Over the past year, Dick Morris has repeatedly used anti-Obama rhetoric and stoked fears about the economy on Fox News, in his latest book, and in videos for the right-wing website Newsmax. Newsmax has used those videos to the promote financial-services products it sells, which the website has pushed by playing on similar anti-Obama fears. Morris has been paid by Newsmax to use his email list to plug such products; he builds his email list through his website, which he often promotes on Fox News.
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In this report:
- Newsmax drives sales of its financial products by using anti-Obama rhetoric and stoking fear of hyperinflation.
- Newsmax has paid Morris to use his email list to promote those products.
- Through his email list and in appearances on Newsmax webcasts, Morris has explicitly endorsed Newsmax's financial-services products.
- Morris builds his email list through his website, which is frequently promoted during his Fox News appearances.
- In his Newsmax appearances, on Fox, and in his latest book, Morris has echoed the anti-Obama rhetoric and predictions of hyperinflation Newsmax uses to promote its products.
- Morris has repeatedly used his Fox platform to shill for groups he is affiliated with.
Newsmax uses anti-Obama rhetoric to drive sales of its financial products
As Media Matters for America has detailed, since President Obama's inauguration, right-wing website Newsmax has repeatedly used anti-Obama rhetoric and stoked fear of hyperinflation to drive sales of the financial-services products it offers, including:
- Initial Aftershock offer included book, trial newsletter subscriptions, access to webcast. On January 26, an email by Newsmax Media CEO Christopher Ruddy sent to Newsmax's mailing list announced Newsmax's Aftershock offer, which included a "free" (after spending $4.95 for "shipping and handling") copy of the book Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdownby David Wiedemer, Robert A. Wiedemer, and Cindy Spitzer (John Wiley & Sons, 2010). The offer also included free trial subscriptions to three Newsmax financial newsletters, each of whichmust be individually canceled during their respective trial periods to avoid being charged a full year's subscription to them. According to Ruddy's email, readers who ordered the book were provided access to "an exclusive Internet broadcast I'm filming with Fox News analyst Dick Morris along with an esteemed panel of experts."
- Aftershock webcast promotes Newsmax's "Money Matrix Insider." Newsmax created a special, password-protected website, AftershockProfits.com, which hosted a February 25 webcast. The ultimate goal of the webcast was to promote what it called the "Money Matrix Insider" -- a method of investing in foreign currency exchange markets. Newsmax is charging $1,495 for the package (PDF) -- described as a $1,000 discount off the regular "membership price" -- which includes instructional DVDs, tips and alerts, and access to a "vast, password-protected Web site [where] you will be delivered members-only articles, weekly videos and audio commentary, the track record, and the ability to ask questions or suggest topics to be discussed in weekly commentaries." The web page touted the importance of being "one of the first 1,000 to order today" at the discounted price.The page touted a "Potential Reward" of "$137,000 (or more) Legally in Your Pocket in the Next Year Alone!"
- The "Call to Arms" scheme: $1,295 to get stock tips from Ruddy's "private financial weapon." On May 7, 2009, Newsmax hosted "A Call to Arms," a "national internet webcast" which invited viewers to pay $1,295 for a package including a year's worth of stock tips from Ruddy's "chief financial adviser." Ruddy wrote (PDF) that the "Million Dollar Secret Code" he promoted in the "Call to Arms" is based on the stock-picking of analyst David Frazier, whom Ruddy called his "private financial weapon." Ruddy stated that he was investing $1 million of Newsmax's money in the promotion, adding, "David believes he can bring a 50% to 70%-plus return over the next 12 months to this $1 million." The promotion would provide "About 36 Massive Profit/Minimum Risk Plays," in which "[y]ou will be given guidance about exactly what to buy, at what price, and how much. David Frazier will provide you with all of the research and analysis behind each recommendation. And you will get a 48-hour head start on me, before I can buy the exact same stock recommendations."
Newsmax's Aftershock promotion deal featured Morris' seal of approval
Ruddy: "Dick Morris agrees that every American investor should read this book to secure their financial freedom." In his January 26 email, Ruddy wrote in large, bold type: "Dick Morris agrees that every American investor should read this book to secure their financial freedom." Ruddy wrote that responding to his email would put the responder on a "VIP Waiting List" in order to "claim your copy of this book and reserve a spot to view an exclusive Internet broadcast I'm filming with Fox News analyst Dick Morris along with an esteemed panel of experts."
Morris urged email list to sign up for Newsmax's Aftershock book promotion in order to access webcast. In a February 10 email to his list, after suggesting that "major inflation" was likely, Morris wrote:
Newsmax has asked me to team up with them in a financial webinar to elaborate my views and answer questions concerning the serious issues presented in Aftershock.
To view this important internet broadcast all you need to do is secure one of the copies of Aftershock that my friend, Christopher Ruddy, the CEO and Editor in Chief of Newsmax, has secured.
He believes this book is so important to your financial well-being that he is giving it away for free. I suggest you claim one of these quickly fleeting copies - you can do so by clicking here.
Newsmax promoted scheme on Morris' mailing list. Subscribers to Morris' mailing list received emails from Newsmax about the Aftershock promotion, including on March 4 and March 11. Newsmax was described as a "paid sponsor."
TV ad for promotion highlights Morris blurb. In April, Newsmax began offering the initial promotion -- a copy of Aftershock, plus the trial newsletter subscriptions -- in TV ads airing on Fox Business. Among the blurbs for the book included in the ad is one from Morris: "Aftershock ... is a must read!"
Aftershock webcast, website tout Morris' employment by Fox. The front page of AftershockProfits.com features a letter from Ruddy telling readers that on the website, "You also can view a recently filmed, exclusive webinar featuring Fox News analyst Dick Morris." During the webcast, a caption identified Morris as a "Fox News Analyst & Commentator":
Morris bashes Obama in Money Matrix video: "[T]he cancer's dead, now we're suffering from the chemotherapy." In the February 25 webcast, Morris was introduced as "the man Time magazine once called the most influential private citizen in America" -- a claim that came from a September 1996 Time article published shortly before Morris was ousted from Bill Clinton's re-election campaign after it was revealed that he had a relationship with a prostitute. During the webcast, Morris plugged the Aftershock book and attacked President Obama as promoting economic policies that would result in "more inflation" and "huge increases in interest rates." From the video:
ROOT: Well, you know, I just finished interviewing Robert Wiedemer, the co-author of Aftershock. I'm sure you've read Aftershock. What did you think about its bold predictions?
MORRIS: Well, I thought it was a very good book. I thought that he really makes the point that the events that we've experienced over the last year are not going to be isolated occurrences. They stemmed from something and they will lead to something. And you can't go through the kind of disruption we've had in the financial system and, much more importantly, the kind of ill-conceived remedies for dealing with it of the Obama administration without having tremendous consequences. And that's why the concept of the word "aftershock" I think is a particularly good one because we had the shock of the financial crisis, but then we're going to have the aftershock.
ROOT: Interestingly enough, you mentioned shock and aftershock, and of course, your famous book is called Catastrophe. What comes after the aftershock? Catastrophe.
MORRIS: Well, I think that the aftershock will be a catastrophe. We have to understand that the disease we had, which was the financial collapse and the recession which it caused, is basically coming to an end. And what we are entering now is the results of the cure, not the results of the disease. You know, the cancer's dead, now we're suffering from the chemotherapy. And the therapy that we've had of huge budget deficits, massive increases in government spending, soon to be big increases in taxes, and then huge increases in interest rates, all of which are now inevitable, you're dealing with a situation where the cure will be many times worse than the disease ever was. In fact, it reminds me of the old medieval doctors who used to bleed their patients, you know, to get rid of the evil spirits in their veins. And that would cure them, and when it didn't and they were worse and worse, they said, ah, we know the solution -- take out more blood, get rid of more evil spirits. So finally the poor son of a gun died. And that's kind of what Obama's like. He's saying, well, he's sick, let's spend more money and increase the deficit. Ah, he is not recovering. Well, let's spend more money and increase the deficit even more. And that is going inevitably to lead to inflation.
Morris warned that Obama will raise taxes in an effort to "make things worse." In a March 5 video posted to the Aftershockprofits.com website, Morris claimed that in the 1990s, "the only way we balanced the budget, the only way we eliminated the deficit, was to cut the capital gains tax from 28 to 20 [percent] and eliminate it on homeowners who sell their homes for [$]250[,000] or less." By contrast, he said, "Obama is heading in exactly the opposite direction. He's going to raise the capital gains tax, raise the income tax, raise the dividend tax, raise the inheritance tax, maybe add a value-added tax on top of it, all of which are designed to make things worse, not better."
Morris: Obama "elbowing aside the small businesses" to borrow money. In a March 15 video posted to the Aftershockprofits.com website, Morris said that, because the Obama administration is financing the recently passed job-creation package out of deficit spending rather than out of tax revenue, Obama is "going to the loan window, elbowing aside the small businesses, borrowing the money himself, and then lending a piece of it to the small businesses and saying, 'Now go create jobs.' Whereas if he simply got out of the way and let the small business directly borrow the money, you could create many, many more jobs."
Morris paid by Newsmax to send anti-Obama email plugging "Call to Arms" promotion, then endorses Newsmax's product
Morris participated in webcast, was paid to tout it to his mailing list. In a May 4, 2009, "Urgent Message" to his email list, Morris warned that Obama is leading the country toward "socialism," "rocketing inflation," and a possible second recession. Morris stated that he had "agreed to participate in a special seminar online called 'The Call To Arms' hosted by my friend Christopher Ruddy, CEO of Newsmax as well as famed former CNN anchor Bob Losure," and advised his readers to sign up for the webcast in order to "protect your wealth and investments from the far-reaching hands of Barack Obama and the Democrats in Washington." Morris explained that "[e]ven though they are paying me to send you this e mail; I have, in fact, invested my own money with them because I think they are onto something":
I have been warning that President Barack Obama is leading America down a dangerous path to socialism. But, en route, he will take us through an even longer recession than we need to have; rocketing inflation, and perhaps a second downturn to cure the inflation.
All this will have grave implications each of our personal assets and stock portfolios.
Many people are worried -- and they have good reason to worry.
I believe it's extremely important for Americans to take steps now to protect their money and their financial freedom.
So I agreed to participate in a special seminar online called "The Call To Arms" hosted by my friend Christopher Ruddy, CEO of Newsmax as well as famed former CNN anchor Bob Losure -- scheduled for Thursday, May 7th.
Even though they are paying me to send you this e mail; I have, in fact, invested my own money with them because I think they are onto something. We expect upwards of 250,000 people to participate.
I want to encourage you to sign up for this "Call to Arms" online meeting. There is no charge to attend. After you sign up, they will give you FREE access to a members-only website. This site will help you protect your wealth and investments from the far-reaching hands of Barack Obama and the Democrats in Washington.
In webcast, Morris attacks Obama for "leading America into socialism," endorses "Secret Code." During his appearance on the May 7, 2009, "Call to Arms" webcast, Morris stated, "I think that Obama definitely is leading America into socialism." He also commented that "of course" Obama's policies will lead to "huge inflation," adding, "I don't see how any expert could disagree with that." He concluded that "we're looking here really at the recession prolonged by Obama's reckless spending and borrowing, which raises interest rates, then a period of inflation when we come out of the recession, and then probably a second recession."
Later in the interview, the event's host, former CNN Headline News anchor Bob Losure, asked Morris, "David Frazier is heading 'Your Secret Million Dollar Code, and I think you know Chris Ruddy. He's investing a million dollars in his portfolio to track this code. Now is this something you'd recommend to people?" Morris replied, "Well, I'm not putting in a million, but I sure am putting my own money into it." He also suggested that the "Million Dollar Code" was "a strategy" people could use to "keep yourself safe" from "the kind of offensive Obama is launching against the American economy."
In identifying Morris, Losure noted that "you've seen appear regularly on Fox." During Morris' appearance, on-screen text identified him as a Fox News analyst:
Warning of Obama's "depressflation," Morris urges readers to buy newsletter that gives him a cut of each subscription
Morris: "I receive a percentage of each subscription sold, but even if I didn't" I'd recommend it. On March 16, 2009, Morris sent out an email with the subject line, "THE COMING 'DEPRESSFLATION'...AND YOUR MONEY." Recommending that his readers subscribe to the Global Stock Investor newsletter published by investment adviser Nicholas Vardy, Morris wrote:
You may recall that, in one of my recent columns, I coined the term "depressflation" to describe the inevitable result of the Democrats' plans to"rescue" the economy.
A "depressflation," I explained, would be like the "stagflation" of the 1970s, only worse: massive inflation, even hyper-inflation, together with Depression-like economic stagnation.
Why is this inevitable? Because with a bi-partisan consensus that deficits are vital in fighting the crisis (or easing the pain) there is no constraint on Obama and his party. The sky is the limit on spending, to the tune of a trillion-plus dollars over the next two years alone.
And there are only two ways to pay for it: (1) printing more money, which causes inflation, and (2) hiking taxes, which kills investment, businesses and jobs.
Then the question will be: When will we realize that government intervention is magnifying, not solving the problems that caused the crisis? When will the patience of the public with Obama's remedies run out?
My guess is that it won't be until 2012 -- or after.
In the meantime, however, there are ways to protect yourself and your family from the coming "depressflation."
It's crucial to understand: Hard times for America does not necessarily mean hard times for you. As a very wise investment expert of my acquaintance, Nicholas Vardy, likes to say, "No matter what the state of financial markets, there is always a strategy out there that can make you money."
Morris added: "Full disclosure: I receive a percentage of each subscription sold, but even if I didn't, I'd want you to know about this amazing service. Nicholas' advice is rock solid. If you check into it, you'll thank me later."
Links in the email go to a special page on the Global Stock Investor website which identifies the newsletter as "As Recommended by Dick Morris":
Morris, Fox News hosts tout Morris' website, which he uses to boost email list
Morris repeatedly promotes his own website during Fox appearances. According to a Nexis transcript search, Morris' website, dickmorris.com, was referenced by either Morris or his interviewer in at least 24 separate appearances on Fox News programs between January 1 and April 1.
Intro to Morris website is a prompt to join his mailing list. The first thing visitors see when visiting dickmorris.com is a page asking to join his email list:
Morris's email list has been specifically promoted on Fox. On the February 22 edition of Fox News' Hannity, Sean Hannity introduced Morris and told viewers, "be sure to check out his Web site, DickMorris.com. You can get his columns for free. Absolutely free." Morris replied, "I'll e-mail them to you," to which Hannity responded, "And by the way, I get your e-mails." [Accessed from the Nexis database]
Cross-promotion: Morris uses Fox platform to stoke fear of hyperinflation, skyrocketing interest rates
In promoting Newsmax's financial-services products, Morris has warned that Obama's policies will prolong the recession and eventually lead to massive inflation and skyrocketing interest rates -- likely followed by another recession. But the Newsmax promotions aren't the only place Morris has made those claims -- he has repeatedly offered a similar analysis in his role as a Fox News analyst.
Morris: "Right now we are in the same position as a country as the subprime borrowers were." On the February 1 edition of Hannity, Morris stated: "Right now, we are in the same position as a country as the subprime borrowers were. We're getting a teaser rate of 3 percent because we're printing the money we're borrowing -- we're not really borrowing money, we're printing it -- giving it to banks and borrowing it back at 3 percent. The federal government has to stop doing that in the next few months. And then we're going to have to borrow real money at real interest rates. And this debt service that now is about $300 billion is going to explode to $700 billion." He later said of Obama:
MORRIS: What he doesn't understand or he doesn't want to understand is that when you spend money that you have to borrow, even if you spend it creating jobs, you're going to lose jobs. Because a private business can't borrow money to create jobs.
The federal government's elbowing them aside, and they're the loan window. Treasury debt has gone up 41 percent, commercial lending has gone down 25 percent. That tells you everything you need to know.
Morris warns of "second dip" to recession, "humongous inflation." On the August 24, 2009, edition of Hannity, Morris stated that "in 2010 and '11, I think it is very, very likely that with this high deficit, you're going to recover a little bit, and then enter another depression." He added that "on the second dip that's going to -- that will happen maybe in '10, you may also have humongous inflation, which means that the Fed cannot stimulate the economy without risk of having the inflation go completely crazy. And you know how a patient dies when you have two things that are -- you're sick with and you can't treat them both? Something like being unable to be stimulative because of the inflation and have to stimulate because of the recession."
Morris predicts "runaway," "incredible" inflation. On the March 28, 2009, edition of On the Record with Greta van Susteren, Morris stated:
MORRIS: And the problem is that Obama, while the stimulus package is well intended, he then comes in with a tax-increase proposal that says, "Hey, I am going to take this away from you. Go ahead and spend, but in two years, I am going to be serving you for dinner."
And that causes people to be more and more afraid. And Obama says it is just the rich, but those are the people that are the employers, who sign paychecks and create jobs.
And I think what is going to happen, Greta, is that in two years or three years, when we begin to come out of this, all that money that is in the parking lot is going to come onto the freeway all at once to buy goods to expand plants and equipment.
And then I think we will have runaway inflation. And the only way to cure that is another recession. Sorry.
But the problem is that Obama is trying to force the pace with this massive spending, and the money is not being spent. It is being parked. And when it comes in, it will just come in all but once, and we will have incredible inflation. [accessed from Nexis]
Morris: "In '10, gradually the depression will end and then hyperinflation will take over." On the January 28, 2009, edition of The O'Reilly Factor [accessed from Nexis], Morris said that "[i]n '10, gradually the depression will end and then hyperinflation will take over. Hyperinflation. You're looking at 20 percent inflation a year in '11 and in '12." He later added that Obama was "passing a stimulus package to ease the pain" but that the "price of easing the pain is going to be hyperinflation."
Morris' Obama-bashing book also stokes hyperinflation fears
Morris warns of "depressflation," adds, "Obama's policies have seen to that!" In his book 2010 Take Back America: A Battle Plan, Morris promoted fears of what he called "depressflation":
Right now, the Fed is borrowing a lot of money to pay for the deficit. From whom? From those who got the free money in the first place by selling their bonds to the Treasury. This process of printing money and then borrowing it back can go on for only so long. At some point -- soon -- the Fed and the Treasury will have to stop playing the game. All indications are that it'll have to come to a stop in 2010. If it doesn't, the money supply may become so enlarged that we'll be risking the kind of wallpaper-your-apartment-with-money inflation that killed Weimar Germany and opened the door to Hitler.
And the larger the deficit is, the more we're risking a massive run of inflation, and the more interest lenders are going to demand in order to part with their money. After all, if they're stuck with bonds that pay only 3 or 4 percent -- and inflation is at 10 or 20 percent -- they'll soon lose all their money. To compensate for the loss, interest rates will have to go up. Very fast and very high.
If all of this happens -- interest rates rising and economic activity falling -- businesses will sell fewer products or services but they'll still have to pay for their interest costs (their fixed costs) out of the products or services they do manage to sell.
That will mean higher prices -- much higher prices.
And higher prices will mean higher interest rates, which will mean even higher prices in turn. That's how we get to depressflation.
With the federal government now having to borrow one-third of each dollar it spends, the need for more and more borrowing will drive interest rates ever higher. Obama's policies have seen to that!
Already, smart investors see the tsunami of inflation on the horizon. They're flocking to buy gold and copper as a hedge against rising prices. [pp. 50-51]
Morris: Obama "designed" U.S. economy to turn out like Weimar Germany. Morris wrote:
So if Washington can't afford to pay the interests on its debts, can't borrow from foreigners to pay for it, and doesn't want to edge out private borrowing in the capital markets, how do we pay back the huge debt Obama has foisted on us?
There's only one answer: huge, rampant, runaway inflation -- not inflation because of an artificial psychosis that grips the economy, but inflation that's deliberately caused by the government as an instrument of policy to get out of its debts.
That's precisely the kind of inflation that gripped Weimar Germany in the 1920s. Unable to pay the reparations for World War I imposed by the Allies, the government inflated its currency to pay the debt with valueless marks.
Welcome to the future Obama has designed for our economy! [p. 91]
Fox News has repeatedly promoted book. Morris has been introduced as the author of 2010: Take Back America during at least 11 Fox News appearances since March 10. For example, on the April 14 edition of The O'Reilly Factor, O'Reilly introduced Morris as "the author of the big bestseller 2010: Take Back America, very hot read."
Morris has repeatedly used Fox platform to shill for groups he is affiliated with
Morris repeatedly implored viewers to donate for ads. Morris frequently implored people to "donate for ads" against Democrats and health care reform. In doing so, Morris directed viewers to his website, which contains contribution links for the League of American Voters (LAV); While Morris stated on the September 28, 2009, edition of Hannity that he has no "financial stake in these ads," Morris is the chief strategist for the LAV and crafts the group's ad campaigns. In just February and March, Morris solicited donations for ads on Fox at least 10 times.
Morris asked Fox viewers to "give funds to GOPTrust.com" without noting his apparent financial ties to the organization. Between October 27, 2008, and November 17, 2008, Morris mentioned GOPTrust.com during at least 13 Fox News appearances and asked viewers to "give funds to GOPTrust.com," the website of the National Republican Trust PAC, without disclosing that the organization has paid $24,000 to a company apparently connected to Morris. Through publicly available records with the Federal Election Commission (FEC), Media Matters found that GOPTrust.com paid Triangulation Strategies at least $24,000 from the beginning of October 2008 to November 24, 2008, mostly for "Email Communication." The "Mailing Address" for Triangulation Strategies is listed in one of the National Republican Trust PAC's FEC filings as "dickmorris.com."