Event: John Birch Society Luncheon
Location: Houston, TX
Date: August 21, 2009
Ron Paul: Mr. Ron Paul: Thank you. Hi, I appreciate that very much. I’m delighted to be here. We were hectic in getting here. We were up in Dallas yesterday evening. There was a little fundraiser for our middle son and his name is Rand Paul and it looks like he has a crack at winning the Senate seat up in Kentucky.
I tried to explain to him that he was risking a very good medical practice and why would he want to get into politics and he told me I had no credibility in that part. I cautioned him, so there’s always a mixed blessing on what we do in life, and you give up something and you go on to do something else, but I actually feel very, very fortunate that I’ve been able to work both; be a medical doctor and deliver a lot of babies, at the same time participate in an active way in political change, so I feel fortunate that I can do that.
Now, Carol is sitting over here. She was with me yesterday and we came in this morning. […]
But I would like to sort of update you today on where, I think, the freedom movement is because that, of course, is what we all work in and been working for for a long time and most of the time it’s been rather quiescent. Especially in most of my lifetime, it’s been very difficult to even recognize in a public way what the freedom movement was all about, but I think things are definitely changing. I think we live in a different era right now.
But I got interested in the subject back in the 1950s and early 1960s actually as a medical student, as a medical resident when I started reading and studying Austrian economics. But it was very difficult to find the information back then and the group that provided most of the information for me was the group called the Foundation for Economic Education on Irvington on Hudson with Leonard Read.
No Internet and no professors in our colleges, nobody in the media talking about it, nobody in the government talking about it, but there was that remnant out there that did talk about it. Because no matter how bad things get, there’s always somebody available to try to hold things together and hold the true beliefs and our true values regardless of what the government is doing and this is historic. This is the way it’s always been and yet today I’ve come to the conclusion that that group of people was much, much larger than I ever dreamed because as I campaigned for the presidency the last couple of years, I discovered so many more people than I ever thought there would be.
So there were a lot of people like you. I know members and associates, people associated with the Birch Society are well informed and know about it and that wasn’t the great discovery because you’ve been working at this for a long time, but there were a lot more, a lot more people who had just been turned off with the system, had dropped out of the system. They weren’t voting, some never voted and they were just disgusted with it and they knew there was no difference between the Republican and the Democratic Party and that number was much, much larger.
But the other magnificent thing that I discovered in these past two years has been the reception of a new generation of young people who listen to this and are coming our way and accept this wholeheartedly and enthusiastically. So often now when young people come to my office in Washington, teenagers, maybe a 14-year old, 16-year old, college kids are coming in and I always ask them, you know, “How did you get interested? How long have you been interested? And what was it?”
Many, many times, almost inevitably, they will say, “Well, you talk about the Constitution and following the Constitution.” So they’re fascinated with that and young people tend to have an inclination toward principle more so than those individuals who are in the business community, who have lived with the system and they sort of figured, well, you have to go along to get along and they accept it.
But young people are more idealistic. They tell me that, but they also, very frequently, bring up the subject of the Federal Reserve, which is so fascinating today because, “Oh, I like what you talk about on money and the importance of this.” They’ve never heard of the Federal Reserve and they’re reading and studying now about the Federal Reserve System and how significant the monetary issue is.
As a matter of fact, it was the monetary issue that probably got me interested in politics early on because I was very much aware what was happening prior to August 15th, 1971. The Austrian economists, even as early as 1945, when the Bretton Woods system was set up, which was a pseudo-gold standard and Henry Hazlitt, who was a financial writer, a libertarian writer, he said it will fail and he was absolutely right and it failed in 1971.
When that happened, it just sort of hit me inside, they’re absolutely correct on their analysis of what’s wrong and what’s going to happen and predicting the future, even through Austrian economics, you cannot predict precisely. I can’t tell you tomorrow what the stock market is going to do, but I can tell you that in time the dollar is going to continue to weaken and eventually probably self-destruct, and that was predicted by Mises as early as 1912 and sure enough in 1913, we allowed our government to give us the Federal Reserve system.
Now, we have a 4-cent dollar compared to the dollar we had in 1913 and what are we doing now? That system of government, the system of government that runs the post office and they run Amtrak and they were in charge of $700 billion of TARP funds, all wasteful, corrupt spending. Now, the ones who believe that they represent the people who need help and the people who need taking care of and they grab the moral high ground and say, “That’s what we want to do: turn over the control of medical care to the people that have destroyed our country.”
Washington is still a mess. They haven’t gotten the message about this new generation has endorsed and what another group of people have been encouraged to get more engaged in, and yet we’re in the middle of big changes. All you have to do is watch the television and there’s a great deal of significance about the anger expressed at these townhall meetings.
Some of it might be orchestrated. The other day, last night, as a matter of fact, I was on Cooper, Anderson Cooper Show, and he asked me, “Oh, is this all a plan? Was the Republican Party able to set this up and conspire to do this?” I said, “You’re giving them too much credit. They’re probably not capable of doing that.”
But I think what’s happening is that the welfare state is alive and well. There is still a lot of people out there, but even those who are on the receiving end realize this is coming to an end. They know what we know, that it’s not a viable system, and they’re getting concerned. Who is going to get it? Will the big guys get all of it like they’ve been getting right now? People getting bailed out, the huge salaries, retirement benefits, banks being bailed out and Goldman Sachs being benefited by and they see that, so when they think about food stamps and housing programs and free education and free medical care, they get worried and concerned and yet the people who are still working for other things who understand it that this can’t continue. It has to end. Those two are in conflict and they’re fighting with each other and that is what’s going to change things because it is not sustainable.
This is not sustainable and that’s why the freedom movement is so important to explain this economically, morally, constitutionally in a practical sense. We have all those arguments on our side and yet we seem to continue to lose this fight. We’ve lost it for the last 70-80 years, especially since the Depression.
But the seeds were planted before that. 1913 was a horrible year. The income tax, the Federal Reserve and then also the change in the way they were electing senators and then at that period of time, significant change in our foreign policy where we became the policeman of the world, “make the world safe for democracy.” In here, what we were doing was nothing more than developing a foreign policy designed as a police force and a protectorate for some of the corporate interests around the world and then all those seeds were planted but the Depression really brought it on. There has been continued growth of that at the expense of liberty.
But now we’re at the crisis point because we are out of money and not only that, we’re out of wealth too. We’re not producing the wealth. The jobs have gone overseas and the debt is still with us.
We will this year raise the national debt at over $2 trillion. In the last 12 months, the national debt went up $2.2 trillion and that will probably expand because the one thing they can’t do is really project those numbers accurately because they don’t know how many people are going to be employed next year. I mean, unemployment might be 11 percent for all they know and therefore the revenues go down. So part of the reason that the deficit is exploding is that there are less revenues.
But the other part is the expenditures haven’t slowed up. You know, if you or I got into trouble, with too many credit cards and too much debt and we felt somewhat responsible to get our house in order, what we would do is stop spending and take a second job and start paying down the debt, which some people are capable of doing. That’s what needs to be done in the economy. We’re doing everything, at the Washington level, to do exactly the opposite. We’re not cutting any spending. We’re not paying down debt. What we are doing is transferring the debt from the people who made billions to the taxpayers.
You take the derivatives, those financial assets they call illiquid. Well, they are in the Federal Reserve now and even the treasury bills, which is a weak backing to a currency, they’ve been given to the banks, to Goldman Sachs, so they’re holding the treasury bills and we, the taxpayers, are holding mortgage securities and derivatives in order to prop the system up and so it’s a powder keg. In many ways, there has been no correction.
When an economy gets out of whack due to the inflationary conditions of what the Federal Reserve does and all the anticipation and the false information they have, it gets to the point where you need a correction. You can temporarily keep the correction from coming, but you can’t prevent it forever.
So since 1971, we’ve had six or eight significant recessions. That’s the market always saying, “You’re overdoing it. It’s out of kilter,” but we kept piling on the debt, consuming our wealth until finally, the big correction had to come and we’re in the midst of it. But we’re doing everything possible to prevent the correction and if you’re doing something to yourself harming yourself, the correction is to stop doing it. If you drink too much or smoke too much, the correction is stopping. But in our case, the correction means that we have to cut spending, cut taxes, cut regulations, cut the deficit, and cut printing money and we’re doing everything more so and it make things worse, so we do more and more and it will stop the economy, but the next sign will be the dollar.
The financial structure is done. I don’t think they can rebuild the international financial system on the dollar standard, the paper dollar standard and the opposition, those who are really in charge of our Federal Reserve and our Treasury and our government, they know that and they’re are already working in collusion with the central banks of the world to come up with the alternative.
And they want a worldwide paper currency run by the United Nations and the IMF and the SDRs and that is what they’re working on and I would say that it shouldn’t be difficult for us to say, “Absolutely not. We don’t need that.”
But they do not want to accept the restraints of honest money and the Constitution and morality and that’s where the problem comes with the Federal Reserve. It is immoral. It’s unconstitutional. It’s bad economic policy and it gives us the economic crisis and so it’s something that has to be addressed. The Federal Reserve is set up, so government can grow in a sinister way where they don’t have to be responsible and you can finance the welfare state if you monetize the debt and you can run this worldwide empire, which is so destructive, is so harmful to us and they can finance those debts the same way.
But not only that. The Federal Reserve is a government unto itself. They can literally create trillions of dollars, which they’ve had especially these last couple of years, put it into the hands of foreign governments, into the hands of foreign banks, into the hands of international financial organizations, into the hands of corporations and we’ve had no authority to go in and examine them. They don’t want to tell us what they’re doing. So they have the entire power of Congress.
Congress thinks they’re real important and they should be a lot more important and curtail this and have oversight and do all these things, but they don’t. They just continue to ignore the important issues until now.
Now, we’re getting their attention. The freedom movement is getting all their attention because I think we have proven a point, especially on this monetary issue. What happened was when the TARP funds were appropriated and authorized, the information got out that finally the Congress didn’t know where the money was going. It had no idea. The people sensed this. The economy were getting weaker and weaker and people wanting to know what was happening and so they put a lot of pressure on Congress and they’ve got a lot of attention.
But then it turns out that this is a small matter compared to the trillions of dollars involved in the Federal Reserve, so that is what opened up the opportunity for us to be able to move this bill and make the point, “Look, if you want to know where the TARP funds are, you’ve got to know what the Federal Reserve is doing.” And that is why the bill to audit the Fed, which the most I ever had before in that bill was 18 and today it’s 282 [co-sponsors].
Seventy five percent of the American people say it’s right to know what the Federal Reserve is doing. Now the one reason we got such a cross-section on this is because the American people want transparency and this is a bill of transparency. This is not a bill that has in it to design the replacement for the monetary system because that would have been a more giant leap. People wouldn’t have signed on to that, but they are willing to look into it.
But if we know more about what they’re doing, what kind of deals are being made and who has been benefiting, believe me, that will usher in the day when we can have true reform.
The odds of this bill being passed as a bill on itself (a stand-alone bill), quite frankly I think are very slim. It could happen if the American people put enough pressure on them and things come together, but the odds aren’t very good.
The odds of the bill being passed, with their strong effort to water it down a bit, are pretty good, I think they know that there is such strong public sentiment that they are going to permit something, and they’ll probably attach it to some horrible, horrible bill for reform on the regulatory system.
So, that’s a possibility of what will happen. But the question comes up; why, if you have a majority of the people who are for it, why don’t they just bring it to the floor. Don’t they have to? No, they don’t have to.
The 290 vote means that you have enough votes for it to pass under suspension. The super-majority support it, so just bring it to the floor. They could if they wanted to, plus they could bring it up on Monday. The first Monday we go back. It could be under suspension.
I imagine there wouldn’t be very many who would oppose it, but it’s not going to happen. The establishment does not want this, and I think if you get to be president or vice-president or speaker of the House, the establishment has a lot of influence on those individuals. So, they will be restrained in bringing this up, unless the momentum continues, and I think that is a possibility.
We don’t know exactly what will happen, but something is going to happen in the next several months. Let’s say they take that bill and they do nothing. Let’s say they refuse to, or pass something that is totally worthless. I think then, those individuals, the groups, the citizens who have been pushing this bill, as well as the 75% who think that transparency is a good idea, they are going to be outraged, because it will prove our point that they would defy this huge majority of people and common sense and the Constitution in order to protect their secrecy on what they are doing.
So, I work on the assumption, I do not know for sure, but I know one thing, we can continue with this issue. This issue is going to be important for a long time to come. How would you bring it to the floor? Is there a rule in the House that allows you to bring it to the floor when you have more than half the people in Congress supporting it?
Yes, you can. You can get people to sign a discharge petition, forcing it out. But I haven’t chosen that way, because I think the chances are slim to none to even get Democrats to sign on to it, because they are really partisan. They will sign on to a bill, but to challenge and start going with a discharge petition, that’s sort of like saying, “We’re rejecting the entire leadership of the Democratic party.” And their political livelihood depends on at least a working relationship with their leadership.
So, I don’t see that as being practical. What I do see as practical is building up the momentum of the people and spreading this message and insisting on it. We will be hearing a lot more about this, but the effort to do this, I think shows you what the freedom movement can do. This is one bill, one very important bill, and it could do a lot of good, but it means that if you put the package together right and you are on the right side of these issues and you present them and it’s truthful and it’s constitutional and you can show the benefits economically speaking and you can work on transparency… you can put coalitions together, and that’s what we need to do.
We won’t awe… in Washington, it will be a long time before you get 75 percent of the congressmen to all of a sudden be endorsing all our bills, so it is gradualism.
But to me, the most important thing is prevailing knowledge and prevailing understanding and Nixon, at that time when he closed the gold window and stopped the Bretton Woods, he had said he was accepting wage and price controls because “we’re all Keynesians now” and that, in a way, was profound because in the sense we all were, anybody in the Congress. They still are, they’re all Keynesians, so they have a lot of difficulty in shifting gears and become Austrian economists and free market economists, but that is where the shift is coming and more and more pressure.
I think this is just one incident to show that if the grassroots wake up and the efforts were made and they send it to the congressmen, you can win more and more battles and that’s the reason they got on the bill. It wasn’t because I had any legislative clout. I have no clout up there at all and usually, if you get people to sign on, you have to trade votes, “Well, you vote for this and I’ll vote for that.” But it came from the people and going to these meetings and in many ways, it was done the right way. There was no yelling and shouting like there is on this medical care thing. I don’t think we’re… not that I care that much about people expressing themselves. That’s a little bit of attention getting, but that’s not going to solve the problem.
I think the way the Audit the Fed bill occured, by writing and calling and going to their meetings and being very diplomatic and putting pressure on them. I mean, to think that we have every Republican congressman on this bill and in Texas, all of us including our two senators. Who would have ever predicted it? I wouldn’t have. If had said 2 or 3 years ago when… or even a year and a half ago when the Republican party was laughing at me and booing me and hissing me on the stage anytime I brought up monetary policy or foreign policy, all this stuff, and then all of a sudden, but the Republican party is starved right now, but I just wished that we were able to move into the next stage, that they would capture the whole philosophy, not only on the monetary issue and the thought of auditing the Fed, but this whole idea of why government should be small. I’m in many ways more optimistic than ever, mainly because of the large number of people who have been interested.
The follow up from our campaign, there’s a group now that has been organized. It was spun off from our group. Our group from the campaign is called Campaign for Liberty, but there is a group called Young Americans for Liberty. It’s similar to what Young Americans for Freedom was all about, but remember that was Buckley’s group and it’s sort of done. I mean, that’s about over with, but Young Americans for Liberty is a good group. They’re organizing on campuses. A couple weeks or several weeks ago, they invited me to stop. There was a group that started up at Wake Forest, so I stopped at the north flying on my way back and they had 1,400 kids who showed up on campus, so that’s good.
And the other day, we stopped over into Orlando. It was both that group plus Campaign for Liberty and I think they had like 400 chairs or something set up. They thought they could get that many people interested. I think there were 1,100 or 1,200 people who showed up, so this is very encouraging and I think we just have to keep this momentum going.
But the opportunity is there because this system is failing. The biggest danger is that if it becomes disruptive, which it’s likely to, and it becomes more violent because of the anger and those people who think that it’s proper to have a right to your life, not a right to their life and right to their liberty and obligations to care for themselves, they believe they have a right to medical care and they’ll be very angry and everything they believe in, those people who believe in welfarism and socialism and fascism and all that’s based on violence, the guns of government and authoritarianism because if you don’t go along, you go to jail.
Sometimes you get shot, just by any token resistance to this and if you resist the tax code or the monetary system on principle, constitutional law, no matter how correct you are, you’re likely to go to prison. You know, it can be a pretty difficult situation, so I think my approach to it all has been to take the position that I don’t like the violence and others are preparing for it and maybe it will be necessary, but I just think that it’s the ideas that counts and that’s why I think the John Birch Society has done so well because they understand that issue of ideas and ideas have consequences and that’s what we have to promote. And if we do that, we can avoid the violence but we have to be prepared for it nonetheless.
So I would think in the next few years, nobody knows the timing but this thing could come unglued almost anytime with any precipitous economic or foreign policy event. We’re bound and determined to expand the war in the Middle East. It was once was a Republican war. Now, it’s a Democratic war. Policies are continued. They’re controlled by both parties and it was mentioned earlier that Republicans are having a much better voting record these days. Well, that’s good, but where they were all those years, you know, eight years that you have to start voting against that stuff, but attitudes have changed now. You know, that’s why it’s even more profound that a Ron Paul bill would get all the Republicans to sign on, so that might be a sign that things are shifting.
But we must continue to fight and we should be optimistic that we can prevail. We don’t know exactly what tomorrow will bring, but nobody knows what tomorrow will bring, and in the meantime we have to do our very best and present the case, present the case for individual liberty, constitutional law and a system of government that honors sound money and a sensible foreign policy. If we keep pushing that, I believe in the end we can win. Thank you very much.