Ron Paul Reacts to Ben Bernanke as TIME Person of the Year

Show: Morning Joe
Channel: MSNBC
Date: 12/16/2009


Joe Scarborough: If I could pick someone to follow up Rick Stingle’s person of the year, Ben Bernanke, seriously, it would be our next guest. Introduce him.

Mika Brzezinsk: Republican representative from Texas and member of the Financial Services Committee, Congressman Paul joining us on the set of Morning Joe, nice to have you on sir.

Ron Paul: Thank you.

Joe Scarborough: You actually just wrote a book about the Fed. I mean, by God, tell us? Off camera you were telling me that you think that Ben Bernanke probably deserves to be person of the year because of the power he has.

Ron Paul: Yes, he’s the most powerful man in the world; I believe a case could be made for that. Because he controls the supply of money, which is the dollar, which is the reserve currency of the world. He can create a trillion dollars in secret without any monitoring of the Congress. So, there is no transparency. And I think he’s more powerful than the president.

Joe Scarborough: The president we are talking of here, again the president has all these checks and balances. Bernanke and every other Fed chief operate in secrecy. Like you said, he can create a trillion dollars out of thin air.

Ron Paul: Right. The big question is: has he used that power for good, or for evil? And, of course, my side of the argument is the system is evil, and the chairman, whether it’s Greenspan or Bernanke, they can do no good. They cause our troubles, they cause the inflation, they cause the bubbles. And, therefore, the bust, the correction, is always their fault. So the problems that we have and because this is such a worldwide phenomenon, you know, since 1971 everything has become worldwide and global economy. There is no backing of any currency. And yet our Federal Reserve controls the gold, so to speak, the paper gold. And therefore this whole mess that we’re in, which has a long way to go, has been caused by the Federal Reserve.

Pat Buchanan: Alright, that’s exactly what I was going to ask you. We just heard Rick Stingle say [Bernanke] saved us from a great depression.

Mika Brzezinsk: From the brink.

Pat Buchanan: He pumped 3 trillion dollars into the economy. Who was responsible, if you name one, two, three people or institutions, to take this country, the greatest country on earth, to the brink of a depression?

Ron Paul: Well, the Federal Reserve.

Joe Scarborough: How?

Ron Paul: By creating money out of thin air, causing interest rates to be low, causing the malinvestment and causing an artificial economic expansion that has to correct. Like if you build too many houses, eventually it crashes.

Joe Scarborough: Bernanke gave us the disease and cured it, both.

Ron Paul: Yeah, but there are other things that contributed to it; like Congress having laws that say you must make bad loans and give money to people who don’t qualify.

Joe Scarborough: I got to interrupt you, Pat. You read my book?

Pat Buchanan: Right.

Joe Scarborough: That quote by Ron Paul, and I remember the date: September 10th, 2003. And buy my book or just google “September 10th 2003, Ron Paul“. In September of 2003 you predicted in the banking committee exactly what was going to happen in 2008.

Mika Brzezinsk: Word for word.

Joe Scarborough: Word for word. And I read that and people always say, “Are you making that up?” You knew in 2003 what was going to happen.

Ron Paul: You’re better than I am, I can’t remember the dates. I knew that was the position I’ve taken for years and years. And, matter of fact, I was motivated to go into Congress and run for political office in the 1970s because I understood the principles of malinvestment. But I didn’t come up with these ideas. It’s the Austrian economists and the sound-money people that said this would happen; and they were correct. Matter of fact, when the Bretton Woods System collapsed in 1971, that was the confirmation that Austrian economists were on the right track.

Joe Scarborough: Buchanan, didn’t you want to […] some Austrian economist?

Pat Buchanan: I said something about dead Austrian economists during one of my […]. Murray Rothbard… They were gone.

Ron Paul: He was your friend.

Pat Buchanan: He was always my great friend, but we slam-shut the gold window in 1971. I was with Nixon in August. That’s what you’re talking about.

Ron Paul: That’s your fault.

Pat Buchanan: But look, what were you going to do? They had all that money abroad and if you ask me… the Brits wanted to come in and clean out Fort Knox. What would you have done?

Ron Paul: Well, you should have done a lot more a lot sooner. That is don’t print so much money.

Pat Buchanan: It was LBJ’s guns and butter. But what do you on that day? I mean, my friends tell me you should have let them clean it out. You can’t do that.

Ron Paul: No, I would say that was only half the thing. If you’re going to quit, what you have to quit is printing the money. So we quit handing out the gold, but then we said we’re just going to print money and there is no restraint. So what you ushered in was a system in 1971 which created this huge, huge bubble and that’s where the real problem was.

Mika Brzezinsk: But congressman, given the bubble and given restraint, where would you stand now on regulation? Would somebody like you say less regulation or off to the crisis? Or would you say actually we do need tight regulations?

Ron Paul: Well, I want more regulations of different things. I want more regulations on Treasury, on the Congress, and on the Fed. But I want to have less mischief by bureaucrats because they do a great deal of harm. We introduced a lot of regulations in the 1930s and it just prolonged the depression. When we had Enron fail we had Sarbanes Oxley. That did harm because our businesses left our country. I don’t like those kinds of regulations. But you have to enforce regulations like contracts and bankruptcies. We ignore that. We don’t follow the contract of money, so the government does everything opposite. They violate contracts and they don’t use bankruptcies. They bail out people. So yes, you want the market to regulate, you want to get rid of bad investments and people who are bankrupt.

Joe Scarborough: Ron, really quickly, we’re coming up on a hard break. But I’ve got to ask you about Afghanistan. Pat Bucanan, myself and other conservatives are very concerned about the so-called surge. We’re concerned we’re going to be in Afghanistan for another decade. What do you think?

Ron Paul: Well, we’ll be there for a decade or longer if the money holds out. But because we are doing exactly what Osama Bin Laden wanted us to do, that is get ourselves bogged down, spend a lot of money, and get people discouraged about being bogged down. At the same time have an incentive to build up the Al-Qaida. So we’re doing exactly the same.

Joe Scarborough: The thing is Al-Qaida is not even there.

Ron Paul: Yeah, but there are a lot of people who hate our guts and they do it because we bomb them, invade them and occupy them and steal their oil and all these things. So that’s going to continue.

Joe Scarborough: What would President Ron Paul do?

Ron Paul: The troops would have been home by now. I’d bring them home. You know the famous saying, “Declare victory and come home”. There is not much victory to declare. But just come home. I’d come home from Korea and Germany. Save the money. This country needs the money, we’re all broke. Quit printing the money; save the money.

Joe Scarborough: Alright. […]

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  • Joseph Giallombardo


    Robert Rubin. Sorry, I misspelled his name. Clinton’s Treasury Secretary.
    Despite your rude behavior, I do know what I am talking about.

    Are you saying the unregulated, secretive derivatives market which has brought the world to a financial meltdown was a good thing?

    The question remains a serious one. And I am looking for a more complete answer.

    What is a more complete response from the AusEco view to which Greenspan religiously clung to, until his admission that he was wrong, before the Congressional hearing on the matter?

    Joseph G.

  • Joseph Giallombardo

    Austrian Economics

    How would an advocate respond to the unregulated speculative investments in derivates that happened on the watch (in the late 90s) of Ruben, Greenspan and Geitner?

    It turns out the head of a Govt Agency, attempted to blow the whistle on this secretive, unregulated derivative speculation and was shut down by the “inner circle” of Greenspan, Ruben and Geitner as well as the SEC Chairman at the time, who all said, that NO regulation is needed.

    They went even further, when her agency attempted to blow the whistle, by getting congress to directly restrict her from an investigation, let alone regulation.

    When the WHOLE thing blew, starting with Fred/Fan leading to AIG and other institutions, Greenspan admitted before congressional hearings that he had been “wrong” about free-markets.

    In one aspect you could say, that if their had been NO bailout, then the derivative speculators may have learned their lesson; still, must people learn, too the hard way, that banks are supposedly trustworthy only find out that their homes are worthless or that that have lost or will lose now their life savings when the runaway, hyperinflation comes because of the bailout action.

    So, what’s the answer NO regulation, NO oversight, that may have prevented this problem in the first place? Isn’t the truth that you have to guard the chicken coop or the fox will get in.

    Answers please!

    • Forest

      Hmmmm, ‘Credibility FAIL’

      How about a question… Who is this ‘Ruben’ you continually refer to?

      Since you apparently have no idea what you are actually talking about, unregulated, speculative investments are a good thing! That would be the powerful, yet invisible hand of the free markets working!

      Greenspan wasn’t ‘wrong’ about free markets! They were never actually ‘Free’ because ‘Free’ markets don’t fail?

      Wait, all this hypocrisy this website has filled me with is starting to get a bit too obviously confusing. 🙁

  • sean

    Ben Bernanke speaks out about the taylor rule and how the federal reserve has not followed this rule of thumb to prevent bubbles and how they will have to in the future.


    • sean

      Well he actually proves how the housing boom was influenced more by incoming foreign capital rather than monetary policy.

      • longshotlouie

        He hardly ‘proved’ anything except the folly of micro-managing an economy.

  • Redfish

    I still can’t believe that they’d entrust the banks with trillions in reserves. Hasn’t anyone learned yet??!!! The banks can’t help themselves. Greed is their psyche, their bread and butter, their be all and our end all. This is a culture of corruption. Who da man? Ron Paul is da man! Out with the old and in with the new. Happy New Year to all and to all a g’nite