News Anchor: The president has been criticized for his response to the oil spill. But he has an ally in a rather unlikely place. Here now is that ally: Congressman Ron Paul, Republican from Texas. Congressman Paul, it’s wonderful to see you again, I appreciate it.
Ron Paul: Thank you.
News Anchor: And I know, sir, that you have come to the defense of the president on this issue. You’ve described yourself as a pretty strong critic of him and his administration. Why do you think that he’s done an okay job when it comes to the oil spill?
Ron Paul: Well, in its entirety, I guess I would dissect that out. But in general, I would say that it has been unfair for him to get all the blame for an accident committed by an oil company. And at the same time I said that I think we overly blamed George Bush for the hurricane. I mean, there are sort of limits to what governments can do. I did suggest that he could have done more to get out of the way and allow the states and individual property owners to do what they could to protect their property. But to blame the president for everything that has gone wrong down there; I just think that we’ve developed a culture where everything is to be solved by the government, you know, anything that goes wrong, the president is responsible, he has to take care of it. So I think even his Democratic alleys have come down pretty hard on him, and at times unfairly. I’d much rather have them talk about why the war is continuing and why are we target American citizens for assassination and a few other things like that, and not come down hard on him for not doing enough about the oil leak.
News Anchor: Let me just follow up on your point about how everyone is saying they want the government. We did a non-scientific survey today on CNBC, asking, “Who do you blame more for the oil spill?” And our results were: 41% of our viewers said they blamed BP more than the government. 59% blamed the government more than BP. And I guess my question to you is this: you mentioned the Democrats. But what the great irony seems to be is that a lot of people on the right, a lot of Republicans are the ones criticizing the president for not doing enough. The very people who, a few weeks ago, were saying, “Government should get out of things,” are now saying government should get in.
Ron Paul: Well, I think there is a lot of partisanship. I like to think of how this would have been accomplished if we would have had a freer market and property rights. If we had property rights, somebody would have owned the fishing rights and oil drillers couldn’t go in there unless they got permission from the fishermen. And there would have to be provisions, there would have to be bonds put up and there would have to be provisions for accidents like this. But no, government gives them permission, they limit the liability of the oil companies and then they say the taxpayer will pick it up. That’s a moral hazard by saying the government is going to inspect and give the license and protect everybody. So it’s the system that is wrong, rather than saying, “Well, the government just hasn’t done enough”. They probably did too much, too soon. And we should think about another approach to problems like this.
News Anchor: Would you remove limits on liabilities then, the cap?
Ron Paul: Oh, absolutely. I mean, they shouldn’t have any limits, it’s a rich company. The people on the left who think they want to protect some of these people who have suffered by bankrupting the company and not buying their oil – No, you don’t want to bankrupt this company, this a healthy company. But they should be held a 100% liable for anybody who is lost, and those are the kind of contracts that would have been designed in the market place rather than having the government give the permits and have the inspections and set them up. So I think that process is wrong.
News Anchor: I guess people are concerned if you do that with the oil industry, you could do it across the board. And that hits the broader issue of court reform and whether we’re too sue-happy of a country and companies would be so busy worrying about losses if they don’t go ahead and do needed investments. How far do I take your argument of getting rid of the liability cap on oil companies?
Ron Paul: Well, people should be liable for the harm they cause. The question is who is going to pay? The people who were responsible, or the taxpayer who wasn’t responsible? So those are terrible choices. I would say it would easy to say, “Well, the people who were responsible, the oil companies should pay.” Because I think it’s terrible to limit their liability and dump it on the tax payers. That doesn’t make any sense to me.
News Anchor: Would you support big changes in our energy policy now, I guess, permanently and as quickly as possible – deepwater drilling?
Ron Paul: No, I wouldn’t want to end it. I would make it stricter so that they would have to promise to protect anybody that was involved or exposed, like the fishermen on the shorelines. Rather than having the government give them contracts, they would have to have an agreement with the people who might get hurt. So we would change the conditions. But, you know, how many thousands, like 30,000 wells have been drilled out there?
News Anchor: Yeah.
Ron Paul: I mean, it’s a horrible accident, but it’s an accident. Do you think BP likes this kind of stuff? It’s not like they committed a criminal act, it’s the fact that there was an accident and yet I think it was the conditions of dependency on government and the government being the lender and the protector and the investigator of the last resort that brings on problems like this.
News Anchor: One final question before we go. Yesterday the Washington Post had done a story about how you invested in gold-related names. And they’ve given, as an example, how people in Congress could have conflicts in interest investing in what they’re regulating or voting on. Certainly it would seem that way in the case of a defense contract; for example, congressmen investing in a company that’s up for defense contract. In your case it really did seem different. You’re simply putting your money where your mouth is. And Jim Cramer just had a question for us. He says he thinks you should stay away from gold stocks and just buy the bullion via the GLD. Would you take his advice?
Ron Paul: Well, I’m not going to take his advice, but it’s not the worst advice in the world. You know, this idea that this may be a conflict of interest is sort of like if I owned a newspaper, and I defended the first amendment, it was a conflict of interest to defend the first amendment because it protected my right to publish a newspaper. No, I think that you can go one step further if you want to be real conservative. Go one step further, don’t just buy the GLD, but buy the coins themselves; they’re legal tender. Isn’t it ironic they suggest a conflict of interest by me buying something the government makes legal tender, gold coins … They say, “Oh, what’s he doing wrong? He’s buying this” only to make the point that if they ever had sound money and balanced the budget, the dollar would be fixed to gold. There would be no incentive to invest or speculate in gold.
News Anchor: One final question to you on that point of conflicts of interests, though. Do you think it’s fair – you know, you’ve been part of writing the Financial Reform Bill – that you, as someone who’s been part of that legislation, would have the right to buy, say, shares of Goldman Sachs and then go in and fight tooth and nail and fight regulation on Goldman Sachs. Shouldn’t it be that if you’re on a committee that regulates an industry, you shouldn’t be allowed to buy individual companies in that industry?
Ron Paul: Well, the whole problem is that we’re involved in so much. It’s because government is so big and they regulate, there are so many conflicts. But if you add men and woman of character that wouldn’t do anything for their special interest by writing regulations that might benefit them, then you wouldn’t have this problem. But the biggest problem is that the government is so involved in the economy. But the most important thing that is all that is out in the open. If I’m going to write favorable regulations for Goldman Sachs and I own Goldman Sachs stock, it should be well known. And that gets pretty shady there on the proper role of ethics in that situation.
News Anchor: Alright, Congressman Paul, thanks so much. Good to see you again, sir.
Ron Paul: Thank you.