Ron Paul addressed the Texas Southern University Thurgood Marshall School of Law Government Law Society on returning to the Constitution, restraining government at home and abroad, and the need to embrace liberty to create a free society and bring about real change.
Ron Paul: Thank you professor, thank you very much for that nice introduction and, thank you very much for the invitation here to come to the Thurgood Marshal Law School, this to me is a real honor and a challenge to talk about our difficult issues that we face today and it’s an exciting political year, a lot of people have been paying attention to politics this year, so it’s nice to come and visit, matter of fact, I have a hard time turning down invitations that I get to a college campus. Because I don’t know if anybody noticed in the last go around in the presidential race that we did generate a lot of enthusiasm with young people.
And that to me gave me a lot of hope because if I’m on the right track, if I’m really trying to get people to go in a certain direction, if it is the right thing to do, I mean you have to have the young people, if the next generation grows up and they still think “well let’s do it like it’s been done for the last 50 years.” And I think that’s been happening, there’s always been some who have been disgruntled and there’s always a dissent, and if you come from a conservative view you might say “well we heard about that with Goldwater then we heard about it with Reagan and then we heard about 1994 and then in 2000” and…
But this year is something different, I think there’s much more disenchantment, and it isn’t so much that people have given up on accepting the ideas that the government should be doing all these things that we should run a welfare state, cradle to grave, and that we should be the policeman of the world. It isn’t so much that they have come to that conclusion, a lot of us have, I mean I’ve argued the case that we ought to follow the Constitution and if you do the government is very limited. And I think what has happened though this year, and it’s been going on for a couple of years and I think I more or less tapped into that and it’s been going on in the last 2 or 3 years, is the recognition that the current economic system is not viable, it’s not working very well, matter of fact it’s not working hardly at all and not too many people are saying “very soon, it’s going to be much better.”
No, they were criticizing our president today because the most he could offer is “if we hadn’t done this, it could have been a lot worse” and he may be indicating that things could be a lot worse, but politically they were arguing with the president, they said “no, you’re not supposed to say that, it could be worse, that doesn’t make anybody feel better.” So it is different now than I think ever before because I think the people who have argued that we shouldn’t be doing it and our fiscal conservatives didn’t want it, like people who are on the receiving end.
The people will say “well, my check has to come and I’m dependent on it and I get my medical care, I get my education and all” that they get a little worried, what’s going to happen, this was announced today for the second time in a row that Social Security beneficiaries aren’t going to get an increase.
And the argument goes that “oh, there’s no inflation.” Well, if you’ve been around and paying any attention, there is a lot of inflation out there and you got to look at the commodity prices and a few other things, repair bills, doctor bills, education bills, there’s a lot of price inflation going on. And one thing that hasn’t happened yet has been that the huge amount of money created here since the crisis here in the year 2000 hasn’t even gone into the economy.
What’s happened is that we are experiencing the old saying about they’re pushing on a string. They’re trying to push all that credit into the economy and that’s supposed to make everybody happy, everybody spend money, spending money is going to cause investments and it’s a fallacy that Cain’s have promoted, deficit financing and spending and printing money solves all problems. And the reason people believe that is on the short run in the early stages of a huge financial bubble. And every time it would leak, which it has been doing injection of money and spending seems to help even though the bubble just gets bigger. And this has been going on literally since the 1970s, I got fascinated with Austrian premarket economics in the 1960s and the 1970s and when Nixon came along and said that “oh we’re in trouble.”
It was the initial stages of our bankruptcy because we no longer could honor our commitment to back our dollar with gold. We had had 700 million ounces of gold and gave away approximately 500 million ounces of gold, that’s $35 an ounce. Even though we had printed and flooded the world with dollars, everybody knew the dollar price of gold was much higher, but we had made the promise and would look bad and nobody likes to admit bankruptcy, so 500 out of 700 we made our commitment and gave the gold away until finally Nixon realized that we can’t continue to do it. He closed the gold [window] and said “we’re going to hang on to our 262 million ounces of gold, put on wage and price controls, put on tariffs and all these things” and 1970s were a bad year.
We had a lot of price inflation, we had that thing called stagflation, the economy very very weak and prices kept going up. And most people believe that prices go up when you have a good economy, everybody is buying and selling and stimulating. But that’s not true, you can have depressions, think of the third world nations, think of Zimbabwe, I mean was it a thriving economy and prices were high where the value of the money was going down, so the prices were still going up regardless. So we have a long way to go but I think we’ve got here because we have failed to follow some of the basic premises that our country was founded on.
And I want to talk a little bit about that, because it’s structural, I don’t like to identify with those who will tinker with the budget, tinker here and tinker there and move troops and move troops there, I think it’s very structural, very philosophic, very fundamental and our guideline was supposed to have been the Constitution. Every member of Congress takes the same oath of office and I’m considered and even those who disagree with me never ridicule me for being a strict constitutionalist that’s “oh yeah he is a very strict constitutionalist and he’s a principled person.” But at the same time, most, the rest are voting for all these things one way or the other. I believe what our founders had discovered was the understanding about what rights are.
And I believe and Jefferson was very clear in the declaration of independence said that “liberty means that we have a natural right to our life.” That’s what it means to me, we have a natural right, a God given right to our life and the government’s purpose is to protect that liberty. And not much more it’s when you get off on tangents that we get in the trouble and we’ve never had a system, probably America had the best system of emphasizing personal liberty than any other system. And there is a lot of prosperity and a lot of wealth and yeah in the last hundred years I would say that we have rejected the principles yet we have stayed on the surface wealthy, consuming the wealth that we had created, but at the same time we were burning a lot of money.
And you can appear to be wealthy if your banker keeps loaning you 10, 20, $30,000 a month, you can look very wealthy. But eventually you have to pay the bill. So in the last hundred years but especially 50 years and especially since 1970s when the Breton Woods broke down, things had been based on trust in a currency that had no value plus the borrowing of money. But the principles of liberty I think have been long time forgotten and not applied very well. We’ve lost confidence that the country could operate. We don’t really trust freedom, we think “oh yes, that sounds like a good idea and I’m for it, except how would this be done and how would this be done, and this wouldn’t be happen.” If you didn’t have government in education, there’ll be no education.
If you didn’t have government in medical care, there’d be no medical care, if you didn’t have our government policing the world, there’s be constant fighting and killing. Well… and then if we end up with a financial crisis where the checks bounce, the social security checks bounce and medical care keeps going down in quality then you say “well, even this idea, even if it’s based on good intentions, it really hasn’t solved our problems and we have to adjust that.” But this principle of liberty I can apply it in several areas and I know later on we’ll have some questions and we can clarify anything but I think the most important thing to me is the principle.
The principle that we have a right to our life and we should have a right to the fruits of our labor, but that doesn’t work unless you accept the notion that nobody can use force, nobody can initiate force against another person, and that means individuals can’t do it and governments can’t do it. So if Bastiat write this neat little book in the 19th century called ‘The Law’ and I think all lastly and started to read ‘The Law’ by Bastiat, because in his simple premise was, if you as an individual can’t do it, why should the government be able to do it? When that applies to what I talk about so much is we know that any of us in the room are not allowed to counterfeit our money right?
What happens? You go to jail pretty quickly, they watch that. But what does the Federal Reserve do? They are a monopoly of counterfeiting our money and look at the mess we’re in. So if we’re not allowed to counterfeit money government shouldn’t be allowed to counterfeit money, but we could as our Constitution grants us the authority to make sure our money is honest, honest weights and measures, that’s been around a long time, that’s biblical, that you shouldn’t cheat people, you should have honest scales and you should have honesty in money.
So this is to me the real challenge is what are we going to do and how are we going to go from the situation we have now to improve it. And I don’t think we can do it unless we have this understanding of what liberty is and that you have to reject force, you can’t force people what to do. Now some people argue, well you should have a little bit of force because there’s always people who are going to fall through the crack and therefore a little force to transfer wealth and get in a wealth transfer business that is necessary. And then some others will say “well, we can’t trust people with making their own decisions.” I had one Congressman tell me when I challenged him on a vote he was taking. I said “why don’t you just let the people make these decision?”
And it was just a casual conversation sitting on the floor, he says “the people are too stupid” he felt like he had to take care of the people and the world and I foresee in the free society is far from perfect, the one I see right now is much further from perfect. But this whole idea that governments can do this, either economically or individually, this assumes that the government, if they can tell you about economics and redistribute wealth and economic planning and print the money and all these things, then there is another group will say “well, I don’t like what, the way the people do it, they spend their money on gambling, they sit around and they waste their time and they don’t read the right books and they put stuff in their mouth and in their lungs and in their bodies that they shouldn’t be doing and it’s only government as wise protectors in Washington can tell you what to do.”
And I’ve just taken the position that we don’t need government for that, a lot of people say “oh, that” a lot of people who argue about sort of getting rid of some of those laws what they argue is “oh, you’re endorsing what they do.” Let’s say you were in California and they’re getting ready to vote on this marijuana law which is irrelevant since, almost half the people out there smoke marijuana anyway. So they come along and they say, we need to tell people what to do, but we generally accept the idea that our soul, our religious values, the government is not supposed to mess with and that’s a pretty important function. Might be the most important function of our life, and then we don’t interfere with what we put into our minds, we are pretty lenient on teaching and our universities have all kinds of challenging ideas, religion and what we put into our minds.
And I just think that what we put in our mouths and put in our hearts and, the whole thing should be up to the individual. But that doesn’t work either if individuals are totally irresponsible or if they think that “well okay, I strayed, I smoke too much, I got lung cancer, I’m sick” therefore the people who took care of themselves, “you’re responsible to take care of me.” See I don’t quite buy that, that does not mean that I’m not a humanitarian and not mean that I don’t have the compassion that drove me into medicine, because I think that’s very important. But voluntary compassion is a lot different than compulsory compassion by the government.
So if we had a free society, and people could force their neighbor to take care of them because of their bad habits, maybe they gambled too much or didn’t work hard enough. I mean the next person shouldn’t be forced to take of them. But you say we’ll there still going to be a lot of problems, people are going to be sick and they lose their jobs and people incapable. And I think that is true, but a truly compassionate society, so a true compassion would have people that would a moral society and compassionate society but a lot of people don’t have the belief that that could possibly work. And yet when it has been tried, generally it has worked, imperfectly, but what I fear so much is when we shift over once we grant the principle and saying that “well, we need government for 10% of the people.”
Well, if you say that, why don’t we have it for 11% of the people? Or 12% of the people? And then there becomes a dependency and before you know it the cost of it is outrunning the amount of money that we have, and that’s where we are today. We can’t sustain this, so whether it’s trying to take care of people economically or trying to instruct them, how to run their personal lives or embarking on what we have done now since World War 2 is inheriting an empire and building on it. We inherited the British Empire, took it over, after the British went bankrupt, after 2 world wars set them back, and so we’ve inherited an empire but did we just inherit it for a short time? No, I mean we have really taken over, we’ve constatntly expanded, it’s all built on militarism.
And I mean, when I was in high school the North Koreans invaded South Korea, and I remember one of my teachers had been in World War 2 was drafted, and he didn’t come back home and that had a lot of effect on me on what this all means, especially as I got older and realized “that war shouldn’t have even been fought” I finally read the Constitution and it says “the Congress is supposed to declare and we went in under a U.N. resolution and we’re still over there. We lost 38,000 in there, then we enter Vietnam, we lost 60,000 no declaration of war and yet it was always to protect our interest. So we’ve done that, so just think of what’s happened since we’ve left Vietnam?
Very humiliating circumstances, we now trade with Vietnam, they have become westernized, this whole theory that the domino theory if Vietnam fell, the whole South East Asia would go communist. Well, they became westernized and they have done very well and we visit there, invest there, their president comes over here, so much more has been achieved in peace than it was achieved in war. And at the same time the Chinese, a big war going on in Washington against the Chinese, everybody has to have a battle, right now it’s all the Chinese fault because they have a trade surplus and we have a negative trade balance with them.
But maybe we spend too much money, maybe we have a currency that they’ve allowed us to print, if we’re printing gold and they’ll take our money, why wouldn’t we be spending money over there, and it’s an imbalance and it’s back to the currency thing, if we didn’t have this currency system, that wouldn’t work. But we have never given up on the militarism; we have assumed that “oh, we might need oil.” Remember the Persian Gulf War in 1990? That was for jobs and to protect our oil, and we’ve been protecting our oil ever since and we’re in so many countries over there, but what have the Chinese been doing? Working hard, saving their money, they have $2 trillion in savings in China, over a trillion of our dollars and a trillion of others.
And they just can’t be very good capitalists they’re communists. But what do they do, they’re investing around the world, they’re buying up oil interests, it looks like they’re going to be partners in a business here in Texas, “Oh, it’s the Chinese we got to stop them” well how did they get their dollars? Did we have any responsibility whatsoever? They get a lot of money because we buy stuff from them, but what do they do with the money? They invest it or they loan it back to us, they bought all these treasury bills and all these Fannie Mae and Freddie Mac, all they did was they became a participant in the bubble, the bubble was caused by our programs of insisting banks make bad loans at the same time the Fed kept creating money out of thin air and having artificially low interest rates and then China actually added on to that by buying some of that up.
But my point being is that I don’t like our militarism, China is not a militaristic country, they are not known for always spreading their borders around, historically they have had on occasion, but basically they’re not invading other countries, certainly not now. But they’re invading other countries by just spending their money, this seems to be a lot wiser move, that sounds like something America did 50, 60, 70 years ago. We were the capitalist and we had a positive trade balance and we loaned people money and we invested around the world. And we have gotten pretty fat and happy and think that this was going to last forever and it didn’t and it’s come to an end and I think it’s because we don’t have an understanding of what kind of a government we should have.
I don’t believe we should be the policeman of the world, I don’t think it’s part of the constitution, there’s no authority for it, I think it’s unwise because we make more enemies than friends and it cost us a lot of money and drives us to our bankruptcy and empires always end, they always end badly and usually not by a military defeat. Soviet system wasn’t defeated militarily, when I was drafted in the 1960s that was the height of the Cold War, and they had like 30, 40,000 warheads and missiles, I mean it was a dangerous time but we never had to fight the Soviets, the Soviets finally crumbles as Mises the great Austrian Economist predicted, he said “socialism doesn’t work, they don’t have a pricing structure,” and the whole system doesn’t work and if you have artificial money and fixed interest rates and central economic planning, it always fails and we have that.
So I actually, sincerely believe that we will have a disintegration of our system, the world wide system we cannot maintain it and when the country recognizes how severely broke we are, we’re not going to be able to take care of a lot of people at home. But I advocate stopping the spending immediately, I would say that we ought to have a balanced budget and as quickly as possible and people say “where are you going to cut?” And I say cut overseas, I mean how long do you want troops in Korea? How long do you think you have to pay to have troops in Germany? How long do you want to expand the war constantly in the Middle East? First it’s Iraq who had no weapons of mass destruction, where there was no Al Qaeda, had nothing to do with 9/11 we invade them after 9/11.
And guess what’s going on in Iraq now? They have a Shiite government that looks like the coalition is going to hold up friendly to the Iranians, before we had that guy that you can’t defend, Saddam Hussein, but he was more tolerant to Christians than the government we have over there now cause all the Christians left Iraq, Al Qaeda is back in Iraq or they never were in Iraq even with Saddam Hussein, they have come into Iraq and we have removed a balance of power between Iraq and Iran. And so now I see that all that work and effort tragically, it looks like we’ve delivered the Iraqi system to the Iranians. Because we can’t, I don’t think we have the energy, the determination, the finances to take on the Iranians and there are people in Washington that want to but we don’t need that, I mean we don’t need it for moral reasons, constitutional reasons, economic reasons, practical reasons and the sooner we wake up the better.
(to be continued)