need more taxpayer money. “Although the United States has several thousand banks, only 19 have more than $100 billion of assets,” Hoenig says. “After supervising authorities evaluate their condition, it is likely that few would require further government intervention.” Designed to demonstrate how much extra capital banks may need to survive a deeper economic downturn, the stress tests are to conclude by April 30, 2009, with the 19 biggest banks’ test results to be disseminated to President Barack Obama in meetings with his economic team. Hoenig reiterates his view that the government shouldn’t prop up failing financial institutions but take them over temporarily and wind them down, as with the 1984 takeover of Continental Illinois National Bank & Trust Co. “I encourage Congress to enact a new resolution process for systematically important firms,” he says. “There has been much talk lately about a new resolution process for systemically important firms that Congress could enact, and implement it as quickly as possible, but we do not have to wait for new authority. We can act immediately, using essentially the same steps we used for Continental. An extremely large firm that has failed would have to be temporarily operated as a conservatorship or a bridge organization and then reprivatized as quickly as is economically feasible. We cannot simply add more capital without a change in the firm’s ownership and management and expect different outcomes.” Hoenig declares that calling a firm “too big to fail” is a “misstatement” because a bank deemed insolvent “has failed.” “I believe that failure is an option,” he says. After the government’s fourth rescue of American International Group Inc. (AIG), Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke called for new powers to take over and sell off failing financial companies, and also called for stronger regulation to constrict risks that might endanger the financial system. The Federal Deposit Insurance Corporation has the authority to take over failing firms, and dispose of their assets, but no such authority exists for non-banking financial firms such as a hedge fund or AIG, which have extensive links throughout the banking system. During a Q&A after his speech, Hoenig tells the audience that the Fed must be prepared to make a timely removal of its stimulus to deter a period of high inflation that could be likened to that of the early 1980s. “You cannot wait until you know for sure the economy is recovering,” Hoenig says, adding that “employment growth tends to lag” and may not be the best indicator of recovery. “We will watch every indicator of data that suggests we have a recovery under way.” He also says that if the US manages its economy well, the US dollar should remain the world’s reserve currency. “It is a matter of running your economy properly,” he says. “When the US does that, and I think we will, I think we will remain the largest, most successful reserve currency on the face of the earth.” [Bloomberg, 4/9/2009]

Entity Tags: Federal Deposit Insurance Corporation, AIG (American International Group, Inc.), Ben Bernanke, US Federal Reserve, Thomas Hoenig, Timothy Geithner, US Department of the Treasury

Timeline Tags: Global Economic Crises

President Barack Obama implements a home mortgage rescue plan that he says will prevent as many as 9 million Americans from losing their homes to foreclosure. Obama says that turning around the battered economy requires stemming the continuing tide of foreclosures. He says that the housing crisis that began last year set many other factors in motion and helped lead to the current, widening recession. “In the end, all of us are paying a price for this home mortgage crisis,” Obama says. “All of us will pay an even steeper price if we allow this crisis to deepen. The American dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. While this crisis is vast, it begins just one house and one family at a time.” Of the nearly 52 million US homeowners with a mortgage, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their home is currently worth. Obama’s plan contains three initiatives:
bullet Fannie Mae and Freddie Mac homeowners owing between 80 and 105 percent of what their homes are worth can refinance their mortgage. Prior to implementation of the rescue plan, only those borrowers with at least 20 percent home equity could refinance. Refinancing at a lower rate may save borrowers thousands of dollars yearly on their mortgage payments.
bullet Banks will be encouraged to work with homeowners to modify existing mortgages, which is different from refinancing. The Bush administration plan, “Hope for Homeowners,” passed late in 2008, tried to do what Obama has now accomplished, but, since banks were not eager to modify terms to help people stay in their houses, the Bush plan is considered a failure. Under Obama’s plan, banks who received TARP funding will have to participate and, if they do not, Obama may request that the Congress allow bankruptcy judges to modify mortgage terms. Before Obama’s new plan, judges already had the power to modify mortgage terms on a homeowner’s second and third homes, although not on their primary residences.
bullet Interest rates will be kept low by having the Treasury Department buy up mortgage-backed securities from Fannie Mae and Freddie Mac, in the hope of re-inflating the market for mortgage-related products, even if Treasury may be overpaying for toxic assets in a market with few, if any, other buyers. [Mother Jones, 2/18/2009; CNN, 4/16/2009]

Entity Tags: US Department of the Treasury, Barack Obama, Fannie Mae, Freddie Mac, George W. Bush, Troubled Asset Relief Program

Timeline Tags: Global Economic Crises

The US Treasury Department concludes that financial firms American Express, Bank of New York Mellon, Branch Banking & Trust (BB&T), Capital One Financial, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Northern Trust, State Street, and US Bancorp can return $68.3 billion in emergency bailout funds to government coffers although some of the banks have assets that are still government-controlled, with warrants worth approximately $4.6 billion. Twenty-two smaller banks already returned $1.9 billion. Morgan Stanley receives Treasury permission to return its TARP funding despite bank stress test details released early last May ordering the bank to increase its capital cushion fund by raising $1.8 billion. In a Treasury release, Secretary Timothy Geithner explains, “These repayments are an encouraging sign of financial repair, but we still have work to do.” President Obama comments that the ability of companies to repay the government does not detract from the need for reform. “The return of these funds does not provide forgiveness for past excesses or permission for future misdeeds,” he says. “This is not a sign that our troubles are over. Far from it.” [United Press International, 6/9/2009; New York Times, 6/9/2009]

Entity Tags: Capital One Financial, Bank of New York Mellon, American Express, Branch Banking & Trust (BB&T), US Bancorp, US Department of the Treasury, State Street, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Northern Trust, Barack Obama, Timothy Geithner

Timeline Tags: Global Economic Crises

Since implementing a program to help millions of homeowners restructure their mortgages to prevent foreclosure, only 235,247 loans have actually been modified, according to the US Treasury Department in its first progress report. After the plan was announced in February, the first banking institutions began accepting applications in April. Between now and 2012, the Obama administration says it is on track to assist 4 million homeowners. The report occurs a week after the administration summoned institutions to Washington to discuss speeding up the program after large numbers of borrowers’ complaints that assistance was barely occurring. The Obama administration plans 500,000 modifications by November 1, and hopes to hold the institutions responsible for their performance with the release of monthly reports that allow consumers to see which banks are slow to implement the plan. So far, institutions have extended offers to 15 percent or 406,542 homeowners in danger of losing their homes, with uneven performances by 38 participating servicers. Morgan Stanley’s subsidiary, Saxon Mortgage Services, tops the list with 25 percent of its delinquent loans placed in trial modifications. Saxon is followed by Aurora Loan Services, a Lehman Brothers Bank subsidiary, with 21 percent. GMAC Mortgage, partially owned by the US government, has put 20 percent of its troubled loans into trial modifications, while major banks JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America have late loan trial modifications of 20 percent, 15 percent, 6 percent, and 5 percent respectively. The lenders acknowledge that they must improve their performance, and say that they are committed to President Obama’s foreclosure prevention plan, stressing that they were already performing modifications prior to the administration’s program. Wells Fargo says that it will soon have the ability to send eligible borrowers trial modification agreements within 48 hours. “We set a high bar for ourselves in terms of customer service, and we didn’t hit that bar in all cases in the first seven months of this year,” says Mike Heid, co-president of Wells Fargo Home Mortgage, “We have added 4,000 employees to our loan workout division this year. JPMorgan Chase says it has another 150,000 applications in need of processing and is currently training an extra 950 workout specialists hired earlier in 2009, bringing its modification staff to 3,500 people. “We know we’ve got more work to do,” says Chase spokesman Tom Kelly. “But the bank is pleased with its performance to date.” CitiGroup’s mortgage agency, CitiMortgage, added 1,400 staffers to its modification team, with 800 dedicated to loss mitigation at its recently opened Tucson, AZ call center. It began placing troubled borrowers in trial modifications in early June. “In the next quarter, one can expect the pace will be even higher,” Sanjiv Das, CitiMortgage head, says. Bank of America says it needs to improve its reach out efforts, while noting that it holds nearly one in four trial modifications offered under the Obama plan and has extended nearly 100,000 offers, although only 28,000 trial modifications are in process. Bank of America purchased mortgage giant Countrywide Financial last year, and has the largest number of eligible delinquent loans with almost 800,000. Borrowers have been pressuring the Obama administration as well as servicers and are complaining that servicers are not responding to applications and calls, are losing their paperwork, and are not making timely decisions. Servicers say they are increasing their staffing and upgrading their computer systems to handle the hefty increase in applications. Says Michael Barr, assistant US Treasury secretary for financial institutions, “We are working with servicers to ensure that they can adequately implement the program and servicers are increasing staff and training, but they must also treat borrowers more respectfully and respond in a much timelier manner.” [CNN News, 8/9/2009]

Entity Tags: Countrywide Financial, Wells Fargo Bank, N.A., Bank of America, Aurora Loan Services, US Department of the Treasury, Citigroup, Tom Kelly, Sanjiv Das, GMAC, JP Morgan Chase, CitiMortgage, Lehman Brothers, Morgan Stanley, Michael Barr, Saxon Mortgage Services

Timeline Tags: Global Economic Crises

A portion of the Forbes magazine cover featuring Dinesh D’Souza’s article on President Obama.A portion of the Forbes magazine cover featuring Dinesh D’Souza’s article on President Obama. [Source: Forbes magazine / PBS]In a cover story for Forbes magazine, conservative author and pundit Dinesh D’Souza claims that President Obama is using the Oval Office to pursue Kenyan anti-colonial policies once advocated by his father, Barack Obama Sr., a Harvard-trained economist and Luo tribesman from Kenya. D’Souza has a long history of race-baiting and using inflammatory rhetoric (see March 15, 1982, October 1982, October 4, 1990, and June 5, 2004). [Forbes, 9/27/2010] The story is loosely based on D’Souza’s upcoming book, The Roots of Obama’s Rage. [Washington Post, 9/16/2010] It is dated September 27, 2010, but is published on the Internet two weeks earlier. After tarring Obama as “the most antibusiness president in a generation, perhaps in American history” and a strong advocate of expanding the federal government into all aspects of America’s commercial existence, D’Souza turns to his perception of Obama’s “strange” foreign policy. He cites several instances of Obama’s stated intention to reach out to Muslims across the globe, calling these initiatives “anomal[ies],” and proposes an explanation: Obama does not hold to the American dream, in any form, but instead hews to what D’Souza characterizes as the “Kenyan” dreams of his father, who D’Souza says was a champion of anticolonialism. The elder Obama advocated that native Kenyans “control the economic means of growth” in their country, D’Souza quotes him as writing in 1965, and also wrote, “We need to eliminate power structures that have been built through excessive accumulation so that not only a few individuals shall control a vast magnitude of resources as is the case now.” Obama, D’Souza writes, is following his father’s policies in his governance. “It may seem incredible to suggest that the anticolonial ideology of Barack Obama Sr. is espoused by his son, the president of the United States,” D’Souza writes. “That is what I am saying. From a very young age and through his formative years, Obama learned to see America as a force for global domination and destruction. He came to view America’s military as an instrument of neocolonial occupation. He adopted his father’s position that capitalism and free markets are code words for economic plunder. Obama grew to perceive the rich as an oppressive class, a kind of neocolonial power within America. In his worldview, profits are a measure of how effectively you have ripped off the rest of society, and America’s power in the world is a measure of how selfishly it consumes the globe’s resources and how ruthlessly it bullies and dominates the rest of the planet. For Obama, the solutions are simple. He must work to wring the neocolonialism out of America and the West. And here is where our anticolonial understanding of Obama really takes off, because it provides a vital key to explaining not only his major policy actions but also the little details that no other theory can adequately account for.” D’Souza cites Obama’s support for offshore oil drilling in Brazil, his support for repealing the Bush-era tax cuts for the wealthy, and his refusal to consider nationalizing American financial or health care institutions as “evidence” that he intends “to decolonize these institutions, [to bring] them under the government’s leash.” D’Souza goes even farther, accusing Obama of idolizing the 9/11 terrorists as anticolonial heroes whose acts were justified by their ideology; D’Souza cites Obama’s support for the building of a Muslim community center several blocks from the site of the World Trade Center, and his support for the release of one of the Lockerbie bombers on medical grounds, as “evidence” of his favoring of Islamist terrorists. Finally, D’Souza cites the statements of one of Obama’s grandfather’s wives, Sarah Obama, and Obama’s own writings about weeping at his father’s grave in Kenya as conclusive evidence of Obama’s secret anticolonial ideology. “Obama takes on his father’s struggle, not by recovering his body but by embracing his cause,” D’Souza writes. “He decides that where Obama Sr. failed, he will succeed. Obama Sr.‘s hatred of the colonial system becomes Obama Jr.‘s hatred; his botched attempt to set the world right defines his son’s objective. Through a kind of sacramental rite at the family tomb, the father’s struggle becomes the son’s birthright.” D’Souza calls colonialism a “dead issue,” and terms Obama “the last anticolonial.” [Forbes, 9/27/2010] Many conservatives have long accused Obama of being un-American because of his Kenyan ancestry (see February 25, 2008, August 1, 2008 and After, October 8-10, 2008, June 25, 2009, June 29, 2009, and August 11, 2009). D’Souza’s article will be lambasted by a wide swath of media figures (see September 12, 2010 and After) and will be shown to be riddled with factual errors (see September 16, 2010). It will be praised by former House Speaker Newt Gingrich, who is widely believed to be pursuing the 2012 Republican presidential nomination (see September 12, 2010 and After). [Media Matters, 9/12/2010]

Entity Tags: Sarah Obama, Forbes magazine, Dinesh D’Souza, Barack Obama, Barack Obama, Sr

Timeline Tags: US International Relations, Domestic Propaganda

The progressive media watchdog organization Media Matters disproves a number of “factual” claims in a recent article by conservative author Dinesh D’Souza, who claims that President Obama is driven by “anticolonial” rage sparked by his alleged identification with his Kenyan father (see September 12, 2010). Media Matters notes the following:
bullet D’Souza claims that Obama “supported the conditional release” of Abdel Baset al-Megrahi, the “Lockerbie Bomber,” because he sees al-Megrahi as a “fellow anticolonialist,” when in reality the Obama administration informed Scotland that it opposed al-Megrahi’s release.
bullet D’Souza claims that Obama supports “oil drilling off the coast of Brazil but not in America,” in the form of a $2 billion Export-Import (Ex-Im) Bank loan to Brazil for exploratory drilling. In reality, the Obama administration had no say in the Ex-Im’s decision, and all five members of the bank’s board of directors were Bush administration appointees. (Forbes will conduct a fact-check after publication that garners harsh criticism from the bank over D’Souza’s misrepresentation of facts—see September 23-24, 2010.)
bullet D’Souza claims that Obama spent the first 17 years of his life “in Hawaii, Indonesia, and Pakistan.” D’Souza admits that he erred in this claim, as Obama never visited Pakistan until he was 20, and then only for three weeks.
bullet D’Souza claims that Obama’s June 2010 speech in response to the Gulf oil spill did not focus on cleanup strategies, but instead lambasted the US for its outsized oil consumption. While Obama did mention America’s disproportionate oil consumption, the central focus of his speech was the federal government’s response to the spill. (Forbes will correct this error and acknowledge that Obama’s speech indeed focused on cleaning up the oil spill—see September 23-24, 2010.)
bullet D’Souza claims that the 2009 economic stimulus (see November 18, 2008, February 10, 2009, February 13, 2009, February 17, 2009, February 23, 2009, February 28, 2009, March 9, 2009, April 9, 2009, April 16, 2009, June 9, 2009, and August 9, 2009) failed to reduce unemployment; the Congressional Budget Office (CBO) has stated that unemployment would be as much as 1.8 percent higher without the stimulus, numbering up to 3.3 million people who would not have jobs. Private analysts such as the Council of Economic Advisers agree with the CBO’s assessment.
bullet D’Souza claims that a controversial New York City Islamic center, which he calls a “mosque,” is to be built “near the site where terrorists in the name of Islam brought down the World Trade Center… at Ground Zero.” In reality, the proposed Islamic community center, Cordoba House (later renamed Park51), is two city blocks away from the site of the World Trade Center.
bullet D’Souza claims Obama does not believe in “American exceptionalism,” and says that Obama’s dreams are not “the American dreams,” but “something else… certainly not the American dream as conceived by the founders.” In reality, Obama has said time and again that he unequivocally believes in American exceptionalism, and has repeatedly stated his pride in being an American.
bullet D’Souza claims that Obama sees his father as a “hero” who “represented a great and noble cause.” In reality, Obama’s memoir, Dreams from My Father, offered a largely critical portrait of Obama’s father. As Washington Post media critic Howard Kurtz notes, “[T]hat book describes a young man’s struggle to understand his African roots and the father he never really knew, and offers a largely critical portrait of the Harvard-educated man who left his family.” Media Matters cites numerous other historians and reviewers who read Obama’s memoir as being highly critical of his father. As Reason Magazine’s Tim Cavanaugh wrote on the day D’Souza’s article was published, the memoir is “a narrative of Obama’s non-relationship with his father,” and continued, “[T]here is no evidence for the claim that the elder Obama bequeathed his son a coherent or even a partial political philosophy.”
bullet D’Souza claims that Obama opposes US military action in Afghanistan, because of his “anticolonial” bent. In reality, Obama campaigned on the idea that the US invasion of Afghanistan was an “absolutely vital” response to 9/11, and has made statements to that effect as far back as October 2001. As president, Obama has increased troop levels in Afghanistan and has said that US “security is at stake in Afghanistan.”
bullet D’Souza claims that Obama views “free market” as “code words for economic plunder,” saying that Obama views “the rich as an oppressive class, a kind of neocolonial power within America.” In reality, Obama has repeatedly praised the free market, and has consistently supported America’s large and small businesses in his economic policies. [Media Matters, 9/16/2010]

Entity Tags: Tim Cavanaugh, Howard Kurtz, Congressional Budget Office, Barack Obama, Abdel Baset al-Megrahi, Media Matters, Park51, Dinesh D’Souza, Council of Economic Advisers, Export-Import Bank

Timeline Tags: Domestic Propaganda

Shikha Dalmia.Shikha Dalmia. [Source: Hip Hop Republican (.com)]Forbes columnist Shikha Dalmia, a senior analyst at the conservative Reason Foundation, lambasts a recent article in Forbes by conservative author Dinesh D’Souza, in which D’Souza claimed President Obama is secretly driven by a pro-Kenyan, anti-colonial world view (see September 12, 2010). Dalmia writes with some sardonicism, “Writers these days are supposed to cultivate a niche, and D’Souza seems to have homesteaded the intellectual goofiness spot all for himself.” Even most right-wing pundits, Dalmia observes, have refused to countenance D’Souza’s tract, with the notable exception of Fox News’s Glenn Beck and Newt Gingrich (see September 12, 2010 and After). She briefly recounts some of the many factual errors, misrepresentations, and outright lies that fill D’Souza’s article (see September 16, 2010), and then takes issue with one of D’Souza’s central theses: that Obama is trying to help poorer countries at the expense of the American economy. Dalmia writes: “If Obama were seriously motivated by a moral desire to protect poor countries from being ruined by excessive American consumption then his biggest priority would be to rein in this consumption. But that is the exact opposite of what he has done since assuming office. His entire economic agenda is one big and desperate attempt to boost American consumption. He propped up financial institutions and increased government oversight of them not to use them as a tool for some future global redistribution—or ‘decolonization’—as D’Souza bizarrely suggests, but for far more mundane purposes: making easy credit available for American businesses to grow their way out of the recession. Likewise, the notorious cash-for-clunkers program was nothing if not a scheme to stimulate auto consumption. And ObamaCare’s individual mandate practically forces Americans to consume more health care. All of this seems more in line with Keynesian stimulation—rather than Kenyan anti-colonialism.… D’Souza’s thesis is so obviously flawed that one has to wonder what caused him to propose it. Accusing Obama of Keynesiasm or socialism or crony-capitalism—as the rest of us Obama critics are doing—is damning enough. Why does D’Souza need to go further?” Dalmia concludes by pointing out that D’Souza seems to obsess over the polygamy among the Kenyan members of Obama’s family. In what Dalmia calls D’Souza’s “repeated… gratuitous digs” at the practice, she asks, “What is the point of this except to remind Americans that Obama is a Muslim—the most dreaded of ‘others’?” Dalmia concludes: “Ultimately, D’Souza’s rumination reveals less about how Obama thinks and more about how D’Souza thinks. It shows not that Obama is motivated by malice toward America, but D’Souza is motivated by malice toward Obama. How pathetic.” [Forbes, 9/17/2010]

Entity Tags: Barack Obama, Shikha Dalmia, Forbes magazine, Dinesh D’Souza

Timeline Tags: Domestic Propaganda

Forbes Magazine, after weathering weeks of intense criticism for its recent cover story by conservative pundit Dinesh D’Souza alleging that President Obama is driven by “Kenyan anticolonialism” (see September 12, 2010 and September 12, 2010 and After), agrees to an unusual post-publication fact-checking process to see if, as many have alleged, many of D’Souza’s allegations are erroneous (see September 16, 2010). The agreement was reached after Forbes’s Washington bureau chief met with White House press secretary Robert Gibbs, though Forbes spokeswoman Monie Begley says the decision to fact-check the article was made because of the “general clamor in the news media” and not because of White House pressure. [New York Times, 9/24/2010] During the meeting, Gibbs asked the bureau chief if the magazine bothered to fact-check D’Souza’s article. [Media Matters, 9/25/2010] Forbes has already issued one minor correction to the article on its Web site, noting that D’Souza had “slightly misquoted” President Obama in a speech he’d made about the Gulf oil spill; D’Souza claimed that Obama did not focus on “cleanup strategies,” but Forbes now acknowledges that “Obama’s speech did discuss concrete measures to investigate the oil spill and bring it under control.” D’Souza’s article was drawn from an upcoming book, The Roots of Obama’s Rage, to be published by conservative publishing house Regnery on October 4; Regnery publicist Kathleen Sweetapple says in a statement, “[T]here are a couple of minor errors that are completely inconsequential; what the critics are fuming about are not factual errors but disagreements of interpretation.” Forbes staffers contact the Export-Import Bank to check D’Souza’s claim that the Obama administration had directly supported the bank’s decision to lend $2 billion to Petrobras, Brazil’s state-owned oil company, for offshore drilling. D’Souza wrote that Obama supported the deal “not so oil ends up in the US. He is funding Brazilian exploration so that the oil can stay in Brazil.” Observers have noted that Obama had no say in the bank’s decision, and all five of the bank’s board of directors are Bush-era appointees. As part of the bank’s response, senior vice president Kevin Varney posts a comment on D’Souza’s blog highly critical of the author’s decision not to contact the bank before publishing the article. “I received a call yesterday from Nathan Verdi, a fact checker at Forbes, who was calling to fact check your article after it was published,” Varney writes. ”(Is this how journalism works now?)” Varney tells a New York Times reporter that the Petrobras loan “was begun in 2008 with career staffers and approved in 2009 by five Bush-appointed board members.” Deals such as this one, Varney continues, do not usually rise to the level of presidential awareness. For D’Souza to cite the deal as evidence of “an anticolonial, Kenyan ideology” on Obama’s part is “preposterous, it’s false, and it’s wrong.” [New York Times, 9/24/2010]

Entity Tags: Monie Begley, Export-Import Bank, Dinesh D’Souza, Barack Obama, Forbes magazine, Kevin Varney, Petrobras, Robert Gibbs, Nathan Verdi, Kathleen Sweetapple, Regnery Publishing

Timeline Tags: Domestic Propaganda

Mike Huckabee (R-AR), the former governor of Arkansas, currently a host on Fox News and a potential 2012 presidential candidate, speculates that President Obama may have been born in Kenya. If this were true, Obama would not be eligible to be president. Huckabee states, incorrectly, that Obama grew up in Kenya. Huckabee is appearing on a radio show hosted by conservative Steve Malzberg. The host brings up the subject of Obama’s “controversial” birth certificate (see July 20, 2008, August 15, 2008, October 8-10, 2008, October 16, 2008 and After, November 10, 2008, December 3, 2008, August 1-4, 2009, May 7, 2010, Shortly Before June 28, 2010, and Around June 28, 2010), as recently revived by billionaire Donald Trump (see February 10, 2011), and asks, “Don’t you think we deserve to know more about this man?” Huckabee responds: “I would love to know more. What I know is troubling enough. And one thing that I do know is his having grown up in Kenya, his view of the Brits, for example, very different than the average American. When he gave the bust back to the Brits, the bust of Winston Churchill, a great insult to the British (see June 29, 2009). But then if you think about it, his perspective as growing up in Kenya with a Kenyan father and grandfather, their view of the Mau Mau Revolution in Kenya is very different than ours because he probably grew up hearing that the British were a bunch of imperialists who persecuted his grandfather.” PolitiFact, the nonpartisan, political fact-checking organization sponsored by the St. Petersburg Times, believes that Huckabee is echoing discredited claims recently made by conservative author Dinesh D’Souza, who accused Obama of being an “anti-colonialist” and covert supporter of Kenyan extremists (see September 12, 2010, September 12, 2010 and After, September 12, 2010 and After, September 16, 2010, September 17, 2010, September 23, 2010, and September 23-24, 2010). Contrary to Huckabee’s assertions, Obama did not grow up in Kenya. He had virtually no contact with his Kenyan father and never met his paternal grandfather, whom D’Souza wrote had such a powerful influence on him. Instead, Obama grew up in Hawaii and Indonesia. After the interview on Malzberg’s show, Huckabee corrects his error, saying: “On Monday, while on Steve Malzberg’s radio show on New York’s WOR Radio, I was asked about the President Obama’s birth certificate issue. In my answer, I simply misspoke when I alluded to President Obama growing up in ‘Kenya’ and meant to say Indonesia.” PolitiFact notes that in the past, Huckabee has warned against buying into the idea that Obama is not a US citizen, affirmed Obama’s Christianity, and praised Obama as a role model for fathers (see February 23, 2011). [St. Petersburg Times, 2/28/2011]

Entity Tags: Dinesh D’Souza, Mike Huckabee, Steve Malzberg, Barack Obama, PolitiFact (.org )

Timeline Tags: Domestic Propaganda

Pamela Geller, the conservative blogger who has for years attacked President Obama’s parentage and his citizenship (see July 20, 2008, October 24, 2008,August 4, 2009, and April 27, 2011), now calls Obama “a b_stard, literally and figuratively.” Geller’s characterization is part of a long tirade about Obama’s father, Barack Obama Sr., based on information about the elder Obama cited by the Arizona Independent, which obtained the Immigration and Naturalization Service file on Obama Sr. (see April 28, 2011). Geller accuses Obama’s father of “impossible philandering, multiple wives, and bad behavior,” says the elder Obama was forced to leave Harvard University and the United States itself, and blames his “polygamy” on his Muslim faith. She also says the portrait Obama has painted of his father in his first memoir, Dreams of My Father, is completely false, though Obama never knew his father and depicted his father in an unflattering light. Geller writes: “He was a terrible man—immoral and irresponsible. His treatment of women was incredibly callous and cruel—not to mention the abandoment of his children and his multiple wives. President Obama is indeed a bastard, literally and figuratively. What a horrible man. Dreams of My Father. Indeed. Perhaps this explains President Obama’s animus towards the United States” (see November 8, 2007, Before October 27, 2008, January 16, 2008, April 9, 2009, June 5, 2009, June 25, 2009, June 29, 2009, September 14, 2009, November 17, 2009, February 2, 2010, June 11, 2010, September 12, 2010, September 12, 2010 and After, September 12, 2010 and After, September 16, 2010, September 17, 2010, September 23, 2010, September 23-24, 2010, March 2011, April 15, 2011, and April 27, 2011). A New York Times analysis of the same information concludes that Obama Sr. had a tribal wife in Kenya at the time he married Obama’s mother, Stanley Ann Dunham, and explains: “We call this ‘polygamy’; they see it as moving on with life. First marriages fizzle out in Africa, as they do everywhere else. The difference is that culturally, legal divorce is very frowned upon: It’s viewed as shirking financial and familial responsibilities. Epidemiologists, who have studied this cultural pattern because of its impact on the spread of HIV, often say that Africans tend to have ‘concurrent’ relationships, while Americans have ‘consecutive’ ones. That’s a wild generalization, but the point is that Obama Sr. would not have viewed his first marriage back in Kenya as something disreputable. It clearly became worthy of investigation to school and immigration officials, though, after he started fooling around with white women.” Geller calls the hints of racism towards Obama Sr. ridiculous, and cites fellow conservative blogger Jack Cahill as providing “proof” that Obama Sr.‘s marriage to Dunham was possibly invalid, making Obama the “b_stard” that she accuses him of being. [Pamela Geller, 4/29/2011] The progressive media watchdog organization Media Matters notes that Geller’s attack on Obama and his father is part of a new initiative by “birthers” to besmirch Obama by attacking his father (see April 29, 2011). [Media Matters, 4/29/2011]

Entity Tags: Pamela Geller, Arizona Independent, Ann Dunham, Barack Obama, Media Matters, Barack Obama, Sr, New York Times, US Immigration and Naturalization Service

Timeline Tags: Domestic Propaganda

Critics accuse an unnamed advisor to the Romney campaign of making a racially insensitive remark to British reporters when the advisor accused President Obama of not understanding the shared “Anglo-Saxon” heritage of the US and the United Kingdom (see July 24-25, 2012). Obama’s father was Kenyan, and many of Obama’s critics have accused Obama of not being sufficiently American (see October 1, 2007, January 16, 2008, October 16, 2008 and After, Around November 26, 2008, February 10, 2009, March 9, 2009, March 18, 2009, March 25, 2009, March 27, 2009, March 30-31, 2009, March 31, 2009, April 1, 2009, April 1-2, 2009, April 3-7, 2009, April 6, 2009, April 6-7, 2009, April 9, 2009, June 2, 2009, June 5, 2009, June 25, 2009, June 29, 2009, July 23, 2009, August 1-4, 2009, August 6, 2009, September 17, 2009, October 2, 2009, October 13, 2009, November 17, 2009, December 3, 2009, December 17, 2009, May 7, 2010, June 11, 2010, Shortly Before June 28, 2010, August 4, 2010, August 19, 2010, September 12, 2010, September 12, 2010 and After, September 16, 2010, September 18, 2010, September 23, 2010, October 22-23, 2010, March 28, 2011, April 7, 2011, April 27, 2011, April 27, 2011, May 23-24, 2011, June 10, 2011, January 13-20, 2012, and June 20, 2012) and of not working hard enough to bolster relations between the US and the United Kingdom. Critics also accuse Mitt Romney of trying to create a division between the US and the United Kingdom where none exists. Romney’s campaign is denying the remarks were ever made. [Daily Telegraph, 7/25/2012]
Vice President, Obama Campaign Advisor Respond - Vice President Joseph Biden is quick to lambast the Romney campaign for the comment. “Despite his promises that politics stops at the water’s edge, Governor Romney’s wheels hadn’t even touched down in London before his advisors were reportedly playing politics with international diplomacy,” he says in a statement, “attempting to create daylight between the United States and the United Kingdom where none exists. Our special relationship with the British is stronger than ever and we are proud to work hand-in-hand with Prime Minister Cameron to confront every major national security challenge we face today. On every major issue—from Afghanistan to missile defense, from the fight against international terrorism to our success in isolating countries like Iran whose nuclear programs threaten peace and stability—we’ve never been more in sync. The comments reported this morning are a disturbing start to a trip designed to demonstrate Governor Romney’s readiness to represent the United States on the world’s stage. Not surprisingly, this is just another feeble attempt by the Romney campaign to score political points at the expense of this critical partnership. This assertion is beneath a presidential campaign.” Obama campaign advisor David Axelrod calls the comments “stunningly offensive” in a Twitter post, which states, “Mitt’s trip off to flying start, even before he lands, with stunningly offensive quotes from his team in British press.” [CBS News, 7/25/2012; Business Insider, 7/25/2012; Guardian, 7/25/2012]
British Historian Questions Perception of 'Divisions' between Two Nations - British historian Tim Stanley says the perception of “divisions” between the US and the UK is overblown, and that many British citizens “love [Obama] because they see him as an antidote to the misdirected machismo of the Bush years. Few of us are keen to revive an alliance that led to the bloody mess of Iraq and Afghanistan.” More directly, the advisor’s “Anglo-Saxon” reference is obsolete and easily interpreted as racist. “Both countries are more multicultural than ever before, and both have forged alliances with countries that are decidedly un-Anglo-Saxon: the US is part of a trading bloc with Mexico and the UK is trapped in the engine room of the [European Union] Titanic,” Stanley writes. “Many will therefore interpret the choice of words as a clumsy attempt to play the race card, exploiting the impression that Obama is anti-British because he is of African descent.” Stanley writes that the advisors seemed more interested in painting Obama as a “left-winger” who lacks an understanding of the relations between the two nations than trying to make a racially insensitive remark, but he predicts the media will fasten onto the remark and label the Romney campaign, and perhaps Romney himself, as being racist to some degree. [Daily Telegraph, 7/25/2012]
British Columnist: Romney Should Not 'Cast Us All Back into the Dark Ages' - Ian Vince, a columnist with The Guardian, asks what exactly the Romney campaign might mean by stating a desire to restore “Anglo-Saxon” relations between the two nations. Vince notes the thousand years of culture and heritage contributed by the Normans, the Romans, the Danish Jutes, and the Vikings, among others, and the huge number of non-“Anglo-Saxons” who consider themselves proud British citizens. He concludes by observing, “Mitt Romney would be wise not to cast us all back into the Dark Ages.” [Guardian, 7/25/2012]
Liberal News Site: Comments Part of Larger Attack on Obama's Heritage, Patriotism - Judd Legum of the liberal news Web site Think Progress says the comments are part of a much broader series of attacks on Obama’s heritage and patriotism by the Romney campaign. Legum calls the comments “the latest attack by the Romney campaign on Obama’s multi-cultural heritage.” Last week, Legum reminds readers, Romney campaign co-chair John Sununu told reporters Obama has no understanding of the “American system” because he “spent his early years in Hawaii smoking something, spent the next set of years in Indonesia,” and said Obama needs to “learn how to be an American.” Later that day, Romney himself called Obama’s policies “extraordinarily foreign.” [Think Progress, 7/25/2012]
Neoconservative Magazine: Story Not Believable, Romney's Denial Should Settle Question - However, Alana Goodman of the neoconservative Commentary magazine says she did not believe the story from the moment it was reported. She says the story hinges entirely on a single unnamed source (the Romney advisor, who spoke on condition of anonymity), and accuses the Obama campaign of “scrambling to pump air into” the controversy surrounding the comments. She concludes, “Unless a reporter is able to verify who said this and what his role is in the campaign, Romney’s denial should put this story to rest.” [Commentary, 7/25/2012]

Entity Tags: Willard Mitt Romney, Joseph Biden, Judd Legum, John Sununu, Mitt Romney presidential campaign (2012), Ian Vince, David Axelrod, Alana Goodman, Barack Obama, Tim Stanley

Timeline Tags: 2012 Elections

A portion of the cover of the DVD ‘Dreams From My Real Father.’ The subtitle is ‘A Story of Reds and Deception.’A portion of the cover of the DVD ‘Dreams From My Real Father.’ The subtitle is ‘A Story of Reds and Deception.’ [Source: Opposing Views (.com)]Bill Armistead, the chairman of the Alabama Republican Party, publicly claims President Obama is the illegitimate son of Frank Marshall Davis, an American labor activist and organizer for the Communist Party USA. Armistead makes his claim to a meeting of the Eastern Shore Republican Women in Fairhope, Alabama, where he recommends a movie entitled Dreams From My Real Father, a play on Obama’s 1995 memoir, Dreams From My Father. The film was directed by Joel Gilbert, who has described it thusly: “Admittedly, at age 18, Obama arrived at Occidental College a committed revolutionary Marxist. Dreams from My Real Father presents the case that Frank Marshall Davis, a Communist Party USA organizer and propagandist, was Obama’s real father, both biological and ideological, and indoctrinated Obama with a political foundation in Marxism and an anti-white world view.” Armistead tells the audience: “We have to win this election. This is about our country. Our country will not be the same. I’m convinced, if Obama wins, our children and grandchildren will not live under the same conditions that we’ve lived in these wonderful years. Obama has a different ideology than we do.” He then answers a question from the audience about another movie critical of Obama, 2016: Obama’s America, by conservative pundit and author Dinesh D’Souza (see September 12, 2010 and September 16, 2010). Armistead replies: “If you haven’t seen it, you should. But I’m going to tell you about another movie. The name of it is Dreams From My Real Father. That is absolutely frightening. I’ve seen it. I verified that it is factual, all of it. People can determine.” Armistead does not explain how he has “verified” the accuracy of the movie’s claims. The story of Armistead’s comments is quickly picked up by local and national press outlets, including Salon and TPM Muckraker, which say that Armistead has gone “birther.” The reference is to discredited conspiracy theories claiming that Obama is not a naturally-born American citizen. Miranda Blue, a spokesperson for the liberal People for the American Way (PFAW), says the film is a “fringe birther movie” and adds, “This is the first we’ve heard of a political leader embracing… Gilbert’s conspiracy theory.” [Mobile Press-Register, 9/20/2012] According to Blue, “A trailer for the film cuts to various right-wing bogeymen including Jeremiah Wright, Bill Ayers, and ACORN in between misleadingly edited snippets of speeches by the president and Michelle Obama.” She writes, “Gilbert’s film has divided the birther movement, since its assertion that Davis is Obama’s real father would seem to be incompatible with the theory that the president was born in Kenya.” Jerome Corsi, a writer for the conservative WorldNetDaily and a veteran “birther” (see August 1, 2008 and After, July 21, 2009, and September 21, 2010), supports the film, but California lawyer and “birther” Orly Taitz (see August 1-4, 2009, October 29, 2009, and April 27, 2011) says Corsi is “trying to kill the case by making up an American citizen father for Obama.” The film has reached a wide audience, with conservative media outlets such as the New York Post promoting it and Gilbert sending a million copies of the film on DVD to voters in Ohio. Gilbert plans to send another million copies to voters in other swing states. Gilbert says the mainstream media is ignoring the film “because they support national health care.” Gilbert told a recent National Press Club audience that Obama and his political advisor David Axelrod are both “red diaper babies,” children born of Communist parents and brought up to advance the cause. Obama, he said, is pursuing what he says was Davis’s dream of imposing a Stalinist-Marxist dictatorship on America, and that Obama worked with the now-defunct Association of Community Organizations for Reform Now (ACORN) to cause the housing crisis as part of a plan to, he said, “use minorities and the poor to collapse capitalism.” [Right Wing Watch, 9/20/2012; Salon, 9/20/2012] The film is narrated by an Obama impersonator. It contains a disclaimer noting that many of the scenes are “re-creations of probable events, using reasoned logic, speculation, and approximated conversations.” [TPM Muckraker, 9/21/2012] The tale of Obama being fathered by Davis was promulgated most recently by conservative agitator Andy Martin (see Before October 27, 2008) and other far-right sources.

Entity Tags: Jerome Corsi, Barack Obama, Association of Community Organizations for Reform Now, Anthony Robert Martin-Trigona, Alabama Republican Party, Bill Armistead, Frank Marshall Davis, Orly Taitz, Joel Gilbert, David Axelrod, Miranda Blue

Timeline Tags: Domestic Propaganda

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