Ron Paul talks with Lew Rockwell about gold’s verdict on the dollar, how government helped bring on the oil spill, the Fed’s machinations and the attempt to audit it, and the rotten foundations of the world financial system. Yet amidst bad news, millions of young people are studying Austrian economics and libertarianism. They know the crimes of the Fed, and why we need reform. In any event, reform is coming, as the shaky greenback and world dollar system go down. Meanwhile, independent voters want Ron for president against Obama and other Republicans. GOP primary voters are a different matter.
Show: The Lew Rockwell Show
Host: Lew Rockwell
Lew Rockwell: What an honor this morning to have as your guest Dr. Ron Paul. Congressman Paul is, of course, the leader of the freedom movement. He’s the great exponent of sound money, of free markets, of international peace, and has been for decades. If there were a modern Demosthenes searching with his lantern in Washington for one honest man, you’d actually find him. And that would be Ron Paul, author of many books, most recently, “End the Fed”. Ron, thanks so much for coming on the show, and I want to talk to you today about something that everybody is interested in: what the heck are these creeps in Washington doing to the audit of the Fed?
Ron Paul: You know, it’s amazing. I think it was Thursday morning when there were two headlines. One said, “The Audit Bill was defeated. Ron Paul’s audit bill was defeated.” And another headline said, “The Senate accepts the Audit Bill”. But the truth is we’re making slight headway, but I would say the greatest headway is with the American people becoming aware of the fact that the Federal Reserve is very, very important, not only in causing our troubles, but compounding our problems. And they do it in secrecy, and that’s where we have the great victory.
We have had token victories, I think, coming out of the conference committee, and some change in law at least on the surface, that the Fed would be required to do this and that and give us more information. But the fact that the Fed has accepted this language, which was literally written by the Fed … I understand the Fed has a lot of influence with the committee people on the majority side of the House. So that’s where this stuff gets written. So you know if the Fed has agreed to it, you can’t expect an audit. This will not provide for an audit when I think it will finally pass. But if we got everything they say we can get, we would get more information, we would get the names of the companies that got the money and got the bailout. But it exempted the foreign transactions and the delays were very long. Barney put in the bill, that he called the compromise, that some of the material would be delayed for 3 years. And there are some loopholes of getting around there. You know, these lending facilities that they set up where they literally transact in hundreds of billions, if not trillions, of dollars worth of activity, probably when it is going to get passed, they don’t have to give us any information until those facilities are closed or they don’t have a transaction for a year. So they could spend a trillion dollars and the next year just have one little transaction so they wouldn’t have any obligation to close it.
And I think there is a lot of room for mischief. But I think what we have to do is make the most use of what we have, and actually the very best thing coming of this is probably a new generation of individuals now looking and studying and thanks to the work of the Mises Institute, they have a place to go. And you might even comment on it, but my guess is that maybe Murray Rothbard might be more popular around this country than it has ever been before.
Lew Rockwell: Well, that’s true, and it’s the same with Mises and Hazlitt and all the other great economics who wrote about the money issue. And, of course, it was the money issue that inspired you to run for Congress originally. You’ve been concerned about this. All the things that you’ve talked about, of course, coming true. But for the first time, ever since you ran for president, we absolutely have millions of young people, and not only in this country, who know that the Federal Reserve is ripping them off, therefore, they are interested in it. And that has an affect even in Washington; that there is absolutely a tidal wave of interest in what the Fed is doing to us. They are finagling in Europe, that you keep pointing out about and of course, they want to keep it secret. So it’s wonderful.
Ron Paul: The audit business does look backwards, that is very important. But ultimately, you know, the collapse of the system; that’s what we’re witnessing right now. The financial system is very, very, shaky and the dollar system is very, very shaky. But it is continuously being devalued against gold, and gold is the ultimate measurement of all the currencies. Maybe someday it will change, but it hasn’t changed in 6000 years, so I still think it’s the best measurement of the dollar’s or any currency’s value. But I think we will soon be talking about, “Okay, you guys are against the Fed, you want the Fed audited, the Fed causes this and that”. But I think now we need to really concentrate on, “What do we do, how do we go from where we are, can’t we have a gradual transition, do we have to wait until total runaway inflation? And I’ve always been interested in trying to devise the system or, you know, at least a system that you could transfer into gradually. And that’s why I sort of like the Hayekian idea of competing currencies. But that’s a major step: legalizing freedom of choice in anything, let alone in currencies, because notoriously, over the many centuries, governments want absolute control of the money.
Lew Rockwell: You know Ron, even on a practical basis, you’re so right to concentrate on this, because a gold standard or let alone private gold money, requires some explanation, it requires some reading, and it requires some knowledge, and people are more and more interested in these topics. But I find that if you say to somebody, “Why shouldn’t competition be legalized in currencies?” they think, “Well gee, that’s right”. I mean, it just immediately seems to the average person like the right thing to do.
Ron Paul: It’s not threatening either. Let’s say we want private post offices. You don’t have to close post offices down tomorrow, besides it does have some legal authority to it. But just legalize competition in delivery of first-class mail, and let the chips fall where they may. We could do that… as long as we always have a loophole, we can survive. And that’s why we work so hard on that mandate, eliminating the mandate on medical care. To eliminate the mandate forcing everybody into it, and maybe still permitting you to get out of the system.
Same way with education; it’s when they come down heavy on us and say you can’t even educate your kids at home or have private schools, then that’s it. And that’s why if we could just get these loopholes open, I think the opposition (those who are in charge now) will self-destruct. And they’re on the verge of it. We don’t have to eliminate the Fed overnight because they’re going to eliminate they’re authority anyway because they’re policies are not workable. And I think that’s why so many people are very much aware of what’s happening today, because they can see the failure not only in the monetary system, but the welfare state and the warfare state, too.
Lew Rockwell: You know, I’m always struck by how towards the end of the Hitler regime, there was just vast infighting among all the various sub-officials as to who was going to have the power even though they had to know that they were talking about mere months away before they were all going to be killed. Yet they’re there struggling with bitter-bitter hate over this power. So here’s the Fed getting even more power over the banks, actually not over the banks, to empower the banks in this new regulatory scheme. Yet the economy is being hollowed out at the same time. We have not only this vast warfare sate, which is entirely anti-productive, we have the government taking over more and more of the economy. The system has got a natural end-date to it, doesn’t it?
Ron Paul: Yeah, and I think they’re getting a little bit worried about it, because I think the attacks on those of us who try to argue the case for sound money – you’re hearing it more in the establishment, “these guys are crazy”, they have to discredit us and say that this is foolishness. But I do think truth wins out; we can get beat up along the way, or for a long time, but I just really believe in the end they will fail, which will make our ideas look even more popular.
Lew Rockwell: Ron, I noticed they’re even bringing back to the old Bank for International Settlements involving some of these bailouts in Europe and, of course, we have what’s happened with the euro, Greece, Spain, Italy, Ireland, all the rest of these debt maniacs. What do you see happening there? Is that also part and parcel of why the gold prices going up in terms of the euro, too?
Ron Paul: Oh, I think so. I think people realize that everybody is insolvent. And I guess you may have seen, just recently they said that people who actually wanted to buy a gold ounce in Greece, they had to pay 1,700 dollars in U.S. dollars. So that’s where the real crisis is. I think people are frightened, and they’re still clinging to the hope that the dollar will rescue everybody. And it’s the dollar and the Treasury bill where people are still parking a lot of money, but less so. And that’s why they are now moving into real money, which is gold. As we speak it’s at record highs right now. But it isn’t the price of gold that counts, it is the confidence in the currency which is being diminished. And all these bankruptcies, we get all this with the Fed and the Congress bailing out the system a couple of years ago. But all they did was transfer the debt to somebody else, like the American tax payer.
It cannot be sustained. The cities are broke, the states are broke, countries are broke, and the U.S. government is broke. And every single day more and more people become aware of this. So I still think it’s a small number of people who are aware of this, or the panic would be just horrendous. But that’s when a significant number recognizes this, then there is a panic out of the currency. The end stages of a currency go rather rapidly. You wonder why common sense tells us that it’s nothing, the dollar is worth nothing, it’s just a piece of paper. But the confidence is still there. But when the confidence is misplaced, then you can expect a calamity and I think we’re fast approaching that.
Lew Rockwell: Ron, you’ve always been interested in the whole question of moral hazard and although very few people are talking about this, except you, the first Bush administration put a 75 million dollar liability lid on any accidents in the Gulf from deep drilling. I noticed our media is not exactly investigating who did that, who promoted it, and so forth. But that on the margin, of course, leads people to be less careful and so as a result we got this oil spill.
Ron Paul Yeah, it’s sort of insurance policy. They say, “Oh, okay. Let’s take a little bit more risk”. And for an oil companies 75 million isn’t all that bad. I think they just subconsciously … they probably don’t say, “Oh, I can do this and an explosion won’t be a big deal”. I don’t think they’re that callous. But they do get, subconsciously at least, less concerned because they have that insurance there. Just the same way you take flood insurance on our coast, that’s a big issue that has been in my district for a long time and it’s coming up again right now because it needs to be funded. But you know, they give this insurance and it’s delusional. They say, “Oh, okay, the government will take care of us. So what do we do?” They build right up on the beaches and all, and then the floods come and then the government says, “Oh, we don’t want you building there anymore unless you tell me”. So you lose control over your land.
So it is a moral hazard, too, in the broad sense of the term, that you do things differently and you sacrifice too much you, you’re deceived into believing somebody. My biggest beef about the moral hazard and this insurance that government provides, is that it’s no longer insurance. I get so disturbed by them calling this government insurance. It’s not insurance. I mean, medical insurance? When you get paid to go to the emergency room for an aspirin or a headache or something? That’s not insurance, that’s prepaid medical care. And it’s not measuring risk and there is insurance in medicine, and that is if you get hurt in a car accident or you need surgery, you trust companies to measure that. But to call the first dollar spent in medical care as insurance is so deceptive and it’s a political ploy. You know, “all we’re doing is making sure poor people can have insurance” and then they wonder why prices go up.
Lew Rockwell: This misuse of the term insurance, insurance as a wonderful market, a necessary market development, was by Otto Von Bismarck, the rotten welfare/warfare statist in Germany, then picked up by Franklin Roosevelt for Social Security, and then of course, later on for Medicare and Medicaid, and now the Obama plan, and for this flood insurance. And, as you said, none of it actually is insurance. It’s just the government stealing a word from the market to cover up a redistribution spending program.
Ron Paul: Yeah, and then the insurance companies participate in it; they’re selling these policies. They’re the middleman and they’re not even measuring risk. They don’t have to do that anymore, they just are the middleman and customers have to go there, so it’s a form of fascism is what it is. Somebody once took me to task for not calling Obama a socialist. He might be every bit of a national socialist or something, but he really is a corporatist, which many believe corporatism if not held in check will roll into a fascist type system. But it’s a partnership between government and big corporations. And if you look at this administration, they’re every bit as bad as the previous administration. They take care of the big corporations. Look at the military-industrial complex and these guy. You know, they play games with each other. It just goes on and on, but the bankruptcy will finally change all that.
Lew Rockwell: I’m sure you are shocked the other day to find out that there were a lot of very valuable mineral resources in Afghanistan.
Ron Paul: Oh yeah, when I saw that, I said, “Oh, I cannot believe this.” And you think they didn’t know about it. We always knew about the plan and the desire to use it for a route for a gas pipeline through Afghanistan. But I wonder if that could explain the reason why they dropped going after Osama Bin Laden once he left Afghanistan. Theoretically they were supposed to go capture him. But that became irrelevant. The next thing became occupation and control and how do we pick the next president of Afghanistan and on and on. So minerals in Afghanistan and oil in Iraq, I guess.
Lew Rockwell: I remember when George W. Bush said the truth by mistake when he said it really didn’t matter whether Osama Bin Laden was captured or not. Because, of course, that’s not why they were there.
Ron Paul: Well, I think somebody in a sarcastic manner said that they probably made a deal. Bush needs him, and he needs Bush. As long as Bush is there doing these things and invading these countries, that’s a good recruitment tool. And as long as Bush has Osama Bin Laden out there, he can rally the American people to do anything, give up all their liberties to fight the global war on terrorism, because “we got to go after this guy.”
Lew Rockwell: Ron, one last question. I noticed a very interesting poll a couple of days ago showing that independents wanted you to run for president. And I noticed a poll happened just maybe a couple of weeks before that, it showed you were running almost neck and neck with Obama. And, of course, the independent thing showed that you were overwhelmingly the choice of independent voters; that Romney and Palin and Pawlenty and the rest of the neocon midgets were all very far behind. So I know that this is maybe a little soon to even be mentioning this, but do you find this interesting?
Ron Paul: Well, I do. And it really doesn’t surprise me, nor does it surprise me that any of the Republican primary type voters are less exited about me than some of the others, because I am challenging them and they’re annoyed, especially if I can take the positions that we hold in the freedom movement and say, you know, the Republican party has in the past, and even now will get lip service to this, but they don’t do it. So I think that’s a little bit of an embarrassment. But no, the independents, sounds like they’re a very important block of voters these days, because they’re growing by leaps and bounds. States where you can register as an independent, those numbers are growing. I think in many ways it makes me feel good about it that our freedom ideas are very appealing to them. That means they’re looking for something different than the status quo of the Republicans and the Democrats.
Lew Rockwell: Ron Paul, thanks for all you have done, you’re doing, and you’re going to do for the freedom movement and it’s great to have you on the show, as always, and an honor.
Ron Paul: Thank you, Lew.