Channel: Fox Business
Liz Claman: What’s the reaction from Capitol Hill over these stress test results?
David Asman: We are very pleased to have with us Republican Congressman Ron Paul of Texas who among other things has been trying to get the Fed to open its books, which is what we’ve been trying to do here at Fox Business. We’ll talk about that in a second, Congressman, but what about these stress tests? Are they just for show or is there substance here?
Ron Paul: I think it’s just propaganda. You know, we’ve gone through quite a few programs in the last year and a half and this is just another one and it’s trying to pump up confidence but so far it doesn’t look like it’s working again. I mean, we’ve been doing this continuously, but this to me is nothing more than a pretense that they can have central economic planning by manipulating money and credit through the Federal Reserve system.
It has failed. It got us into this problem and hardly can just more of central economic planning by the Fed be the answer.
Liz Claman: Congressman, you co-authored a bill that pushed for auditing the Fed. You ought to be applauded for that because we here as well have, with the Freedom of Information Act, which was actually… we had a judge ruling in our favor and pushing to just find out what is happening with the TARP money, so we’re a mano-a-mano on that level, but when you say that it really has done nothing, I’m just wondering here, we’ve had some stabilization of the banks over the past couple of weeks and the market hasn’t exactly slid down the slippery slope. I’m just wondering you don’t see any value in at least having gone forth with looking at bank books on behalf of 150 inspectors?
Ron Paul: Well, looking at them is one thing, but endorsing a system that is deeply flawed is something else. Because we’re not slipping quite as quickly as we were before, it doesn’t reassure me because we’re still preventing the correction. A correction when you have malinvestment and a financial bubble is to allow the correction to occur, so the fact that there’s been a slowing down of the correction bothers me. It just prolongs the agony and this is exactly what we did in the 1930s. It was always a pretense that we were helping with another government program, but what you want to do is the liquidation of debt and get rid of the malinvestment, get people back to work and savings, but with just more regulations and bills giving more power, like Bernanke talked about, more regulatory power to the Federal Reserve, that’s hardly moving into the direction of the marketplace.
You know, he talked about at the end of his speech, he said, “What we need to do is work for a more sound and stable financial system.” Obviously, he’s confessing that the financial system we’ve had today is not very sound and very stable.
David Asman: Right.
Ron Paul: But all he’s asking for is more authority and more power to inflate the currency, which is absolutely the wrong [thing to do].