Ron Paul, Peter Schiff on Freedom Watch




This afternoon, Ron Paul joined Peter Schiff, Lew Rockwell, Tracy Byrnes, John Tate and John Stossel on Judge Andrew Napolitano’s online show “Freedom Watch” in a refreshing discussion about the latest economic and political developments.

Channel: Fox News Strategy Room (online only)
Show: Freedom Watch
Host: Judge Andrew Napolitano
Date: 3/11/2009

Transcript:

Judge Andrew Napolitano: Everyday in 100 different ways, some seen, some unseen, the government manages to take away your freedom and to take away your property. Welcome to Freedom Watch. It’s our job to tell you what the government has done, to invite you to participate via email and to listen to those of us who professionally and for a living are devoted to the constitution, to civil liberties and to the free market.

I’m Judge Andrew Napolitano, its 2 o’clock in New York City, its 11 in the morning on the west coast, its Wednesday. It’s time for Freedom Watch. Our Freedom Watch regulars are here. Lew Rockwell from the Von Mises Institute is with us on the telephone. Tracy Burns from the Fox business network is seated next to me. Next to Tracy is Peter Schiff from EuroPacific Capital. And, joining us from Capitol Hill itself, from the seat of the government is Congressman Ron Paul.

Congressman, welcome back. We appreciate so much your Wednesdays with us on Freedom Watch.

Ron Paul: Thank you. Good to be with you again.

Judge Andrew Napolitano: What did we do right or what did we do wrong that this 410 billion dollar piece of legislation made its way through. Mrs. Pelosi having said to your colleagues in the Senate, “Don’t change one centilla of it or it won’t make its way back here, or the House won’t consider those changes.” Is that any way to run the government?

Ron Paul: Well, it is a way to run the government, just not a very good way to run the government. But, you know, there was a lot of talk on the subject we talked about last week and you were wondering how long it will take to get it through, and you realized it was finally passed on voice vote. So all that talk and posture and all these things really wasn’t much. They couldn’t change it, they wouldn’t change it. The rules prevented it. It was 410, it’s stuff that should have been passed, or dealt with last year, it should never have been passed.

But no, it represents how much government is out of control and even with this 410 billion dollars, which is huge, I keep arguing that it still doesn’t address the subject of the trillions of dollars that the Congress has no right to investigate, and that is the trillions of dollars of credit that the Federal Reserve creates and passes off to their friends. They have no responsibility to tell us. So, this is horrible, the TARP funds was horrible, but the bigger problem is still the control of the monetary system through the Federal Reserve because they are a fourth branch of government. They are every bit as powerful as the Congress and I’m just baffled about why this system works as well as it does.

Judge Andrew Napolitano: I’m going to get to the Federal Reserve in a minute, but one additional question on the 410 billion dollars package first. Maybe this goes to the human heart, I don’t know. You’re an expert on the human heart as well the ways of Congress because you are a physician.

Is there no shame among members of Congress who vote on legislation as to which there have been to committee hearings, no meaningful debate and which they’ve never read, but yet which commits the American taxpayer to expenditures of money for the borrowing for which they will be paying back for the next 30 years. Is there no shame amongst those who have taken an oath to uphold the constitution, and yet they write laws in this Soviet style of writing legislation?

Ron Paul: I would say no, there is no shame. Those who can’t do anything about it, an individual like myself, I can’t change anything. So I certainly don’t feel any shame. The others who participated and have the control, they say, “Well, this is business as usual”. We have to argue and explain that is has happened in the last 8 years as well, so it’s not just a Democratic thing. It’s a system thing, it’s ingrained in the way we have done business here.

But no, they don’t feel shame. And none of them ever feel like, “Oh, I didn’t uphold my oath of office today. Maybe I should apologize or ask for forgiveness.” Never. The way they interpret things, it is just fine. Some people have been taught that this is the way politics has to work otherwise we don’t get anything done. The bill wouldn’t have gotten passed if we would have allowed debate. So they rationalize it pretty well and they’ve been taught in school that the constitution is a living, breathing document and they have a right to do what they want under their interpretation. So there’s no guilt and there’s no shame.

Judge Andrew Napolitano: Is there resistance from other members of Congress? I know why there is resistance from the Fed; they don’t want anybody to know what they are doing. What is the resistance from your colleagues on the Hill to your proposed legislation to audit the Fed? I mean, in the Clinton years, a liberal Democrat… I can’t remember the person’s name, proposed comparable legislation and the White House said no. Who could possibly… unless you’re on the Fed and you want your nefarious ways hidden from the public… who in the Congress could possibly oppose auditing the Fed?

Ron Paul: Not too many. Just a few insiders who understand and defend the Fed and believe in that system. I think there’s a lot of support for at least auditing and opening up and making the Fed transparent, even without addressing the subject of what they should be doing and if they should even exists. There’s a strong sentiment here and I’m getting supporters for this 1207 which is just asking for transparency. And I think the time is right… before, when the Fed was doing these miraculous things and creating this great wonderful bubble and everybody was wealthy, nobody cared. But now they do care. This is one thing on which I think the sentiment has changed, and if we our job right, me in particular, and get other members, and get the public to ask their members of Congress to support this, I think we will continue to make inroads on this. And I think it’s bi-partisan too, so there’s a little bit of optimism there about pushing the issue of transparency for the Fed.

Tracy Burns: It is interesting to me that John McCain is back in the saddle again trying to be the maverick on this. Is he going to make any headway with this b10 million dollar bill?

Ron Paul: Oh no. I think that’s passed. And I don’t consider, and I don’t want to get into that fight but I think that was a bit of grandstanding that was going on. But no, he didn’t make any headway and there’s probably a lot of things in that bill that he was quite happy with. But he had his chance last week. He did make some political points, but no real changes. Of course, he doesn’t have the votes either. I mean, the Democrats have the votes. They are really now, with a couple of Republicans, able to cut of the filibuster, so even if the Republicans are acting better, and they are, they don’t have the votes either in the House or right now in the Senate. It doesn’t look like a conservative, fiscal, responsible senator has much to say about this either.

Judge Andrew Napolitano: You told us last week that the Republicans in the House and almost all the Republicans in the Senate who voted against this did not suddenly read the constitution or did not suddenly find their love of the free market. They just wanted to stick their thumb in the eyes of their Democratic colleagues. And I think that some of the Republicans who voted against it are secretly happy that this passes, because from their point of view they get the best of both worlds. They get to make a free market stance which energizes and pleases their base, but they also get to spend money which almost everybody except you and the people that are close to you in the government likes to do, so they can boast about bringing home the bacon. Am I misreading this?

Ron Paul: No, I don’t think so. I think there’s a lot like that. I think there’s a handful of senators that wouldn’t fit into that category. I think most of them would sort it out and say, “Well, maybe I could cut 10% if I really had the opportunity”, but coming from my view point and a strict interpretation of the constitution, I’m not talking about 10%. I’m talking about like 70% or 80% is what we need if we really want to go back to a constitutional government. But for the most part there’s a lot of partisanship going on and pragmatism and they switch and now it’s great for conservatives to pander to their base and say, “Look, you know, its only the Democrats, it’s the Democrats’ fault, that’s why we are in all this mess.”

Peter Schiff: It’s Peter Schiff. Did you happen to see Bernanke’s speech the other day for the center of foreign relations?

Ron Paul: I saw a part of that.

Peter Schiff: You know, it was interesting that he started his speech by actually delivering a pretty good explanation of how this crisis came about. He talked about the roots of it being in the global economic imbalances and the fact that Americans don’t save enough and then we borrowed a lot money and we borrowed it from abroad and then we wasted the money. We didn’t invest it productively, we spent it. So he identified the key of the problem, and then he seemed to imply that we needed another government agency, or more government involvement to make sure that the booms don’t get too big, so that they can temper the boom and bust cycles and try to make sure that we don’t get this type of misuse of credit.

Well, the very irony of it is, is the only reason that happened was because of the monitory policy that he and his predecessors supplied us with, and he seems to think that we need another government agency to counteract the damage being done by the Fed.

Ron Paul: He wants it both ways. He wants to control the money supply and create a bubble and make everybody seem to be prosperous. But he knows that there’s imbalances that come from that policy. But instead of questioning his own policy he defends that because he lives with it. That’s what his whole life has been about. So then he says, “Only if we had a regulator”. Of course from our view point if we had sound money there is always a regulator, and it’s called the marketplace. You don’t have all the banks going broke, you know, at one time. You might have some bank failures and that would get rid of the banks that over extended and made the mistakes. But no, he thinks it’s a super-regulator. But the big problem with this right now is they’re behind the scenes. I’m convinced they’re looking towards a worldwide regulator. They want to internationalize all the regulations of banks and all commerce. And if you think the Fed messed up, wait until we have this internationalized. It’s going to get a lot worse.

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7 Comments:

  1. Tracy Barnes adds nothing. She is a Jersey mall rat yenta. She actually shoos Peter and one point and says "Peter has been on this gold schtick for a while."

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  2. If you look at the website their balance sheets are already public. In fact, if you check out their website they provide far more information than any public company provides.

    What, specifically, would you like to know that is not on the federal reserve website? Have you ever looked at their website? Have you ever attempted to educate yourself or do you just send emails at someone else's behest?

    Seriously, it is not secrecy at times that is important, but the perception of knowledge coupled with the laziness to corroborate.

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  3. Forest,no one is talking about making balance sheets public.Congress just wants access to information about an organisation that the tax payer is funding.If you are a share holder in a company,surely transparency is paramount? The Fed is no different.

    Don't try to defend the indefencible,since the day if reckoning is nigh!

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  4. This is the kind of show we need ON THE AIR. I'm glad they at least have an outlet for this information through the web.

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  5. Since Mr. Schiff has been totally wrong thus far regarding decoupling, commodities, and inflation (i know i know, he will totally be right 'one day'). See his Zimbabwe rant on youtube last year...

    So, that being said, in a inflationary vein, China has a pegged currency that we have been 'shipping money to'.

    If China has substantial holdings of treasuries, wouldn't that make them dummies if inflation were to now occur? Do you want to be a huge holder of treasuries, be the catalyst for inflation, and then try to sell those into the teeth of an inflationary enviornment?

    And thus, if we did take the loan, at the cost of social strife on their part, wasn't that a good idea to finance the ideal of capitalism?

    Remember, as a country we have defaulted on sovereign debt before. And we have done it while the stronger world was on the gold standard.

    I welcome the discussion.

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    • We will not see the effects of this enourmous increase in the fiat money supply until the economy picks up and the banks start loaning and people start investing and spending. Inflation is created by alot of people having alot of money and bidding for the same items. Prices will rise when this new money makes its way into the system. So dont get to excited when the market rebounds its going to be a double edged sword.

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    • If we are to discuss inflation, we have to use the proper definition. Inflation is an expansion in the supply of money/credit. A general rise in prices is a consequence of inflation, not inflation itself. Unless we can agree to use the same terms, there's no point in having a discussion. Are you willing to use the correct definition?

      Granted, you don't explicitly say that inflation is a general rise in prices. However, since you say that Schiff has been wrong about inflation, it certainly implies you think that is what inflation is.

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