News & Current Affairs

July 12, 2009

US president sets Afghan target

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US president sets Afghan target

A US Marine helicopter delivers supplies in Helmand province, 11 July

Thousands of new US troops are boosting the effort in Afghanistan

The increasingly deadly conflict in Afghanistan is a “serious fight” but one essential for the future stability of the country, the US president says.

Insisting that US and allied troops have pushed back the Taliban, Barack Obama said the immediate target was to steer Afghanistan through elections.

The country is due to hold a presidential vote in August.

Mr Obama spoke to Sky News as concern grew in the UK at the rising British death toll in Afghanistan.

UK Prime Minister Gordon Brown was also forced on Saturday to justify British involvement in Afghanistan.

Mr Brown said the UK’s military deployment there was aimed at preventing terrorism in the UK.

Fifteen British troops have died in the past 10 days, pushing the country’s number of deaths in Afghanistan past the number killed in action in Iraq.

‘Extraordinary role’

Speaking during a day-long visit to Africa, Mr Obama also told Sky News that the battle in Afghanistan was a vital element in the battle against terrorism.

He said the continued involvement of British troops in the conflict was necessary, right and was a vital contribution to UK national security.

US President Barack Obama in Ghana, 11 July

Barack Obama has boosted troop levels and is hoping for tangible results

“This is not an American mission,” Mr Obama said.

“The mission in Afghanistan is one that the Europeans have as much if not more of a stake in than we do.

“The likelihood of a terrorist attack in London is at least as high, if not higher, than it is in the United States.”

He praised the efforts of all troops currently fighting the Taleban in gruelling summer heat, singling out British forces for praise when asked if their role was still important.

“Great Britain has played an extraordinary role in this coalition, understanding that we can not allow either Afghanistan or Pakistan to be a safe haven for al-Qaeda, those who with impunity blow up train stations in London or buildings in New York.

“We knew that this summer was going to be tough fighting. They [the Taliban] have, I think, been pushed back but we still have a long way to go. We’ve got to get through elections.”

‘Core mission’

Since taking office in Washington in January of this year, Mr Obama has announced a troop “surge” in Afghanistan.

British soldiers carry the coffin of a comrade, 10 July

British troops have endured a deadly week in Afghanistan

The US has said it is sending up to 30,000 new troops to Afghanistan this year to take on a resurgent Taleban. They will join 33,000 US and 32,000 other Nato troops already in the country.

He also replaced the incumbent US commander in the country, ousting Gen David McKiernan less than a year into his command.

The new US chief in Afghanistan, Gen Stanley McChrystal, has a stellar reputation from his days commanding special forces operations in Iraq.

He has been tasked with the mission of outsmarting the Taliban, who continue to win support among ordinary Afghans often caught in the crossfire of the bitter fighting.

High numbers of Afghan civilian casualties have become an issue of major concern to the US. Afghan President Hamid Karzai has regularly called on the international forces to reduce the numbers of Afghans killed in its operations.

Speaking to Sky News, Mr Obama said although forces were currently engaged in heavy fighting, new strategies for building bridges with Afghan society would be considered once the country had held its presidential election.

A young girl in Afghanistan, 10 July

Afghan civilians often bear the brunt of the conflict with the Taliban

Afghanistan needed its own army, its own police and the ability to control its own security, Mr Obama said – a strategy currently being implemented in Iraq, where security is being handed over to Iraqi forces.

“All of us are going to have to do an evaluation after the Afghan election to see what more we can do,” the president said.

“It may not be on the military side, it might be on the development side providing Afghan farmers alternatives to poppy crops, making sure that we are effectively training a judiciary system and a rule of law in Afghanistan that people trust.”

“We’ve got a core mission that we have to accomplish.”

June 20, 2009

Iran protests ‘to go ahead’

Iran protests ‘to go ahead’

An Iranian man holds a poster of the supreme leader Ayatollah Ali Khamenei at the conclusion of the Friday prayers, in Tehran, Iran on Friday

Many thousands of Iranians attended the Supreme Leader’s Friday address

A key rally against Iran’s presidential elections will go ahead on Saturday – in defiance of Supreme Leader Ayatollah Khamenei – opposition sources say.

The wife of defeated candidate Mir Hossein Mousavi, and an aide to another rival candidate, Mehdi Karroubi, said the rally would go ahead.

Mr Mousavi later announced he would be giving a statement imminently.

Police warned they will arrest the leaders of any protest rallies, which they said would be illegal.

The warning follows an order from Ayatollah Khamenei on Friday that street protests should cease.

LATEST FROM TEHRAN
Jon Leyne
Jon Leyne

The opposition leader Mir Hussein Musavi has not made the direct statement himself but his wife, Zahra Rahnavard, who has played a key role in his campaign, has said on her facebook site that the rally is going ahead.

If so, this will be the most direct challenge to the authority of the Supreme Leader Ayatollah Ali Khamenei.

A huge turnout is expected. Iran and the world will be watching to see how the Iranian security forces respond.

On her page of the social networking website Facebook, Mr Mousavi’s wife Zahra Rahnavard said the rally would go ahead.

An aide to Mr Karroubi also told the news that a rally would take place and that it would be attended by Mr Mousavi and Mohammad Khatami – the former president, key reformist and ally of Mr Mousavi.

But the BBC’s Jon Leyne in Tehran says events are moving quickly, with the website of Mr Mousavi’s Kalameh newspaper saying he was due to make an imminent announcement.

Mr Mousavi had been expected, along with fellow challengers Mr Karroubi and Mohsen Rezai, to discuss more than 600 objections they had filed complaining about the poll at a meeting of the Guardian Council on Saturday.

But Iranian media reports suggest that neither Mr Mousavi nor Mr Karroubi turned up for the meeting.

Our correspondent says that, if true, it might suggest they have abandoned their legal challenge to the election results.

The Council, which is the body which certifies the election, had only offered a partial recount of disputed ballots from the election.

Police warning

Iranian officials have warned protest leaders not to launch fresh demonstrations.

Abbas Mohtaj – head of Iran’s State Security Council and also deputy interior minister – issued a direct warning to Mr Mousavi.

Iranian pro-government supporters burn a US flag in Tehran

“Should you provoke and call for these illegal rallies you will be responsible for the consequences,” he said in a statement.

State TV also broadcast a warning by a senior police commander warning that police would not countenance any more street protests.

Official results of the 12 June presidential poll gave President Mahmoud Ahmadinejad a resounding 63% of votes, compared to 34% for his nearest rival, Mir Hossein Mousavi.

The result triggered almost daily street protests – a challenge to ruling authorities unprecedented since the Islamic revolution of 1979.

The human-rights group Amnesty International says it believed about 10 people had been killed.

On Friday, US President Barack Obama warned Iran that the “world is watching” events there. He expressed concern at “some of the tenor and tone of the statements that have been made”.

Ayatollah’s address

A new rally on Saturday would directly challenge an order from Ayatollah Khamenei, Iran’s spiritual leader and highest authority.

“Straight challenge is not acceptable after the election,” Ayatollah Khamenei told thousands of Iranians who massed to hear him on Friday.

“This is challenging democracy and election itself. I want every side to put an end to this method. If they don’t then the responsibility of its consequences, the riots should be shouldered by those who do not put an end to it.”

The ayatollah insisted the Islamic Republic would not “cheat voters” – and blamed foreign powers, in particular the UK, for fomenting the unrest.

He said “bloodshed” would result if the protests went ahead.

The rally was attended by President Ahmadinejad. But former President Ali Akbar Hashemi Rafsanjani – a close associate of Mr Mousavi, and open critic of President Ahmadinejad – did not attend.

Although the Supreme Leader controls many levers of power, Mr Rafsanjani heads the Assembly of Experts, which has the power to elect the leader, supervise him, and theoretically even to dismiss him, our correspondent says.

Behind the scenes, he says, there appears to be both a political battle between two veterans of the Islamic Revolution, but also a titanic dispute about the whole future of Iran, whose outcome no-one can predict.


Are you in Iran? What do you think of the current situation? What do you think of the ayatollah’s speech?

If you have any information you would like to share with us

September 19, 2008

Small-town girl v big-city boy

Small-town girl v big-city boy

Virginia-based author Joe Bageant claimed Republican VP candidate Sarah Palin as a fellow “redneck”, in a recent essay for BBC Radio 4’s Today programme.He meant it as a compliment. Here Jamie Stiehm, a city-dwelling political commentator, asks whether small-town values are all they are cracked up to be.

When an American refers to someone as “small-town”, it’s seldom clear whether it’s meant as praise or scorn.

Trump Tower in Chicago
Sarah Palin declared psychological war on Barack Obama by setting up a ‘small-town girl v big-city boy’ dichotomy

It all depends on the speaker, subject, listener and ZIP code where the conversation is taking place.

For some, small towns are where virtues live: near the diner, yarn shop and swimming hole. For others, “small-town” is a synonym for smug narrow-mindedness.

Governor Sarah Palin, the political hurricane that made landfall in early September as the surprise Republican vice-presidential nominee, hit upon the deepest contradiction in the American character. It’s as old as the fierce fight between two founding fathers – urbane Alexander Hamilton of New York and Thomas Jefferson, a Virginia slave-owning gentleman of the land.

We Americans still have a romantic notion about the simple small town, which goes hand in hand with Jefferson’s idealized “yeoman farmer”. But in real life, most of us live in the busy, peopled world Hamilton envisaged.

Ms Palin declared psychological war on Barack Obama, the Democratic presidential nominee, right away by setting up a “small-town girl versus big-city boy” dichotomy.

In her hello-to-the-country speech, Palin zeroed in on Obama’s work as a community organizer in Chicago before he went to Harvard Law School. That was in another metropolis known as Cambridge, a lively academic grove in Boston.

In a rare move for a political unknown, Palin made it personal between the man running for president, Obama, and herself. They are of the same generation: she is 44 to his 47, and represent bipolar extremes.

Jamie Stiehm
Jamie Stiehm is a political journalist based in Washington DC. Her essays on the 2008 presidential campaign have appeared in the liberal, pro-Obama Huffington Post.

“I have the privilege of living most of my life in a small town,” Palin told roaring Republicans at their convention.

“I was mayor of my hometown. And since our opponents in this presidential election seem to look down on that experience, let me explain… I guess a small-town mayor is sort of like a community organiser, except you have actual responsibilities.”

Gopher Prairie

But, just a moment, what’s so great about being mayor of tiny Wasilla, Alaska? Whether Ms Palin ever made time to see the skylines and neighborhoods of Philadelphia, Boston or Baltimore is arguably more to the purpose of governing the United States.

For like it or not, we are a nation composed of mostly city dwellers.

Sarah Palin
We grow good people in our small towns, with honesty and sincerity and dignity
Sarah Palin quotes the late Hearst journalist, Westbrook Pegler

The 1920 census was the point in our social history when the population changed from living in rural and small communities to living in cities.

That shift is mirrored beautifully in the literature of the period, known as “The Revolt from the Village,” as critic Carl van Doren put it in The Nation in 1921. This revolt was accompanied by a rush to breathe in the exhilarating big city by young men and women, as told in the autobiographical novel, You Can’t Go Home Again, by Thomas Wolfe.

The most famous work in the anti-small town movement was the 1920 novel Main Street, by Sinclair Lewis, who based fictional Gopher Prairie on his own Minnesota hometown.

The Nobel laureate author opened with a world-weary, ironical note: “This story would be the same in Ohio or Montana, in Kansas or Kentucky‚Ķ Main Street is the climax of civilization.”

Biographer Richard Lingeman, also the author of Small Town America, said Lewis’ masterpiece launched “a conscious, definitive attack on the stuffiness, provincialism, smugness, conformity and cruel gossip of small town life, intended to puncture the myth once and for all.”

World citizen

Yet here the heartland myth persists, in popular culture as well as partisan politics. Rock singer John Mellencamp’s song, Small Town, tells the other side of the story told by Lewis: “No, I cannot forget where it is that I come from/I cannot forget the people who love me/Yeah, I can be myself here in this small town/And people let me be just what I want to be.”

The lyrics are in an ode to his Indiana hometown.

Barack Obama

Barack Obama would have a hard time laying claim to small-town credentials

Mellencamp is a big Obama supporter, as it happens. Maybe the Democratic nominee would be well advised to take the singer on the road to help shore up his support in small towns in battleground states like Ohio and Pennsylvania?

One of the strengths of Obama’s curriculum vitae, for some of his supporters, is its variety. Growing up, he lived in Hawaii and Indonesia. He studied in LA, New York and Boston and knows his way around Washington.

He’s a world citizen.

He’d have a hard time claiming small-town status, though Springfield, Illinois, where he served as a state legislator, is a fairly small town where another lanky lawyer who ran for President once lived. (That would be, of course, Abraham Lincoln.)

No doubt certain strengths come from living in a small town, especially for politicians.

Bill Clinton, who hails from Hope, Arkansas, embodies the easy social connectedness which a small town upbringing can produce.

Everyone tends to relate to everyone else, up and down the social scale. People know the person you were in high school.

You might even be married to someone you knew in high school, as Palin told the world she was. “My guy,” was how she introduced her husband, Todd Palin, to the cheering crowd that night.

You might even be pregnant in high school, as her daughter Bristol is – but somehow the redoubtable Palin has turned that into a small-town virtue, too.

Urban sophisticates

In her convention speech, she quoted anonymously Westbrook Pegler, the long-gone Hearst newspaper columnist and scourge of Eleanor and Franklin Roosevelt: “We grow good people in our small towns, with honesty and sincerity and dignity.”

Was the subtext that urban sophisticates like Obama are somehow suspect?

Just what we need, a new culture war at home.

As if we Americans weren’t demoralized enough already by the economy and the war in Iraq.

But there is no obvious reason why the big city guy has to lose this ideological battle.

Maybe he should engage and ask Americans: hey, whose world would you rather live in? Jefferson’s or Hamilton’s? Mine or Palin’s? Wasilla or Chicago?

He’ll have to watch out though, or the small-town girl will have him for lunch at the diner.

Top Republican says Palin unready

Top Republican says Palin unready

Chuck Hagel

Senator Chuck Hagel could be influential with independent voters

Senior Republican Senator Chuck Hagel has voiced doubts about Sarah Palin’s qualifications for the vice-presidency.

John McCain’s running mate “doesn’t have any foreign policy credentials”, Mr Hagel told the Omaha World-Herald.

Mr Hagel was a prominent supporter of Mr McCain during his 2000 bid for the US presidency, but has declined to endorse either candidate this year.

He was opposed to the Iraq War, and recently joined Mr McCain’s rival Barack Obama on a Middle East trip.

‘Stop the nonsense’

“I think it’s a stretch to, in any way, to say that she’s got the experience to be president of the United States,” Mr Hagel told the Omaha World-Herald newspaper.

And he was dismissive of the fact that Mrs Palin, the governor of Alaska, has made few trips abroad.

“You get a passport for the first time in your life last year? I mean, I don’t know what you can say. You can’t say anything.”

This kind of thing will have an effect on independents

Mr Hagel also criticised the McCain campaign for its suggestion that the proximity of Alaska to Russia gave Mrs Palin foreign policy experience.

“I think they ought to be just honest about it and stop the nonsense about, ‘I look out my window and I see Russia and so therefore I know something about Russia’,” he said.

“That kind of thing is insulting to the American people.”

Justin Webb says Mr Hagel’s opinion of Mrs Palin will have an effect on independent voters.

A senior member of the Senate Foreign Relations Committee, Mr Hagel was a close ally of Mr McCain, but the two men parted company over the decision to go to war in Iraq.

Mr Hagel skipped this year’s Republican National Convention in favor of a visit to Latin America.

Mr Hagel’s decision to accompany Mr Obama this summer on a trip to Iraq and Israel, as part of a US Congressional delegation, led to speculation that he would throw his support behind the Democratic nominee.

However, a spokesman for the Nebraska senator insisted in August that “Senator Hagel has no intention of getting involved in any of the campaigns and is not planning to endorse either candidate”.

September 14, 2008

Record donations month for Obama

Record donations month for Obama

Barack Obama campaigning in Concord, New Hampshire, on 12 September

Barack Obama’s previous best monthly total was in February

US Democratic presidential candidate Barack Obama raised $66m (£37m) in August, making it his best month in terms of election fund raising.

The amount raised makes it likely Mr Obama will have more to spend than Republican rival John McCain in the final two months before the vote.

Donations were lifted by half a million new donors signing up, an aide said.

The record figure contradicts suggestions that Mr Obama’s fund raising appeal had been slipping.

His previous record, of $55m, was set in February.

The fund raising details are expected to be announced in the coming week when the rival campaigns file their monthly financial reports with the Federal Election Commission.

The public financing of presidential elections as it exists today is broken
Barack Obama
speaking in June

Mr Obama earlier decided not to accept public financing for the rest of his campaign and now has no spending limit.

He is the first candidate not to take public financing since the system was introduced in the mid-1970s.

Mr McCain did accept public financing, which limits his direct spending to about $84m after 1 September.

Recent opinion polls suggest Mr McCain has a lead of, on average, about 3% over Mr Obama, ahead of the 4 November vote.

Breaking the mould

Correspondents say Mr Obama raised more money than the Republican candidate partly because of the excitement generated by the Democratic nomination battle with Hillary Clinton, which ended on 7 June.

John McCain greets supporters at a campaign rally in Fairfax, Virginia, on 10 September

Mr McCain currently leads Mr Obama in opinion polls

Mr McCain, by contrast, wrapped up the Republican nomination back in March.

The only donations he is accepting are those to his compliance fund – money to pay for lawyers, accountants and other expenses involved in maintaining compliance with federal election laws.

The Republican National Committee, however, can still raise money to support the McCain campaign.

The Obama campaign has also broken the mould of US election finance by making big efforts to attract small donors.

Mr Obama explained his decision to shun public finance in June by saying the system was “broken”.

“It’s not an easy decision, and especially because I support a robust system of public financing of elections,” Mr Obama said then in a video message to supporters.

How to be a good president

How to be a good president

Barack Obama says the most important quality is vision for the future. No, says John McCain, the key requirement is experience – or at least that’s what he said until he picked Sarah Palin as his running mate.

Ronald Reagan

A former film star, Ronald Reagan was an excellent communicator

Both want the most powerful job in the world – but neither they, nor anyone else, can agree on what, precisely, are the qualities needed to serve as president of the United States.

Indeed, there is not even a job description – only an oath of office demanding the president defend the US constitution.

What’s more, the job keeps changing, evolving constantly in the 230 years since the founding of the republic.

Still, an understanding has gradually emerged of the key qualities required of a president.

The trouble is, they are so many and various, it’s almost impossible to imagine any normal human being matching up.

Preacher and protector

Ever since Theodore Roosevelt described the presidency as a “bully pulpit,” Americans have expected first-class rhetorical skills from their leaders.

Barack Obama and Bill Clinton

Mr Obama’s camp hopes to capitalise on Bill Clinton’s lasting popularity

A president must be able to inspire, to preach, to stir the American people to greater things.

In the modern era, Roosevelt, John F Kennedy and Ronald Reagan all had a great talent for communication; so too did Bill Clinton, though in a different style.

The presidents who have struggled – both George Bushes and Jimmy Carter come to mind – were those who lacked oratorical gifts.

But the job requires more than that. Americans look to their president as a protector, someone who will keep the country strong and ward off its enemies.

Roosevelt was a great war leader. As the former Allied commander during World War II, Dwight Eisenhower made Americans feel similarly secure.

Rightly or wrongly, Americans still revere Reagan for winning the Cold War.

Minimum mendacity

Foreign policy acumen is a related and essential element in the presidential kit of parts.

Richard Nixon meets John McCain in 1973

Nixon and John McCain could both claim foreign policy expertise

It’s why Mr McCain makes so much of his own experience in international affairs – and why the Obama camp equally emphasizes Sarah Palin’s lack of a foreign policy record.

The first George Bush’s reputation rests on his skillful handling of the post-Cold War world, while his son will have to persuade future historians that he did not make terrible blunders abroad.

Yet skill on the world stage is not enough to guarantee the respect of posterity.

Richard Nixon regarded himself as a geo-strategic sage, thanks to his opening to China, but he is still known by a single word: Watergate.

Domestic scandal trumps international accomplishments. Put that down as another lesson for those keen to learn how to be a good president: you need to be, if not saint-like in your honesty, at least not so mendacious that you get tangled up in your own deceptions.

It helps if you’re someone who can get things done. Lyndon Johnson will forever be saddled with the disaster of the Vietnam war, but he retains respect for passing a canon of social legislation – from civil rights to his war on poverty – that genuinely improved millions of lives.

Jimmy Carter

Jimmy Carter was seen as a decent but aloof president

That was largely down to his mastery of the often arcane ways of the senate, which he had once dominated as majority leader.

That hard-headed, practical ability to get results is often underestimated.

In the words of British journalist Yasmin Alibhai-Brown, Johnson “pushed through so much legislation which has changed the way we think about equality, equal rights and human dignity, and I think that is a huge accolade”.

Star quality

It’s good if you’re a palpably decent man, as Jimmy Carter was – but less good if that makes you seem lofty, prissy or aloof, as Carter often seemed.

It’s good if you can keep the country at peace and the economy in rosy health – as Bill Clinton did – but less good if you let that get overshadowed by personal indiscipline, as he did.

Finally, in the modern era, the president needs a compelling personal story, great charisma and as much screen presence as a movie star.

As I discovered making “President Hollywood”, the demands of Washington DC and Tinsel Town are remarkably similar.

Which man matches up to this impossible checklist, Barack Obama or John McCain? Well, the American people will decide that on 4 November.

But they had better get used to one thing right away: the president with every one of these essential qualities simply does not exist.

September 8, 2008

White House race enters high gear

White House race enters high gear

Barack Obama and John McCain, 5 September 2008

Candidates often see a surge in popularity after the party conventions

The US presidential rivals have begun campaigning in earnest, as a new opinion poll put Republican John McCain ahead of Democrat Barack Obama.

Fresh from being nominated at their party conventions, the two men are now gearing up for the 4 November poll.

A USA Today-Gallup poll put Mr McCain ahead for the first time in months.

Candidates often see a bounce in the polls after the conventions but Mr McCain’s choice of Sarah Palin as running mate is being seen as key.

Mr McCain has tried to strike a balance between distancing himself from an unpopular presidency and rallying the party’s conservative base.

Mrs Palin wowed the Republican convention crowd with her speech, helping to re-energize his campaign.

Major test

Mr McCain said that “the electricity has been incredible” at rallies ever since he invited the Alaskan governor to join his ticket.

“She has excited people all over the country. I would love to say it was all because of the charisma of John McCain, but it is not,” he told CBS on Sunday.

Sarah Palin and John McCain (6 September)

Mr McCain said that “the electricity has been incredible” at rallies

Mrs Palin will face a major test this week when she gives her first nationally televised interview, following intense media scrutiny over her personal life and credentials for the ticket.

The USA Today-Gallup poll, which was released on Sunday, showed Mr McCain leading Mr Obama by four percentage points, 50 to 46.

A USA Today poll taken before the Republican convention showed Mr McCain trailing Mr Obama by seven points.

The latest poll had a margin of error of plus or minus three percentage points.

The results of a Reuters/Zogby poll, also released over the weekend, gave Mr McCain the edge, with 50 percentage points to 46.

The Rasmussen Reports daily Presidential Tracking Poll showed John McCain with a one-point lead.

Mr McCain and Mrs Palin are scheduled to be in Missouri on Monday.

Mr Obama is campaigning in the crucial swing state of Michigan. His vice-president, Joe Biden, was appearing in Wisconsin and Iowa, while Hillary Clinton is on the campaign trail in Florida.

Despite the frenetic pace of the presidential race, the candidates will stop campaigning on Thursday to appear together in New York on the anniversary of the 11 September 2001 attacks.

They said they would put aside politics to honour the memory of the nearly 3,000 people who died.

September 7, 2008

US lenders ‘face state takeover’

US lenders ‘face state takeover’

Home repossessed in US

US mortgage giants Freddie Mac and Fannie Mae are set to be put under government control in an attempt to rescue the firms, media reports say.

Treasury Secretary Henry Paulson will outline government plans at a news conference at 1100 (1600 BST).

The move to shore up the shareholder-owned firms, which hold or guarantee half the US mortgage debt, would be the US’s largest ever financial bail-out.

In July, Congress approved a plan aimed

at offering them more liquidity.

This followed huge losses by the two firms as result of a big increase in defaults and repossessions in the US housing market.

‘Management told’

On Saturday, a senior politician, Barney Frank, chairman of the House Financial Services Committee, said US Treasury Secretary Henry Paulson had told him the government would use its powers to ensure the continued and stable functioning of the companies.

The Washington Post, quoting senior administration sources, said the firms would be put under a legal status known as “conservatorship” which would greatly reduce the value of the two companies’ common stock.

BBC Business Editor Robert Peston
This is an event of profound significance for the global economy
BBC Business Editor Robert Peston

Other securities – including company debt and preferred shares – would be guaranteed by the government, the paper added.

The New York Times reported that senior executives at Freddie Mac and Fannie Mae were informed about the plan on Friday.

The Wall Street Journal said it would include changes in the top management.

There would also be quarterly infusions of cash to keep both firms afloat, the papers say. The total cost to taxpayers is not known but could amount to billions of dollars, they add.

The government was being forced to step in because it was dangerous for the US economy for doubts to persist about the two firms’ viability.

Struggling homeowners

HAVE YOUR SAY

Government control over larger portions of the economy can only end badly

TB, US

The two contenders for the US presidency, Barack Obama and John McCain, have been briefed on the takeover by Mr Paulson.

“We’ve got to keep people in their homes,” said the Republican candidate, John McCain.

“There’s got to be restructuring, there’s got to be reorganisation, and there’s got to be some confidence that we’ve stopped this downward spiral,” he added, saying that the takeover of Fannie Mae and Freddie Mac must not benefit executives at the two companies.

The Democratic Party candidate, Barack Obama, said any action should be focused “on whether it will strengthen our economy and help struggling homeowners”.

“We must not allow government intervention to protect investors and speculators who relied on the government to reap massive profits,” he said, adding “we must protect taxpayers, not bail out the shareholders and management of Fannie Mae and Freddie Mac”.

Fragile

On Friday, America’s Mortgage Bankers Association reported that at the end of June, about four million homeowners with a mortgage – representing a record 9% – either were behind in their payments or faced repossession.

In the past year, the financial crisis has taken a heavy toll on both Fannie Mae and Freddie Mac.

The country’s two largest buyers and backers of mortgages lost a combined $3.1bn between April and June.

Both companies say they have the resources to weather the losses, but their shares have fallen sharply on fears that they could go bankrupt as borrowers default.

The rescue plan passed by Congress in July gave the US government the authority to buy shares and offer liquidity to companies to keep them afloat.

Many analysts believe their collapse would be a major shock to the already fragile global financial system.

Together, the two firms own or guarantee about $5.3 trillion worth of home loans – about half the outstanding mortgages in the US.

That is about 25 times as big as the obligations of Northern Rock – which was nationalised by the UK government earlier this year, and twice the size of the UK economy.

US rivals to make 9/11 appearance

US rivals to make 9/11 appearance

Barack Obama and John McCain, 5 September 2008

The candidates have entered the election campaign’s final phase

The US presidential rivals, Barack Obama and John McCain have said they will appear together on the anniversary of the 11 September 2001 attacks.

The senators said they would take part in the commemorations in New York – the site of two of the attacks.

The two candidates said they would put aside politics to honor the memory of the nearly 3,000 people who died.

Hijacked planes were crashed into New York’s Twin Towers, the Pentagon in Washington and a field in Pennsylvania.

“All of us came together on 9/11 – not as Democrats or Republicans – but as Americans,” the joint statement said.

“In smoke-filled corridors and on the steps of the Capitol; at blood banks and at vigils – we were united as one American family.

“On Thursday, we will put aside politics and come together to renew that unity, to honor the memory of each and every American who died, and to grieve with the families and friends who lost loved ones.”

The event at Ground Zero – site of the collapsed Twin Towers of the World Trade Center – will mark the first time Mr McCain and Mr Obama have been together since they were formally nominated as presidential candidates at their parties’ just-completed national conventions.

The two agreed not to run television ads critical of each other on Thursday and Mr McCain’s campaign team said they would not run any ads.

With the parties’ nominating conventions over, the candidates have been gearing up for the last weeks of campaigning up to the 4 November election.

September 6, 2008

US campaign reaches final phase

US campaign reaches final phase

Barack Obama at a factory in Duryea, Pennsylvania, on 5 September 2008.

Republicans can’t be trusted with the economy, Mr Obama says

US presidential rivals Barack Obama and John McCain have begun the final phase of their campaigns following their anointment by the party conventions.

Mr Obama, the Democratic candidate, seized on high unemployment figures to tell a rally that Republicans must be driven from the White House.

Republican John McCain promised to work to fix the economy.

Both candidates are focusing on key battleground states ahead of the presidential election in November.

Campaigning in the industrial north-east, Mr Obama criticized Mr McCain’s acceptance speech at the Republican convention on Thursday, citing the country’s economic woes.

“If you watched the Republican National Convention over the last three days, you wouldn’t know that we have the highest unemployment in five years,” Mr Obama told workers at a factory near Scranton, Pennsylvania, on Friday.

“They didn’t say a thing about what is going on with the middle class.”

John McCain (5 September 2008)
They’re tough times in Wisconsin, they’re tough times in Ohio, tough times all over America
John McCain

Government figures show that the jobless rate reached 6.1% in August.

Mr McCain told supporters in Wisconsin – another swing state – that the sagging economy had squeezed everyone in the country.

“These are tough times,” he said. “They’re tough times in Wisconsin, they’re tough times in Ohio, tough times all over America.”

But he promised that “change is coming”.

The candidates were gearing up for the last weeks of campaigning up to the 4 November election.

They used their respective party conventions to address vulnerabilities in their campaigns.

Mr McCain – who has a reputation as a maverick – tried to strike a balance between distancing himself from an unpopular presidency and rallying the party’s conservative base.

His selection of conservative Sarah Palin as a vice-presidential running mate helped rally supporters of President George W Bush.

A week earlier, Mr Obama – who needed to heal Democratic divisions after his primary election battle with Hillary Clinton – got a boost when her husband, former President Bill Clinton, gave him unqualified backing in his convention speech.

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