Show: Ron Smith Show
Host: Ron Smith
Ron Smith: It’s our pleasure to talk this afternoon with Congressman Ron Paul, a former candidate for the Republican nomination for President, long time Texas Congressman, Libertarian and an idol of an awful lot of young Americans these days, which must be a strange thing, Congressman? You know, judging in past years when nobody much was paying attention to you.
Ron Paul: Yes. I think I can understand it because young people do respond to a principled message about personal liberty. But I am a little bit surprised after many years of talking about the same thing over and over again, to get this much attention, but I think the biggest surprise came with the young people’s interest in the monetary policy. That sort of coincided with our crises and then when I brought their attention to the fact that the Fed is very much involved in the business cycle, they just seem to grasp that very quickly. The older generation, the people who have an interest in the status quo of the current system, they don’t want us to talk about it. It was during that campaign on college campuses that I recognized that a lot of young people want to hear more about the monetary issue.
Ron Smith: The message is getting through that they are the ones who are getting settled with the bill with the reckless and irresponsible behavior of their preceding generations.
Ron Paul: Oh, I think that’s a big thing. They’ve talked about that a whole lot, but I think it’s just overwhelming now, the entitlement system is just out of control. The debt is out of control, the foreign indebtedness is out of control. And then they see the figures about how the money supply can be doubled in one year and the national deficit in one year can be one to two trillion dollars. I mean that catches your attention. You don’t have to be Einstein or have a PhD to recognize that there is a limit to this. I think that’s what a lot of people are recognizing.
Ron Smith: Congressman Paul will present the case against the Fed in Loyola University here in Baltimore, Wednesday at 7 PM, in the Weyer Hall at the University’s Northern Charles Street Campus. And there will be a book signing reception after that. The thing that strikes me these days, Congressman Paul, I have been a believer in what you’ve been saying for a long long time, I’m convinced in almost everything that you say, you know, coincidently shall we say, but the problem now has escalated and is so far out of control, that personally, I’m wondering how in the world can they possibly fix it, even should they want to.
Ron Paul: It would be difficult. If we had charge of dealing with the economic crisis, it would have been though. Because we would want to step back and allow liquidation of debt and allow people to go bankrupt and prices go down sharply, but get the difficult problems behind us and after a year we can all go back to work. And I believe that strongly. But there would have been some pain from this, but the pain would not have been because we wouldn’t bring correct policies, but because we would be trying to correct the past ones.
Politically, though, you do get blame for it. But the answer I give a lot of times to this is. How could you possibly bring on a though time like this on purpose? Well, if we do nothing the times are going to be much tougher. If we go into a period of time where people don’t want our dollars, which is possible, we just can’t just print dollars forever – that would be a lot bigger crises.
You know, it’s terrible to have to pick between two types of crises. One that you bring on to allow the correction, or your wait until the inevitable. I think it’s like drug addiction. It’s much easier to get another fix, to drink some more alcohol. The patient eventually dies, if you do that, but they feel better for a while. And our economy, right now, they are claiming, we are feeling better. But I’m not sure how American citizens who out of work are feeling better. Some of the statistics are improving, but that came from just printing money and pretending these statistic really mean something.
Ron Smith: There are so many things to discuss and so little time to do it, but I did want to ask you. I saw your speech on the Floor of the House of Representatives about the Pentagon Bill and the amount of money, the supplemental bill, where they once again are going to fund the wars in Iraq and Afghanistan. And you have been forthright in your opposition with all of this and you say we should change our foreign policy to one of non-intervention and this gets people spooked, but how can the Empire continue these hugely expensive Eurasian wars with the financial situation that we have?
Ron Paul: It amazes me that there is no intention to cut back. You know, when they see an opportunity they grab hold of it. Take for instance Haiti. I can’t believe there is one American that does not express sympathy for the people of Haiti and their suffering. They were literally raising hundreds of millions, it could be a billion dollars, that the American people give graciously to the people of Haiti. But the other day I voted against a bill precisely because our government has made commitments. Obama went down there and committed a hundred million. Where is his authority coming with a hundred million? But the Congress comes along and says, “That’s OK, not only that, we want the troops in there, we want to rebuild Haiti”, all these wonderful things, but where are they going to get the money?
It would be so much better if they could import free market ideas and sound money. That would help more. Let investors come in and let charity help them out. But this whole idea that this money is endless and that we are going to be able to take on another project, and you know in the Middle East they continue to take them on, I mean we are involved now in dropping bombs on Pakistan as well as Yemen. We are threatening the Iranians, and we are in Iraq, where violence is still going on there today and Afghanistan is in turmoil. So, my guess is that they are not going to listen to us who would have a different foreign policy, but it’s going to end, just as it ended for the Soviets. They Soviets had to break up their system because they no longer could afford it. They became…
Ron Smith: You have been quite alarmed lately, or sounding the alarm lately about a possible social unrest in the United States and what form it might take and you are hoping that it can be averted. I want to get your thoughts on that, when we continue in just a moment, okay?
Ron Paul: Okay.
Ron Smith: Congressman Ron Paul of Texas, 14th Congressional District in Texas is going to be in Baltimore, Loyola University, Wednesday evening at 7 PM, at Maguire Hall, to talk about the case against the Fed.
We are back with Congressman Ron Paul. Congressman, it was like no one saw it coming. I’m talking about the Scott Brown win over Martha Coakley for the Kennedy US Senate seat in Massachusetts. I’m sorry, for the people’s seat. This had to be something that delighted Paulites.
Ron Paul: Yes, I think so. With some reservations. The delight is the establishment, which is a long time establishment in Massachusetts, was challenged and was beaten. So that is a good sign. If you come down to the line of looking at every single thing, you know there will be people who say, “Oh no, he doesn’t support this, he doesn’t support that”. The power struggle is real. The parties are pretty similar. But the power struggle is real. So, if you can shift power away from as much power as the Democrats had, both in the Congress as in the Presidency, this is really good news and everybody should welcome that.
Ron Smith: Politicians of course, also, at least we’d like to think, they know which way the wind is blowing. And if you have a mass movement of people who are dissatisfied with the status quo, there will be ambitious people who’ll get out there and lead, you know, they’ll lead them. It could be the Republican party could have a change of character, like when the Rockefeller Republicans where driven out by the Goldwater Republicans.
Ron Paul: You know, there is a degree; the [...] movements started before the Republicans got interested, yet then, the average Republicans got interested, and he has a choice of just latching on, being challenged by the true believer, or convert a little bit. I even know that some of the people who have been interviewing me over the last couple of years, they used to be more antagonistic, it’s almost like “oh, there are a lot of people who think this way”, and they are not as antagonistic. So you are right, maybe though osmosis and just association, we will have an influence on the Republican Party, even though it might not be exactly what we want. And I think that’s all good, as long as we move away from big government. To me that is a good sign.
Ron Smith: There are problems with Ben Bernanke’s confirmation for another term, as head of the Fed. You’d like to end the Fed, but let’s talk about Bernanke. The Democrats say they have the votes, to reconfirm him. Is that your understanding?
Ron Paul: Probably, but I don’t have any more information then you have and what’s in the news. I just caught it a few minutes ago that McCain would be voting against him, and I thought that is interesting.
Ron Smith: Yeah. I know.
Ron Paul: And he is on the Audit the Fed bill. But you know, Arizona is one of our strongest states for libertarian ideas.
Ron Smith: And he running for re-election.
Ron Paul: Yes, he has to come our way a little bit too. That’s something he would never admit. But he does respond to that and will be voting against him. Obviously he doesn’t think that would be a political liability to vote against Bernanke. I think it’s good.
Ron Smith: Your Democratic colleagues in the House of Representatives, a lot of them are in anguish now, because they were beaten into submission by Pelosi and the leadership in the White House into going along with the health care thing, and now they have to go and answer the voters in November and from what I have been reading, you know better than I, but a lot of them are pretty upset about the whole thing.
Ron Paul: Yes, it’s reflected in how many people aren’t running. How many people have thought about, and one has already switched, and the other ones who are just flat out angry and pushing Pelosi away from it. And I think Pelosi has responded. Some of her comments indicate that that maybe we better take another look at it. We don’t have the votes now to pass the Senate version. You know how often does the Congress has that much plurality in the vote. And they have a large plurality of vote, the majority vote, and yet they don’t have the votes to pass anything now. So, I think that that election really helps serve all our interests.
Ron Smith: Yes. Bernanke, head of the Fed, Greenspan before that for 18 years. You say, end the Fed, that’s your latest book. It’s out now. What is the argument you make in synopsis to end the Fed?
Ron Paul: Well, I have four points at the end on why we should end the Fed. The first should have been enough, but it wasn’t and that was that there is no authority in the Constitution to have a central bank, but that was sort of violated early on. The second one is just the moral issue of money. Why should anybody be able to counterfeit money? The founding fathers wanted no counterfeiting, they wanted no inflation, and that’s why they made gold and silver legal tender. And they said that it was a moral issue as much as anything because you steal value when you dilutethe currency. The other issue is economic. The Federal Reserve is the culprit that creates the business cycle, the inflation and than the corrections, so we just should not and cannot ignore this fact.
Ron Smith: What would happen without it?
Ron Paul: Well, we had quite a few years without it. It depends on what we allow to happen. If we allow the Constitution to exist, they would pass my bill that I just introduced to allow gold and silver to circulate as legal tender and I don’t even take the radical position of saying, “If I my saying, I would close the Fed down tomorrow”. That would not be helpful this moment. But I would put legal competition, so that if you were getting a little bit worried about Federal Reserve notes, you could do all your business in a gold currency. And it would mean that there could be a gradual transition over into another sound currency.
Ron Smith: The financial sector, over the last couple of decades grew to a gargantuan portion of American business, and of course, that’s not sustainable, I mean obviously, and it wasn’t sustained. It has fallen apart. We have this crony capitalism that you’re always talking about. We have the two big to fail banks not just here but elsewhere in the world. The 25 largest banks are basically controlled by the governments and 5 of them are here in the United States, as I understand it. Is it in your view true, as Simon Johnson, the economist put it, that the financial oligarchy has purchased our government?
Ron Paul: I think so. They are in bed with the government. Of course, there are other industries that are in bed with the government too when you look at the military-industrial complex. But the banking industry is a cartel, especially the big banks benefit tremendously, whether it’s the boom cycle or the bust cycle, they are the ones who get bailed out. They can borrow money at half a percent and loan it out at six percent and all of a sudden they are making huge profits again. They are paying all the money back. And everybody is happy, but who owns the bad debt that they used to own? We do. That is the immorality of the system. It’s a way of dumping on the middle class. There is a saying in free market economics that if you have a currency destruction, it wipes out the middle class. I think that’s what we are seeing. In the past 10 years…
Ron Smith: Well, if you see that though, then you have social upheaval of a tremendous nature.
Ron Paul: Right. That has been a big concern of mine and we should try to avert it, but if it comes, if we have the right answers to this, let’s just hope that we can influence other people who can say it’s better to follow up and improve upon and advance the ideas that the founders held and move forward in a civilized society rather than going backwards.
I look at freedom as a very new idea. Just a couple of hundred years old, where it’s really been practiced, and now we have difted away, we are going in the wrong direction. So, an upheaval, if we do our work, maybe we can influence people and say “hey, maybe freedom is the way to go, why should we go back to dictatorship, they have been around for five thousand years, we don’t need tyrants to tell us what to do”.
Ron Smith: But they are the ones who with the guns.
Ron Paul: Well, there are a few guns in America. There is still a chance for a little bit of resistance.
Ron Smith: Well, you know, I’m speaking personally, I’ve admired you for many years, because you’ve seemed to me a man who stands up and speaks truths that the guardians of correct opinion don’t allow usually to be sounded, so congratulations to you. In a sense your time has come in that so many people are now paying attention that what you’re saying, so that’s a wonderful service to the Republic, I do believe.
Ron Paul: I appreciate that very much. There are lot of others who worked at it as well and still do, so I just sorta blend in with them.
Ron Smith: Well, thank you, Sir. Wednesday night you speak at Loyola University at Maguire Hall, University at North Charles Street Campus, the time is 7 PM. And you will present the case against the Fee.
Ron Paul: Right.
Ron Smith: Thank you very much Sir.
Ron Paul: Thanks for having me.
Ron Smith: Bye bye.
Ron Paul: Bye bye.