Ron Paul on Fox Business: Geithner and AIG

Channel: Fox Business
Date: 1/27/2010


News Anchor: Well folks, we are joined right now by a very special guest, Congressman Ron Paul, who in a little while will get a chance to question the secretary as today’s hearing continues. Congressman Paul, what do you plan to focus on during your questioning with Mr. Geithner?

Ron Paul: Probably why we need transparency of the Fed. I mean, he comes out and says, “Oh yeah, transparency and auditing the Fed is all fine, except for those things they want to keep secret”. But if we’d have clear knowledge about what’s been going on and what has gone on, maybe there wouldn’t be so much of this going on, all this secret bailing out to the tune of hundreds of billions of dollars, and sticking the taxpayers with all these worthless assets. So to me it’s a travesty, and yet they say this is a wonderful system and Geithner takes the argument that if we wouldn’t have done it, it would have been the end of the world. Yet today, it’s the end of jobs for a lot of average citizens at the same time that Wall Street gets bailed out.

News Anchor: Well, congressman, though it’s the same point. We’ve been listening and we’ve been monitoring his testimony over the last two hours, and he has said over and over, “I had no knowledge, I didn’t instruct AIG to cover up any type of payouts to the banks.” You’ve heard several other attorneys, people that worked on the deal from the New York Fed say, “Look, there were legalities involved with AIG and that we had to do the payouts. There were contracts made with the banks, between the banks and AIG. You can’t stop that, you can’t change the law midstream”. How would you respond to that?

Ron Paul: Well, you’d wonder why they allow a company like Lehman to go bankrupt. They said this one was just too big to allow to go bankrupt. I just don’t happen to believe that. The good assets of AIG would have been bought up. There would have been no reason for us to have to buy these bad assets that have no value and bail out Goldman Sachs and the banks. That, to me, is just an atrocious action that we shouldn’t tolerate. These hearings are great. They make the point that the Federal Reserve is very much involved and it makes my point that we need more transparency, and we shouldn’t allow the Federal Reserve to be doing these things. It also makes the point that as much as I blame the Federal Reserve, I blame the Congress. The Congress created the Fed, they’ve exerted no oversight and I don’t think anything will ever be the same again. I think that from now on the American people know about the Fed and know why we should have transparency.

News Anchor: Alright, Congressman Paul. I mean, I know that you propose legislation for more power to audit the Fed, I understand that. But should we not be focusing on Ben Bernanke? Why are we focusing today on Tim Geithner, who said over and over that he does not have anything to do with these payouts to AIG. Why not move over to the Fed today?

Ron Paul: I think no. I don’t think anybody believes that. I mean, if it is true, how can you be the head of the New York Fed and say, “I didn’t even know what they were doing”. So we made him secretary of the treasury? I mean, if he didn’t know what was going on, he did make the important decisions. The only thing that he denies is that he had anything to do with keeping it secret. That’s what he is saying. He isn’t saying that he didn’t participate in the decision making. There is a big difference. And you know, when people in higher places need the people under them to make decisions, they conveniently allow them to make some decisions. But, nevertheless, the details of this are less interesting to me than the overall policy and overall monetary policy and the reason that we have to get a handle on the Federal Reserve.

News Anchor: Alright. Well, Congressman Ron Paul from Texas, I know you got to get back in there. I know that your turn at the lectern is coming up. I’ll let you go. Thank you, Congressman Paul, great to talk to you, sir.

Ron Paul: Thank you.