Show: American Morning
Host: Kiran Chetry
Kiran Chetry: Welcome back to the most news in the morning. It’s 20 minutes past the hour. There’s a lot more finger-pointing going on in Capitol Hill over the AIG bonuses. So who is ultimately responsible? Our Ali Velshi got reactions from Treasury Secretary, Timothy Geithner in an exclusive sit down. Here’s a little bit of it.
Ali Velshi: Senator Dodd said that he had a clause that was put in the stimulus bill that basically allowed these payments to be made to people at AIG in this particular unit. And he says that somebody at Treasury asked him to put it in. Have we figured out who told him to put in this clause?
Timothy Geithner: Is there a provision?
Ali Velshi: Yeah.
Timothy Geithner: We express concern about this specific provision, because we wanted to make sure it was strong enough to survive legal challenge.
Kiran Chetry: Alright, so why did no one else see this coming? Congressman Ron Paul says it’s because no one is reading these bills, and he joins us live with more on this right now. Thanks for being with us this morning.
Ron Paul: Thank you.
Kiran Chetry: So, this whole AIG debacle, Congressman, what do you think about why it happened?
Ron Paul: Well, it happened because we did something that was outrageous. These bonuses are outrageous. 165 million dollars is a lot of money, but so is 700 billion dollars of unconstitutional appropriation, that’s where the problem came from. So yes, people are concentrating on these bonuses right now, but they’re missing the point. The point is that we shouldn’t be in the business of bailing out all these companies, and we don’t even know where the rest of the money went. We just discovered, probably inadvertently, that there were some bonuses. Now everybody is outraged, which they should be. So what do they do? They pass 700 billion dollars’ worth of unconstitutional appropriations. Then they come in and they discover this. The public gets notice of it, so the Congress has to act and feel outraged, so they pass a bill which is an ex post facto bill, as well a bill of a tenor, which is unconstitutional. They’re using the tax code to punish people.
So they do one thing wrong, they create a problem with an unintended consequence, then they go back and solve the problem by more of the same. That’s essentially what we are doing with our economy.
Kiran Chetry: Right. Well, you voted no on this bonus tax legislation. You agree that the bonuses were outrageous, but you also called this bill that was quickly put together because of all the outrage, a disgrace. What were you saying to your fellow Congressmen and woman about what was going on?
Ron Paul: In Congress they panic. They react minute-to-minute. Whether it’s passing the PATRIOT Act or doing all these things… they react in emotional ways. So when the banking crisis hit, instead of dealing with it over the past decade – which I’ve been begging and pleading for them to do – they wait, – “Oh, there is a financial crisis”.
Oh, it came from too much spending, too much taxes and too much printing of money. So what do they do? They spend more, they blindly appropriate this money, and I just think the whole process is outrageous and we’re on the verge of a major crisis. We’re in the middle of it now and it’s going to get a lot worse.
You know, the day on which we did this, Thursday, was a day after the Federal Reserve announced, “Oh Okay. We’re going to buy another 1.25 trillion dollars worth of government debt and mortgage debt” and the dollar goes down 3% and the next morning it goes down 1.5%, and we’re talking about these bonuses by passing an unconstitutional law in a way to punish people. So they compound their mistakes and they avoid looking at the real problem.
And even in my statement on the floor I said, “What we ought to be talking about is why don’t we find out from the Fed what they are doing with these trillions of dollars?” But we’re not even allowed to ask them any questions. The Fed doesn’t have to answer any questions about where their […] money goes. So we’re missing the point. We’re missing the target. I’m glad we’re talking about the bonuses but it’s so distracting.
Kiran Chetry: No, you’re right. This is something that we have been talking about here on CNN this morning as well, that all of this penning and hauling back and forth over these bonuses, which is a lot of money. I mean, it is 165 million dollars. But then on the same day the Treasury just floods the market with a trillion.
This is what you said last time on the show, this was in January and you were really looking into your crystal ball here. Ok, let’s take a look at what you said…
Ron Paul: There are five copies available to the House and I think five to the Senate and that wasn’t available until the House opened at noon time. So, essentially it was not available to us. And who could stay up all night reading a thousand pages, so obviously it was done, you know, like business as usual. Things have been going on like this for a long time, but this one was a little bit worse and it was bigger than usual, so it was not a very good day for America.
Kiran Chetry: You actually said that on February 16th when you were talking about the stimulus bill. Is what we are experiencing right now with this AIG bonus fiasco just being a small microcosm of that, what happens when our elected officials aren’t able to read this legislation?
Ron Paul: Yes, it is. And that’s why we’re responsible, you know. There’s a lot of blame to go around, even the American people have some blame for allowing the members of Congress to do what they do. But Congress is supposed to be protecting the purse and the president did sign these bills. The last president and this current president are very much involved in what’s going on. But ultimately, Congress should assume responsibility.
What has happened over many, many decades is that we have transferred the responsibility of the Congress into the executive branch. The executive branch writes laws and the courts rule, and Congress has reneged so much on their responsibility. And now all we know what to do now is to spend money. We don’t say how it should be spent, and then we allow the Federal Reserve to print money. We can’t audit the Federal Reserve. So it’s the Congress’s fault. If Congress would wake up we could rein in a lot of this.
So, to me it was very annoying to concentrate on doing what we were doing on Thursday and pretending that we were going to improve things. This is just a gross distraction from the important issues that we should be dealing with.
Kiran Chetry: Congressman Ron Paul, always great to get your point of view. Thanks for being with us this morning.
Ron Paul: Thank you.