This Wednesday afternoon, Ron Paul joined Peter Schiff, Andrew Schiff, Sheriff Richard Mack, Tom Mullen, Walter Block to discuss the proposed audit of the Federal Reserve, as well as other political and economic developments.
Download the show as an MP3 file here (58:06 min).
Channel: Fox News Strategy Room
Show: Freedom Watch
Host: Judge Andrew Napolitano
Transcript of Ron Paul’s appearance
Judge Andrew Napolitano: Now, to our continuing series in examining the Federal Reserve. Last week, Federal Reserve Chairman Ben Bernanke, in an effort to head off Congressman Ron Paul’s bill to audit the Fed, a bill that now has 277 co-sponsors in the House of Representatives alone, and in an effort to make himself appear human and understanding, actually held a 75-minute town hall meeting. This was produced and broadcast by PBS, thus paid for by your tax dollars, and was taped at the Fed’s branch bank in Kansas City. We did not learn anything new, except that Chairman Bernanke is not the expert on the Great Depression that he claims to be.
Now I know that he taught at Princeton. Most of you know that I’m a graduate of Princeton. I’m awfully also deeply grateful to my guardian angel that his failure to understand the lessons of history did not rub off on you or on me. Listen to this, he told his public TV listeners that the one thing he most wants is not to preside over a second Great Depression.
Ben Bernanke: I was not going to be the Federal Reserve chairman who presided over the second Great Depression. For that reason, I had to hold my nose and stop those firms from failing. I am as disgusted about this as you.
Judge Andrew Napolitano: One would think he does not know what he’s talking about. The Great Depression was great, not because of the depth of the unemployment or the magnitude of shareholder or investor loss, it was great because of the duration of the depression. The Fed at the time, the Congress, FDR and a cowed Supreme Court set the country on a course to centralized control of the economy, which brought rationing of goods, artificial interest rates, minimum wages that shut business down, and the confiscation of gold. When they saw how bad they made the bubble burst from the twenties, they manuevered us into a war and that brought on more rationing and the draft. It was not until the guys returned home from the war that a free market was unleashed and the depression ended 16 years after it started. Some people never learn.
Today, as you’ll hear soon, the Fed lends money to foreign central banks and doesn’t know or even care what they do with it. Today the Fed wants to regulate every mom-and-pop shop in the land as well as all the banks and any businesses that it thinks might adversely affect liquidity. It wants higher minimum wages, artificial interest rates and no transparency. It wants to end the problem caused by too much borrowing and spending by employing more borrowing and spending.
Einstein once said, “Don’t expect the people who caused a problem to solve it.” But that’s what the Fed and its wistful, historically illiterate chairman wants us to do.
It’s always my pleasure to introduce one of America’s great defenders of freedom and liberty in Congress and anywhere today, Congressman Ron Paul joins us from our nation’s capital. Congressman Paul, as always, welcome back to Freedom Watch.
Ron Paul: Thank you very much, Judge. Good to be here.
Judge Andrew Napolitano: Thank you. I guess Chairman Bernanke is feeling the heat. I guess he’s really concerned that HR 1207, which will require a public audit of the Fed might actually become law and in an effort to put on a human face and in an effort to show an understanding of our situation, went on public television for 75 minutes to tell us something we already knew. What do you think?
Ron Paul: Well, there are more firsts. First, they hired a lobbyist and I guess she didn’t do too well, so he’s going to be the chief lobbyist and go on PBS and talk about HR 1207. But he may be right, he might not be the one that ushers in another Great Depression, but it will turn out to be the greatest depression ever because I think it’s going to be worldwide. I think it’s going to be a lot worse and I think we’re going to blame him for perpetuating it. We can’t blame him for the crisis that developed last year because that was the previous inflation that Greenspan ushered in.
But the perpetuation of this depression-recession that’s going on now and the deepening of it, we can lay at the doorstep of the Federal Reserve and that will be Bernanke.
Judge Andrew Napolitano: It will be Bernanke. There may be a new chairman, but if there’s a new chairman, the policies will undoubtedly be the same. You wrote a letter this week, Congressman Paul, which was signed by some of your colleagues from across the ideological and political spectrum in the House of Representatives with your concerns about Goldman Sachs and your concerns about its use of federal dollars to enrich itself free from certain regulation and again, below the radar screen. Could you tell us what’s that’s all about?
Ron Paul: Well, we are not to the bottom of things because the Federal Reserve acts independently, which is in secret. They don’t want to reveal and that’s why the auditing bill is so important. But there’s pretty good evidence that he did. I mean, we do know that he did exempt Goldman Sachs from regulations that gave them greater leeway in using government funds and lo and behold, Goldman Sachs is now very profitable again. They survived. Lehman Brothers didn’t. A lot of little people didn’t; a lot of people are losing their houses, so it’s just who gets protection and who gets the pain and the suffering, and it looks like Goldman Sachs and the Fed have been working in collusion and this is targeting one particular incident that is now public knowledge and we’re trying to get him to respond to it. I don’t expect to get a whole lot of response, but I think this is why he’s become tenacious in trying to get the people to come out against it. You know, one thing that they used is they don’t want transparency of what the monetary policy is all about because they have to protect the public’s interest.
Well, you know, the public’s interest, are they not represented by these millions of people who have gotten to their congressman and we have these 277 co-sponsors? Aren’t they part of the public interest? Or is it Goldman Sachs and the big banks that represents the public’s interest. These are all code words that people are supposed to roll over and play dead and say, “Well, we don’t really care. They’re caring about the public’s interest. I guess it’s okay. They’ll take care of us.” But hopefully, we’re changing that attitude.
Judge Andrew Napolitano: Now, the Goldman Sachs issue that you pointed out is particularly troublesome, Congressman Paul, for a number of reasons. One, the treasury secretary at the time that AIG was bailed out was Hank Paulson, a former Goldman Sachs chair. Two, he did this in consultation with Lloyd Blankfein then and still the chair of Goldman Sachs. Three, when the Fed bailed out AIG, actually after the Fed bailed out AIG, we found out that AIG… excuse me, the biggest client of AIG was Goldman Sachs and four, when Lehman Brothers was teetering on the brink and the government decided not to bail them out, lo and behold, Lehman Brothers was Goldman Sachs’ biggest competitor.
Question, don’t we have something in the Constitution called the Equal Protection Clause and isn’t that supposed to require that the government treats similarly situated people and entities in a similar way and not pick and choose who it’s going to save and who it’s going to let die on the vine?
Ron Paul: Well, remember Animal Farm: Everybody is equal, but remember some people are more equal than others. Now, Goldman Sachs happens to be more equal than anybody else. But the big thing is that the American people are catching on. This is not being missed by the American people, so I’m feeling encouraged that it’s getting some attention, but we still have a long way because they are tenacious and the fact that they’re putting Bernanke out on the stump means that they are very concerned.
But ultimately, their system fails because it’s based on fraud. It’s based on a monetary system that won’t work. It’s just a matter of, can we put it together enough to get enough people to understand what we have to do to put this back together? We do have the founders’ advice in our Constitution; I tell people that we’ve gotten into this trouble because we didn’t follow Article 1 Section 8, and if we did follow the precise limitations of government power, even now we could use that as the guide to get back […] and so I’m encouraged that more people are thinking that way, but not here in Washington because I still don’t have them reading the Constitution here yet.
Judge Andrew Napolitano: Well, you’re getting there. Two of your colleagues gave me a little bit of hope this week. Congressman Dennis Kucinich was on my radio show, Brian and the Judge, during the course of which he said absolutely wonderful things about you and your understanding of the Federal Reserve and the free market. It was nothing new to me and our listeners, but it was nice to hear it coming from the lips of a liberal Democrat, but he also said he’s convinced HR 1207 will pass the House and eventually pass the Senate. If he’s right, of course, that’s great news. The other interesting thing this week that I saw came from another Democrat, your Congressman Alan Grayson interrogating Chairman Bernanke and getting him to admit that they have loaned huge amounts of money to foreign central banks. He didn’t know how much. He wouldn’t say what banks and he had no idea what those foreign central banks did with the money to which the American Federal Reserve loaned them. Does any of that surprise you?
Ron Paul: No, it doesn’t surprise me, but I’m delighted with this shift in attitude because it’s good to have somebody like Dennis on our side. You know, I’ve worked hard with him on foreign policy and the wars that are going on and he is independent-minded and will stand up against his party and Alan Grayson is a freshman, he’s very determined and very bright and he does ask these very good questions.
But it used to be that I would ask these questions for a few years, you know, a dozen or two or a lot more and it would be totally ignored, but now, you know, even Bill Posey the other day followed up and had some good questions with Bernanke. So I’m not totally alone anymore and it’s bipartisan because this issue of transparency and honesty and openness is a bipartisan issue. We don’t have an entire agreement on exactly what we’ll do afterwards, but we are agreeing that the American people deserve to know what’s going on and if there are shenanigans and even in the Senate’s side, you know, Bernie Sanders who calls himself a Socialist, he’s with us on this issue because he sees that it subsidizes big corporations, and even a good socialist doesn’t like to see Goldman Sachs being bailed out. So when we can find allies like that, we should work with them and bring the truth to light.
Judge Andrew Napolitano: Before I let you go. Prediction, will HR 1207, your monumental bill, which started out with just you and now has 277 co-sponsors, pass the House and eventually make its way into the Senate floor?
Ron Paul: Not as an isolated bill. I don’t predict that because Pelosi, I don’t think would permit that to come up. Barney Frank is not in favor of that or they would have had it already up, but that doesn’t mean that the bill or the thrust of the bill might not be incorporated into something else and I think the biggest job I have is to make sure if they put it into something else because I think they’re feeling the political heat and they know they have to do something, but my job is to make sure that it doesn’t get watered down, so that in essence, 1207 does get passed, even though it won’t be passed as an isolated bill.
Judge Andrew Napolitano: Congressman Paul, it’s always a pleasure. Thank you very much. Until next week on Freedom Watch. Thanks for joining us.
Ron Paul: Thank you. All right. Thank you.