Channel: Fox Business
Jenna Lee: We’re joined now by an outspoken citric of the Federal Reserve who has been calling for its audit. Republican Congressman Ron Paul of Texas is with us for his take on all of this. I have to first ask you about this Person of the Year choice. Here’s what Time said, Congressman Paul. They said that he basically didn’t just learn from history, he wrote it himself. Do you think that he deserved this honor today?
Ron Paul: Oh yes, he deserves the honor but for a completely different reason. I find that Bernanke is the greatest counterfeiter in the history of the world. He has created new dollars out of thin air more than anybody else, and we happen to have the reserve currency of the world. So he was a participant in the grand bubble. He’s responsible for the crash. He didn’t save us, this thing isn’t even over yet. So I don’t see him as being a savior. He’s the participant and he is a counterfeiter. And for this reason he is the most powerful man in the world; he is more powerful than the president.
Jenna Lee: Congressman, one of the things that Time did point out was that he did make sure that the system had lots of excess liquidity. Yes, the dollar is under pressure and I know that bothers you, but at the same time we did not go into another great depression. And we are technically out of a recession now in this country. You don’t want to give him any credit for any of that, sir?
Ron Paul: No, it’s temporary. We might be in 1931 or 1932, so hold on to your chairs and hang on to your hats because it’s not over yet. And he himself was in office for over 2 and a half years before the crunch. Go back and read all his statements. He said everything is going well. Did he take over the chairmanship and say, “Oh, Greenspan inflated too much, he created this bubble, and we need to protect ourselves and prevent a crash”. No. He continued the process, he allowed the crash to occur. And then the very cause of the crash – he doubled that effort. Too much inflating of the money supply was the cause. So what did he do? He inflated even more and more. There should be a picture on Time Magazine with him flying a helicopter pushing out money. Because he’s known to saying that; he’s Helicopter Ben. I mean that would have been a great picture, and I would say, “Yes he deserves every bit of it”.
Jenna Lee: Congressman, my colleagues here have a couple of questions for you. Gentlemen, go ahead.
Michael O’Rourke: Congressman, this is Michael O’Rourke. What Ben Bernanke did is traditional central bank practices. Alexander Hamilton, as the first security of the Treasury, did many of the same things that Ben Bernanke has done. I’m taking you have a problem with Hamilton as well then?
Ron Paul: Oh, certainly. Because I would have been with Jefferson. I would have be arguing on the side of Jefferson who ended the first central bank, ended the first national bank, which was Hamilton. So yes, it started all with Hamilton, but the Constitution was still on the side of Jefferson; that we weren’t to have a central bank. There is no authority for a central bank. Only gold and silver can be legal tender. We shouldn’t be running up these deficits and running up this borrowing. We can’t even borrow the money, so we print the money. It’s insane.
Gregg Jarrett: Congressman, you also make a pretty startling claim in your weekly column. I am reading it right here: “The Fed used its immense power to help elite friends”. Who?
Ron Paul: It sure didn’t help the homeowners, it sure didn’t help the people who lost their jobs. But it sure helped Goldman Sachs and other companies that got bailed out, and the big banks.
Gregg Jarrett: If those companies and banks hadn’t been bailed out, weren’t we looking at something that would have badly injured the world economy and caused, perhaps, a great depression instead of a recession?
Ron Paul: Well, you’re postulating.
Gregg Jarrett: Well, aren’t you?
Ron Paul: Like in the 1930s, we prolong the agony. Well, it all depends on what economic policies you understand. But no, we’re prolonging the agony, we’re doing exactly the wrong things. We did this in the depression and it doesn’t solve our problems. So I would say that there has been no success. It’s like you say that a patient comes to me be and they’re a drug addict and having withdrawal symptoms. And I’ll say, “No sweat, I can take care of it. Here, I’ll give you the drug injection.” And the patient walks out feeling pretty good. The problem is still there. The problem is still there, and that’s what we’re in denial about.
Jenna Lee: Well, I want to move away from this real quick. I want to bring in our correspondent, Peter Barnes, who is also in Washington where you are. Peter, you know, Congressman Paul has been very vocal, he wants more auditing of the Fed. But Mr. Bernanke, even I believe yesterday, was still giving statements to Capitol Hill saying that he believes that the Fed does need more power. He wants to protect the power of the Fed. Isn’t that correct?
Peter Barnes: Yeah, and I’d like to ask Congressman Paul while we’ve got him here because let’s talk about practical politics here. Now the nomination is going to be voted out of committee tomorrow by the Senate Banking Committee. And then it will go to the senate for a vote, probably in January. And there are several co-sponsors in the senate for Congressman Paul’s legislation to require more audits of the Fed, including audits of monetary policy. It would pass in the House tomorrow; Congressman Paul has 350 some co-sponsors. And in the senate it hasn’t been given much of a chance until now, because we have several senators who are threatening to filibuster Chairman Bernanke’s nomination vote in the full Senate. And the price of allowing the vote to go forward maybe a vote on Congressman Paul’s legislation in the senate. Congressman Paul, what’s the outlook in the Senate for your legislation?
Jenna Lee: Let him respond.
Ron Paul: Well, first off, it has already passed the House, it passed the committee and it’s in that banking bill. So the auditing of the Fed is in the house bill. So in the senate, no it’s a lot more different. The senators aren’t as responsive to the grassroots. This is a grassroots movement. And this is the way it’s been in the past. The grassroots usually rebel against fiat money and inflationism because the people want value in their money and they don’t want to lose their jobs. So they’re the ones who have rebelled and the senators aren’t that responsive.
I think Bernanke will end up being nominated. If I were there I’d vote against him. But I’d also make the point that that’s not really the discussion. The discussion is should we have a secret bank fixing interest rates and trying to do central economic planning with no oversight of the Congress, giving us these financial bubbles. Everybody talks about Bernanke and what he did to, maybe, soften things a little bit as of the moment. But nobody asks, how did the bubble occur? Where did the housing bubble come from? Where did the NASDAQ bubble come from? Where did the stock market bubble come from in 1929? It’s all from the Fed, and that is what we have to direct our attention to, otherwise we’ll repeat this over and over again. But unfortunately it won’t be as easy to reflate this bubble, because right now what we’re gang to do is work on the destruction of the dollar. And that’s another problem and it’s much bigger.
Jenna Lee: Congressman, we don’t have a lot of time with you, but we have another question for you here in New York.
Person in New York: Congressman, in principle I agree with you on many issues as far as how we got here, as far as Fed policies in the past. But going forward, is this the correct way? Because I think you’re risking… You think any Fed chairman is a bad Fed chairman, I would say based on the way you talk and that you don’t want the Fed to be there. So are we risking taking the independence of the Fed and putting it in the hands of Congress where you have legislators driving monetary policy in this country? And I guess my point is, in practice are you taking your own beliefs and making the situation worse?
Ron Paul: Well, that’s a total misinterpretation of what the bill does. And, of course, that’s what Bernanke says it does, but it doesn’t. It excludes any control of the Congress over monetary policy. Otherwise I couldn’t have been able to get 317 co-sponsors, because I don’t want to run monetary policy here. And we wouldn’t agree on it anyway. So that is not the issue. The issue really is how much responsibility does the Congress have over the Federal Reserve that can create money, make loans, make deals, have agreements with central banks, have agreements with other governments. That is the whole issue.
Jenna Lee: Alright, Congressman, real quickly before I let you go. It’s a very busy day in the house today. Got a lot of votes and they’re happening right now. Particularly where are you guys and gals?
Ron Paul: Well, right now we’re just doing a lot of cleaning up. We did not get to the medical bill. We have to do things like adjournment votes and a few things like that. But no, there’ll be a lot of votes and I suspect we’re going to be there late tonight.
Jenna Lee: Alright, Congressman Ron Paul from Texas. Congressman we always love having you on Fox Business. We have to see you again sir, thank you.