Show: Forbes.com’s Intelligent Investing
Host: Steve Forbes
Steve Forbes: What precisely will your bill on auditing the Fed do and not do? Just clear that up.
Ron Paul: Matter of fact, it’s a pretty weak bill when you think about it.
Steve Forbes: Seems pretty mild.
Ron Paul: From their viewpoint, it is horrendous because we know what they’ve been doing. And they don’t want us to know what they’ve been doing. The big argument has always been that they don’t want transparency because they will lose their independence. And independence means secrecy. If they lose their secrecy then the people and the Congress won’t know what they’ve been doing. Who gets bailed out? At what price? And I put an explicit statement in there that we have no intention of monitoring monetary policy, even though I have different views. But you know, when you think of it, Barney Sanders was a co-sponsor in the Senate. He and I don’t see eye-to-eye on the market. But we see eye-to-eye on transparency. So we wouldn’t agree on monetary policy, but we agreed on this bill. But in order to clarify that, Bernanke would say, “What we don’t need is congress coming in the day after we have a FOMC meeting and finding out who said what and why because they may be hesitant.” One of the arguments is, if today Congress had anything to do with this, they’d keep interest rates too low too long.
Steve Forbes: About 1%, right?
Ron Paul: Isn’t that the problem? And they say we don’t want to politicize it. But isn’t it already politicized? I mean, when you think certain companies may have access but the restriction is in the bill to make sure that it doesn’t look like we’re going to look over their shoulders. It’s written so that the Congress can’t look at the books at least for 6 months after they’ve done this. So it’s not going to change tomorrow what they’re going to do.
Steve Forbes: So basically what your bill does is [ask], “Where has the money gone?”
Ron Paul: That is it. Who got it?
Steve Forbes: What criteria did they use to shovel out this money?
Ron Paul: Yeah. And how about which companies were denied? And whether or not the assets were bought at face value, or the market value? If they’re illiquid maybe they’re not worth 10 cents; maybe even less. And they get the full value of it. And I understand that some companies got full value, and some companies got partial value. So that is very, very arbitrary. You can see that if they’re playing those games, how hysterical they’d be if we got to open their books and find out.