May 19, 2010

IF GOD DID NOT WANT THEM TO BE FLEECED...:

Glenn Beck's Golden Fleece: Rep. Anthony Weiner says Beck and Goldline are conspiring to "cheat consumers." A Mother Jones investigation into the right-wing's paranoid pitch for overpriced gold. (Stephanie Mencimer, May. 19, 2010, Mother Jones)

For more than a century, gold has held a special allure for the conservative fringe. Amid economic downswings and social upheaval, the precious metal has come to be seen as a moral and political statement as much as an investment. Ever since the late 19th century, when the gold standard became the center of a ferocious debate about the country's financial future, gold has been mythologized as bulwark against inflation, federal meddling, and the corrosive effects of progressivism. In the late 1970s, South African Krugerrands became a refuge from soaring interest rates and oil prices. In the '90s, militia groups fearful of big banks and the Federal Reserve hoarded gold.

And now, with the economy limping along and a black Democrat in the White House, gold mania has gone mainstream. Gold prices hit a recent high last December and remained strong as the European debt crisis unfolded this spring. John Paulson, the hedge-fund giant who made billions bundling and betting against Goldman Sachs subprime mortgage securities, has invested heavily in gold, even starting a new fund devoted solely to it. A recent New York Times poll [3] found that 1 in 20 self-identified Tea Party members had bought gold in the past year. Cashing in on all this is a raft of entrepreneurs who have tapped into financial insecurity and fever dreams of approaching tyranny. Nearly every major conservative radio host, including Rush Limbaugh, Sean Hannity, Michael Savage, and Dr. Laura Schlessinger, has advertised gold. But none has done more to cheer on the new gold rush than Glenn Beck.
One Beck fan told the FTC that Goldline had charged $369 for coins that could be bought elsewhere for 40 percent less.

Beck, whose various media enterprises brought in $32 million last year, according to Forbes, has a particular interest in plugging gold. Since 2008, Goldline has been one of his most reliable sponsors, underwriting his comedy tours and investing heavily in his radio show. Last year, after Beck called President Obama a racist [4], and mainstream advertisers bailed on his cable show, Goldline stuck by him. And its loyalty appears to have paid off. In an email, Goldline's executive vice president Scott Carter says that while its Beck sponsorship doesn't bring in the majority of its customers, it "has improved sales," which exceed $500 million a year.

In turn, Beck, has stood by Goldline. Last year, he made a promo video for the company [5] in which he stated, "This is a top-notch organization"—a quote featured prominently in Goldline ads on its own website. Until last fall, Goldline's website identified Beck as a paid spokesman. After the liberal watchdog Media Matters complained of a potential conflict of interest, Goldline modified its ad copy to indicate that it sponsors Beck's radio show, not Beck himself. Beck posted a video on his website [6] in which he unapologetically noted that he'd started buying from Goldline long before it was his sponsor, back when gold was $300 an ounce.

But there's still a powerful feedback loop between Beck and Goldline. The more worked up Beck gets about the economy or encroaching socialism, the more Goldline can employ those fears in pitching their products to his audience. But in putting his seal of approval on Goldline, "the people I've trusted for years and years," Beck has gone beyond simply endorsing an advertiser. A Mother Jones investigation shows that Beck is recommending a company that promotes financial security but operates in a largely unregulated no-man's land, generating a pile of consumer complaints about misleading advertising, aggressive telemarketing, and overpriced products. Just Tuesday, Rep. Anthony Weiner asked the Federal Trade Commission and the Securities and Exchange Commission to investigate Goldline for its "predatory policies." In an accompanying report, Weiner said that the company and conservative pundits had been working "hand in hand to cheat consumers": "Commentators like Glenn Beck who are shilling for Goldline are either the worst financial advisors around or knowingly lying to their loyal viewers."

Posted by Orrin Judd at May 19, 2010 6:00 AM
blog comments powered by Disqus
« WEAKER SEX?: | Main | WONDERBLOKE: »