Download the interview as an mp3 file here. (16:12 min)
Lew Rockwell: Well, what an honor it is to have as our guest this morning, Dr. Ron Paul. Ron, of course, the congressman from Texas, more importantly author of so many important books, most recently, “End The Fed, the man who with his presidential campaign, and I might say, his entire public life has inspired millions of especially young Americans and young people all over the world for the cause of liberty and sound money, of peace and of opposing the sort of runaway government that’s happening in the U.S. right now. And Ron, first let’s talk about the Fed. I mean, you of course have always been the key battler against central banking and against the Federal Reserve, Greenspan, Bernanke and all of them. What’s happening with your bill to audit the Fed?
Ron Paul: Well right now it is sort of in limbo. We got it into the reform package in the House. As bad as the package is, that’s one item in that reform package that’s worth something. In the Senate, we didn’t get enough strong support over there and the Republicans didn’t really fight for it and at the Senate side it is not included. Matter of fact, they have included Mel Watts’s language. His language and my language competed in the House Financial Services Committee and of course we won that pretty easily. But they inserted that in so Mel Watt and the bankers were able to influence the senators enough to put their language in there. So what probably will happen is the two bills will be passed. It’ll be in one bill and not the other and then the fight will be to put pressure on the conference to go with this House instead of the Senate.
Lew Rockwell: You know, Ron, Mel Watt of course is known not as the congressman from North Carolina, but as the congressman from Bank of America. So he represents the banking industry, obviously the banking industry benefited by the Fed, that’s why they set up the Fed back so many years ago in Jekyll Island, Georgia as you’ve talked about. So, don’t you feel however, regardless of what these, how shall I characterize them, these gentlemen in Congress, do with your idea of Fed transparency, don’t you feel that it’s been an incredible success already in terms of alerting Americans, engaging Americans, enraging Americans, about what this central bank does and how they wanna hide it all?
Ron Paul: Yeah, I think, regardless of what happened in a technical fashion with the legislation, we’ve won a whole lot. Besides, you know if we got it passed then we’d have to worry about whether the President’s going to sign it and he probably would sign it with a signing statement and maybe have it never carried out. But the other thing is the Fed would fight it in the court just like they are fighting the Freedom of Information Act suit too even though they’re losing a little bit there.
I don’t expect the Fed to give up easily. I can see them destroying records before a true audit would occur. But like you point out, the real benefit is exposure of the Fed to the general public, and this is very very healthy because I work on the assumption that we should do everything possible to slow this mess up, do what we can to make positive changes but also work on the assumption that they are probably going to get ahead and drive us into bankruptcy with the destruction of the dollar or a lot more financial chaos then the more people that are informed, the more likely it is that we will resort to sound money and get people to understand why paper money doesn’t work. So that’s where we are making the progress and as you know, the college campuses have come alive with this issue and I know a lot more people are interested in studying Austrian economics, so I’m very pleased with what’s happening outside of Washington and as far as I am concerned, that’s the only thing that really counts ultimately.
Lew Rockwell: You know what, if I could make a personal note like you I’ve been interested in this issue for decades and for the longest time when you were trying to talk to anybody about it. Well the Federal Reserve there was a name of a bill in their pocket in their wallet, but otherwise their eyes would glaze over and they were totally uninterested. They did not realize they were being ripped off, they didn’t realize what it meant politically, constitutionally, economically. But building on the work of Mises, Rothbard, Hayek and Hazlitt and all the great Austrians, you have made people aware of it, so that today, I think back to that amazing time during your presidential campaign on the University of Michigan campus where the kids all started chanting, “End the Fed!, End the Fed!”.
Ron Paul: Pretty good. The financial crisis certainly helped us to call attention to the people of how the bailouts occurred and how the Fed could create $2 triliion and pass it out and not even answer the questions to the Congress. But what do you think’s going to happen when price inflation is roaring? I think there’s still a lot of price inflation going on, they say there isn’t. But I’ve always argued that there’s a factor in the cost of medical care that pushes cost up too so the inflation is around. Can you imagine though the attention we’ll get if we have prices going up like they did in the 1970s, I think we will really get a lot more attention to the Fed and that’s healthy that we’re directing attention to the proper place.
Lew Rockwell: And of course this is why they’re worried. This is why they don’t like the tea parties. This is why they don’t like the sorts of things that educate people about what the government is doing to them. We’re all supposed to accept it. I hear we have this, most recently this Obamacare business, which has vastly expanded and already terrible federal intervention into medical care. What do you think lies ahead in that area?
Ron Paul: Nothing good. Nothing good because it’s just going to compound our problems. The worst thing is, the thing that I’ve always been concerned about is the doctor-patient relationship because I don’t like anybody or anything to be between the doctor and the patient. The patient and the doctor should make the medical decisions and they should be making the financial decisions. They lost the control of the financial decisions and therefore they lost the control of the medical decisions and this is going to get much, much worse.
And I think the worst part of the bill is not so much what they’re talking about but the undermining of the medical savings account where individuals can make some decisions. But now everybody is being forced, you don’t have any choice in the matter. I argue that as bad as public education is, if a person is alert, there’s still enough freedom left that you can homeschool your kids and go to a private school and you can study on the Internet and still survive.
But in medicine now, you’re not going to have a choice, you have to obey the government. Every insurance company will have to obey all the rules of the government which means now you have the management companies, you have the drug companies, you have the insurance companies and now you have the government bureaucrats and the politicians who are changing the rules all the time.
They’ve all gotten in between the doctor and the patient. This will discourage even more doctors, more doctors will leave, the quality of people going into medicine will be diminished and the cost will go up. And the ultimate answer to this for the bureaucrats is that “now that the demand is too great, we’ll have to ration the care” and all I can see is quality of the care will continue down.
Lew Rockwell: Ron, I know that doctors for example who take Medicare and I want to mention that in your career as a physician delivering more than 4,000 babies and doing many other things for your patients, you never took Medicare or Medicaid, you were responsible to the patient, you wanted to maintain that employee-employer relationship because of course the doctor is the employee of the patient in a proper and free market system. Not the Cross or the government or whatever. But I’m wondering since already it’s very troublesome may be illegal for a doctor who’s taking Medicare to have private patients, are they going to make it illegal for any doctor to have private patients, to have an entirely private medical practice?
Ron Paul: Probably except for themselves, the politicians, you know like in the Soviet Union, they always had a private doctor to take care of them. So I don’t think it’s going to happen real soon but that’s likely what will happen, they will move in that direction and of course that will be very unfortunate.
Lew Rockwell: I remember in the early days of when Obama first started talking about this, he was in one of his town meetings and that it was an actual question asked by a doctor and he said “Will you pledge to the American people that if your plan goes through that you and your family will be under it and you will not use your political power to get yourself or your family better care than the average American?”. So Obama paused, you have to give him credit for that, and he said, “No, I won’t promise that.”
Ron Paul: Oh boy, that should have awakened everybody.
Lew Rockwell: But somehow the media don’t talk about that but of course that’s right. None of these people, and I hear even the congressional staffers who wrote the bill are now being exempted from it.
Ron Paul: Yeah, as a matter of fact I just signed on to a bill that would change that, not only for the members of Congress but for all the staff people, they would have to get in the same system. But the politicians and the government officials tend to protect themselves all the time.
Lew Rockwell: And I thought it’s an amazing clarification of the whole Obamacare as you’ve pointed out that this bill hires another 16,500 IRS agents.
Ron Paul: Well, they need to collect some more money. They’re pretending that this isn’t going to cost anything. But it’s been estimated that the hidden taxes would be about $4 billion. But this idea that you could give 30 million people free medical care and actually save enough money to reduce the deficit is so preposterous, I think that helps to just totally destroy their credibility.
But just the whole idea that this depends on more thugs, more people coming armed, more force, more violence, you know they worry about the violence of anybody and everybody except the government it seems. But that’s what it is, government violence, that means IRS agents, they’re going to carry guns, they’re going to collect these, they’re going to enforce these rules and they’re going to make sure everybody does what they’re told.
Lew Rockwell: Ron, I noticed that the Republicans and of course the Republicans are saying they’re going to repeal this. I noticed the Republicans have never repealed anything in the entire history of the Republican party and they are all for it except you and a few others who are all for Bush’s crazy Medicare Part D expansion of the welfare state. But I noticed now they’re going after you, maybe even talking about taking away your committee chairmanship or your ranking membership on the Monetary Policies Subcommittee in the next Congress because you are one of the ones who would not go along with the moratorium or so called earmarks, so what is this about?
Ron Paul: Well, that’s been ongoing, but it seems to be coming to a climax. It’s coming to a climax right now because the Republicans have said we were going voluntary not request any earmarks. Of course my idea of an earmark is just designating how the spending should be done and if the government robs the people with highway funds, this seems logical to me that if there’s a reasonable request that a US member of Congress should request some of your money back and designate it for a particular highway. But that’s called an earmark and you’re not supposed to do that and they use this to pretend they’re really, really tight on the budget.
If you’re building an embassy in Baghdad, now that’s not an earmark, that doesn’t count, or a weapon system, that’s not an earmark. It’s only if you’re bringing money back to the district. But my big argument there is the prerogatives of the Congress. The Congress has the responsibility they’ve reneged on it and over many, many decades. They keep giving up their responsibilities and their obligations and they deliver these responsibility to the executive branch and they’re not bashful about that position. Many members of Congress openly say “Well, the President has to have the power to go to war, to arrest people and torture people and all these things.” So I don’t want to give them one ounce of authority or power, the executive branch that is not given to them in the Constitution.
So I’m taking this very strong position saying yes, we should designate more, not less, we should vote against the spending because all the spending is very very bad. The interesting that it has happened on this though is since they have badgered all the members into this voluntary effort to not ever ask for an earmark, so many members have come to me now to say, “boy I sure wish I have taken your position” because they know what it means and they know that it doesn’t make any sense and now they know that there’s actually a constitutional argument that could defend that position, so I don’t think that thing is going to amount to anything.
But it has been in print. Yesterday it was in print that the leadership has threatened that they would take subcommittee chairmanships away. But that has been my goal in life and in the Congress. I wouldn’t have taken a break [from Congress] to play their games, to build up seniority, and right now I would qualify to be the Chairman of the Financial Services Committee, but you know, that will be despicable as far as I am concerned because you’d have to toe the line and accommodate the bankers because they won’t let you do it anyways. I just think this whole argument over the earmarks from the so called fiscal conservative is nothing more than a red herring.
Lew Rockwell: Ron, I remember when a foreign government operating through a very powerful Republican reached into the Congress and prevented you from being on a committee because you were against foreign aid and of course the bankers have in cooperation with the bad guys in the Republican party even abolished a subcommittee once to prevent you from being chairman of it. And of course that didn’t affect your position, you still stick to your position, you still have your principles and obviously this is not going to work either.
And in fact I predict that if they try this, the whole Ron Paul movement is going to mobilize and if they think they’ve seen anything with the tea parties, they better wait till they see that happen. Let me emphasize again for people listening, earmarks do not increase spending, it simply is an allocation of spending so the question is from a constitutional standpoint and division of power standpoint: should spending decisions be made by the Congress or by the bureaucrats in the Presidental branch? And all these people who are attacking earmarks as you say, are for the President being able to declare war, torture people, declare Americans as enemy combatants and torture them, maybe kill them, assassinate them. So they believe in a presidential dictatorship so your stats on the whole earmark question is part and parcel of your opposition to presidential dictatorship.
Ron Paul: Yeah. If you cut spending, every once in a while there will be a vote on cutting an earmark and it does designate this must be cut in the spending but it’s very, very rare, most of the time it means the money just goes to the executive branch and they make all the decisions.
Lew Rockwell: Well, Dr. Ron Paul, you’re an inspiration and it sure is great to have you on the show and I want to remind everybody of your latest book, End The Fed. Take a look at all of Ron Paul’s books and Ron, keep doing what you’re doing.
Ron Paul: Thank you very much. Glad to be on your program.
Lew Rockwell: Bye.
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