Ron Paul on the Jim Bohannon Show




Part 1:


http://www.youtube.com/watch?v=EQhsh3f3tkI

Part 2:


http://www.youtube.com/watch?v=dQzPItEbLcA

Show: Jim Bohannon Show
Host: Dimitri Vassilaros
Date: 3/24/2009

Transcript:

Dimitri Vassilaros: I’m Dimitri Vassilaros, guest host. I’m a talk host on News Radio 1020 KDKA here in Pittsburgh, Pennsylvania and an editorial page writer for The Pittsburgh Tribune Review.

While no one doubts that some major steps are needed to return the economy to stability, there are many who believe the Obama administration is going about it the wrong way. Now, in this portion of the program we will speak with a major libertarian voice in the Congress, Republican Representative Dr. Ron Paul of Texas. He’s a former presidential candidate and he is an outspoken critic of the Federal Reserve. He is currently a member of the Joint Economic Committee, and the House Financial Services Committee where he serves as the vice-chairman of the Oversight and Investigation Sub-Committee. Dr. Paul is a leading spokesman for limited constitution government, low taxes, free markets and a return to a sound monetary policy.

Dr. Paul, welcome to the Jim Bohannon Show, how are you sir?

Ron Paul: Good, thank you, nice to be with you.

Dimitri Vassilaros: It’s great to have you here and be talking with you again. I’ve talked to you a number of different times. You’re one of the few people inside the beltway who I respect and admire, because you have been telling it as it is for so long… long before it was ever popular.

So tell me, did you have a chance to see the news conference tonight, and if so, what did you think about it?

Ron Paul: I did not, I had other things in my schedule. I did not get to see it, but I don’t know how much I really missed. If there’s anything special you can ask me about it.

Dimitri Vassilaros: There didn’t seem to be anything terribly special. Tell me about the state of the economy as you see it, Dr. Paul.

Ron Paul: I think it is in bad shape and I think it is going to get worse mainly because we’re not doing the right things. Every so often the mistakes that the Federal Reserve makes have to be cleansed out of the system and we’re not allowing that to happen. When you create a lot of money, you create bubbles, you cause a lot of mal-investment, you cause over-investment and you cause too much debt, and finally it seizes up and the consumers have too much debt and businesses have too much debt and governments have too much debt, and the system fails to function. We’re at that point. The only response we’ve had so far is, “Well, let’s spend more money, let’s inflate more money, let’s borrow more money”. But that’s how we got in this trouble, and I’m afraid we’re doing very much like we did in the Depression, not allowing the correction to come and prolonging the agony. So, I don’t see an end to this very soon.

Dimitri Vassilaros: One of the latest proposals by Timothy Geithner is a plan to allow the government to purchase institutions that are not banks, such as insurance companies like AIG. They made that announcement today. What have you heard about that, and what are your thoughts about that?

Ron Paul: Well, I think that they are grasping at straws. Now their buying up of these companies is as close to socialism as it can get. The biggest problem I have with what’s going on is that the Fed has being doing a lot of this, they’ve guaranteed loans, and they have extended loans to the tune of trillions of dollars. Nobody knows the exact amount and they’re not required to reveal anything to us. So, this is just part of the process of patching up and keeping afloat all the mistakes that have been made. The mistakes should be removed, they should be liquidated, the debt should be taken off the books. But instead, they are requiring the taxpayer to buy out all the bad debt. They’re just looking around for victims today. I think when they talk about buying these companies it means they’re bailing out rich people at the expense of the average taxpayer.

Dimitri Vassilaros: In your Texas Straight Talk weekly column, the headline of one of your think-pieces is, “Bankruptcy is Economic Stimulus”. Help me understand what that means.

Ron Paul: What we want to do is stimulate the economy and get back to buying things again, and the best thing is to find out what the real values of things are. They claim that the real problem is… and you’ve heard this term so often… that the assets are illiquid. Many of those assets are illiquid. There’s a good reason for that: they don’t have any value to them. And if you can get those assets off the books, the good assets then become identified, and those people who have saved cash, and believe me there’s a lot of cash out there and a lot of individuals who have been frugal and paid their bills and didn’t run up these big debts, and when the prices get down, you can sort this out and the economy gets back again.

The market has a purpose of having a recession or depression and that is to get things back on the right footing, and we have just done everything conceivable to prevent that from happening.

Dimitri Vassilaros: How can they be called assets if they have no value? I don’t understand that thinking.

Ron Paul: Well, I think they do that on purpose. I think that they want the tax-payers to think they are buying something and feel, “Oh, there’s a chance we might make some profits”. But just think of how many different programs they have announced. I think there’s 10 different programs they have announced to solve these problems. A week ago it caused the market to go down, yesterday it caused the market to go up.

They keep thinking that finally they’re just going to get rid of these things, but it means that Wall Street gets the benefit and the little guy gets the punishment. So, how’s the little guy going to solve his problem and help himself get back on his feet again he is stuck with all these bills?

Sometimes it’s through direct taxation but other times it is indirect taxation… that is when the Fed creates all this money and buys up all these assets. It means they lose the value of every dollar the people have saved. So the very people who did their job right, who were frugal and saved their money and have their money in a CD, are being undermined because that money will lose its value. People aren’t concerned about that right now, but in a short period of time, about a year or two, you’re going to see all this monetary inflation being translated into higher prices, which means everybody is going to be a lot poorer.

Dimitri Vassilaros: So, am I going to need a wheel-barrel full of dollar bills in order to buy a loaf of bread?

Ron Paul: If we continue to do what we are doing then that might happen. But I think it will end. There will be a panic stage, and people will finally wake up and say, “We have to quit doing it”. But if you keep creating trillions and trillions of dollars then the dollar has to lose value. If not, then we have a pretty good deal. We’ve had a pretty good deal for a couple of decades because instead of using gold they used the dollar. People would take our dollars and give us goods and they would put it in the bank and use it as reserves to build up their currencies so we got to export our inflation. If they continue to do that, Americans won’t have to work anymore, and that would be a good deal for us. We would just have our government print money and send us checks and let somebody else provide services for us and send us food and we wouldn’t have to work.

Dimitri Vassilaros: Even the Chinese are catching on to that, it seems.

Ron Paul: Yes, they are expressing a little bit of concern about it, but they can’t really stop it all. If they do it ruins their trillion dollars. They own a trillion dollars. They’ve already made their mistakes by taking all that money from us and giving us all those goods. And now they have to worry about their investments. They’ve loaned that money back to us; that keeps things going for a while. But now the Chinese should have a lot to worry about.

Dimitri Vassilaros: My guest is Dr. Ron Paul, Congressman from Texas, and he’s been talking about the importance of a sound dollar for a very, very long while. If you like to talk with him, here is the phone number: 1-866-505-4626, that’s 1-866-50- JIMBO. Call right now. I’m Dimitri Vassilaros guest hosting tonight for the Jim Bohannon Program, and we’ll be back after this short break.

We’re back on the Jim Bohannon show, I’m guest host Dimitri Vassilaros. Our phone number is 1-866-50-JIMBO, that’s 1-866-505-4626. My very special guest, Dr. Ron Paul, Congressman from Texas, a man who truly does know the value of a dollar.

So Dr. Paul, help me understand something before we take calls from the listening audience here. Why are so many Americans so concerned about the 165 or so million dollars in bonuses to AIG, and yet not that concerned about the 170 or so – and counting – billion dollars in bailout money to AIG? Help me understand.

Ron Paul: Well, I think it’s the fact that they can visualize the bonuses, but they can’t quite visualize billions of dollars or trillions of dollars, and they can hone in on that and they see how corrupting this is and it’s easy to understand this. The 170 billion dollars, you know, the media didn’t talk a whole lot about it and they let it go by.

I think if a rational person understood it they would say, “Oh yeah, that’s much worse. And if we wouldn’t have appropriated 170 billion dollars” – actually it was more than that – “then none of this would have happened”. But I just think it is sort of easier to do it and they can scapegoat somebody and it is important. You can’t say, “Oh, it’s no big deal”. 165 billion dollars is a big deal. But compared to the hundreds of billion dollars… that whole TARP fund was, you know, 700 billion dollars… and here they’ve picked out these small amounts.

Of course, the thing that bothered me was that they wanted to fix the problem by just further undermining the constitution and targeting a tax deal on this, which is a bad precedent to establish. It would have been much better if we just never appropriated that money in the first place.

Dimitri Vassilaros: Let’s go to the callers. Let’s first start with Richard in Trumbull, Connecticut. You’re on the Jim Bohannon show. How are you, Richard?

Richard: I’m fine, Dimitri and Dr. Ron Paul. It’s good to hear you, tonight. You know, I have been in accounting and I can’t understand why the General Accounting Office doesn’t audit the books before they have a plan in action. And secondly, why the banks can’t write off these toxic assets as a bad debt, which companies do when something is not collectable?

Ron Paul: They could write them off, but then they say they would be under-capitalized and then they can’t make any loans, which is probably true. The system that we have is such that all banks are under-capitalized, you know, due to fractional reserve banking. If everybody wanted their money out of the banks at one time, it wouldn’t be there and nobody promises to loan their money. Well, some of it they do in a long term CD but most of the money just flows through and they’re loaning this out. So all the banks are insolvent and if they had to write it off, it is true, this makes the point that the whole system is fraudulent, and that’s why I always argue that we have to revise that system.

But, nevertheless, I would agree that they should be written off and get back and it means you get back to work just as an individual. You know, if they have no money in the bank and they have too many loans, then they have to either work it out in bankruptcy court, or they have to decide, “I’m going to pay so much out, but I’ll have to get two jobs and I’ll have to quit spending and I’ll have to start saving”.

But our country never does that, they just print more money and compound the problem.

Dimitri Vassilaros: Let’s go to Charlottesville, Virginia. Alan, you’re on the Jim Bohannon show.

Alan: Dr. Paul, hey thanks so much for standing up for Americans like you do. I have a question for you about how backing the dollar with gold, which is a commodity that obviously fluctuates with supply and demand, would strengthen the dollar? I would just like to hear you explain that in simple terms to me.

Ron Paul: Well, it would restrict the Federal Reserve from printing money out of thin air. The best thing to do is to look at some of the economic charts from 1971 onwards, although the Fed came into existence in 1913 and they systematically undermined the linkage to gold, the final link was removed in 1971 when the Bretton Woods down. And you see this massive explosion of the money supply and debt and the size of government and the CPI increases, so it’s very, very dramatic when it happened after when there were no restraints at all placed on the Federal Reserve on printing money. Because when they are given a license to print money, which is literally counterfeiting, they do it. And everybody is happy in the early stages because the politicians get the votes and they don’t have to be responsible. The people who like welfare, they love it, the people who like to fight wars oversees and have an empire, they love it.

But it all comes to an end. Gold restrains, and gold restrains government power. And the fact that gold does fluctuate, (you’re right, gold does fluctuate) in valued to the supply and demand, if all of a sudden there is a discovery of enough gold, which is essentially not possible, yes you could have a gold inflation.

But no, just as long as you have free market pricing, the prices of goods and services will adjust and the value of the gold will adjust. Then when you mix it in and say that there is no linkage to gold… I mean, if there is a little bit of fluctuation with gold just think of the tremendous fluctuation with the value of the dollar, and unfortunately, it’s usually downward.

Dimitri Vassilaros: And they can’t print more gold, right?

Ron Paul: That’s it. That’s the secret. Gold restrains and that’s why people who are in the banking system and the political system and the military-industrial complex, they don’t like it. The people who love power can’t stand the gold standard.

Dimitri Vassilaros: Congressman Ron Paul, do you think Timothy Geithner has become a toxic asset for the Obama administration?

Ron Paul: He doesn’t look too good. You know, I don’t have anything against him other than the fact that he has been in the Fed all this time and he’s never had a real job. But you know, I think anything that disrupts what they are doing is a benefit to the American people. So when people say, “Oh, he ought to be fired” and these sorts of things, that really doesn’t hurt us. I’m not the kind that goes out and says that because they’ll put somebody else in there that’s just as bad.

But he hasn’t done a great service. But it’s the system. This is not an easy problem for the money managers and the central economic planners to solve.

Dimitri Vassilaros: Why not just say, “Look, let the free market decide”, like it does with the local hot dog stand or any other business. It does seem to be a very simple solution. It will be painful, but aren’t we just delaying the inevitable anyway?

Ron Paul: Oh, yes, it is. But then the guys that run the show won’t be bailed out. I mean it’s not an accident that these 170 people ended up getting a million bucks. So, symbolically this is a big deal, because later when they check into it and find out, “Oh, it must be those rich Republicans that protected them”.

Now it turns out that Senator Dodd with the grants from the administration, took care of his friends and they think, “Oh, the Democrats are always the ones who are looking after the little guy”. Well, it turned out that at least wall-streeters gave more money to Obama, which proves to me that this party system of Republicans versus the Democrats… they really are not a whole lot different.

So now if you allow the correction and allow the market to return to have sound money it hurts the guys who have been in charge and who have benefitted for so long. And they’re going to get their bailout money, so the 170 million dollars we can seen, but these hundreds of billions of dollars or trillions… they’re bailing out a lot of people and are taking care of themselves. I’m sure there are a few people who will have a few Swiss accounts and have their gold coins as well.

Dimitri Vassilaros: Unbelievable. Pretty soon, we’ll be finding out their names.

Ron Paul: And that’s good.

Dimitri Vassilaros: I cannot wait to get that list, I tell you. Dr. Ron Paul, we’re almost out of time, it’s always a privilege to talk with you. In 30 seconds if you could tell the listeners of the Jim Bohannon show one good, sound piece of advice, what would it be?

Ron Paul: Fight for liberty, because we do not need to fear the future if we have our freedoms. There are a lot of problems financially, economically, monetarily, with the foreign policy and who knows what kind of problems we face. But if we live in a free country we can recover rather quickly, so I have much confidence in our freedom and where we will be.

Dimitri Vassilaros: Excellent. Dr. Ron Paul, thank you so much, sir. Keep up the great work, and we’ll talk with you again soon, alright?

Ron Paul: Thank you.

Dimitri Vassilaros: Alright. Maybe I’ll take a short break and then….



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