David Asman: And from Texas we welcome Representative Ron Paul, a frequent and a very appreciated guest at Score Board. Good to see you, Doctor, thanks for coming in.
Ron Paul: Thank you, David.
David Asman: Well, you know, first of all … we’re going to get to the Fed, I know our audience wants to hear about it and you want to talk about it … but I’ve got to congratulate you on Rand Paul. Your son just blew away the competition last night. Any advice? Did you call him up to offer any?
Ron Paul: Well, he called shortly afterward. He called awfully early and he was awfully surprised that it was so early. He didn’t have his shirt and tie on yet! Yeah, we talked a little bit, and we’re talking about what we might do. One thing he’d like to do is have a joint party on our swearing in day, which would be beneficial or very nice for both of us.
David Asman: That’s kind of nice, but beyond the parties, any specific advice on how he should govern?
Ron Paul: Well, yes. I suggested to him we have at least one specific bill that we introduce on the first day that both of us are there. And he says, “How about End the Fed?” So “End the Fed” or “Audit the Fed”, we’ll do something with monetary policy on our first day to make a point.
David Asman: Very seamlessly you make a Segway towards the next subject, which is the main subject of the day: what the Fed did today. You know, as important as these elections were – and don’t get me wrong, I think they were the most important thing that happened today – but seriously, what the Fed is doing scares the heck out of me, Doctor. I don’t know about you, and actually I do know about you; it scares you as well. But isn’t the Fed just monetizing this debt that’s being built up by politicians?
Ron Paul: Absolutely. And they continue to do it. But it’s not only the debt they buy, but when they grant loans to banks and have the banks buy debt, that’s monetizing debt, too. So the balance sheet of the Fed isn’t the only thing to look to find out how much debt is being monetized. So yes, it is. You said, “Enough is enough.” I say, “Enough is too much.” They’re doing too much of this for so long.
David Asman: We’ve seen it before, not just in the Weimar Republic where we saw super inflation, but also in the United States, when we saw in the 1960s and 1970s the “Guns and Butter” policy that a very compliant Federal Reserve, very much like Mr. Bernanke, kept buying up this government debt and it eventually led to very high inflation and it took us years to get over.
Ron Paul: Well, they get to be too arrogant for themselves. They think they can manage, they think they can endlessly print the money and create the credit and also that they can modify the prices going up. But you know what they don’t understand is that inflation – the increase in the supply of money and credit – is the disease. It causes the malinvestment and causes a pyramid of debt. And sometimes, or at least eventually, it will push up prices. They claim that they can inflate and yet if they don’t see prices rising, they’re free to do as much as they want. I think that’s an absolute fallacy because prices are unpredictable. There’s a subjective value in pricing. And they figure that they can control this. So the whole program is so fallacious. It’s completely wrong.
David Asman: They think that they can ease us into inflation and, of course, inflation is the best way for the government to steal money from the public, because it makes it much cheaper for them to pay off their debts. We get this bracket creep where people have to have higher wages in order to keep up with inflation. So it pushes them into higher tax brackets, so the government gets more money that way. It’s an insidious process. Well, let’s link what the Fed is doing to what happened with the election. Is there anything that you and your son, Rand Paul, and all the new Tea Party types, can do to rein in the Fed?
Ron Paul: Not under current conditions. You saw what happened when we tried to audit the Fed last year. They were strong enough to silence us in the conference and in the Senate and they’ll continue to do that.
David Asman: Hold on a second before you go further. How precisely did they silence you? I know you’re a hard man to silence.
Ron Paul: Well, we got it passed in the House, you know, I even got it on that disastrous bill. But I was willing to at least put it on that bill. But when it went to conference, the conference rejected it. So they had a lot of influence. They worked very, very closely with the Senate and the different people involved and they worked with the House too, some of the members, but they didn’t win in the House. But when it went to the conference, they were able to get it removed. And even if it had been passed, they’re not going to respond to it, just like they don’t respond to the Freedom of Information Act. So they’re very, very powerful, and they’re very independent. What really bugs me about this, though, is this is all of the books. You say, “What can we do in the Congress?” We’re actually irrelevant when it comes to … the Fed today decides, “Well, we’ll spend another trillion dollars to central economic plan”. They don’t have a right to do that, it’s morally wrong, it’s unconstitutional, and it’s economically disastrous. And the people are just starting to wake up, but they are waking up. And I think they’re going to hear from us here in the next couple of years more so than ever.
David Asman: Forgive me, Doctor, but it might even be before a couple of years. Your Republican colleague from Texas, Randy Neugebauer, apparently wants to hold hearings, wants to have you as the part of it, too, with the financial services committee. I understand that besides the hearings, in order to try to reign in the Fed, you were going to be on a new sub-committee on monetary policy. So it looks like the wheels are starting to turn on this.
Ron Paul: Yea, it isn’t a new committee, and it’s been quite a few years I’ve been bumped around and I didn’t get the committee when we were in charge before. But right now, I do believe that I will have the chairmanship of the sub-committee on domestic monetary policy. And that will give me a lot of ability to do more of what I have been doing. So that, and with the help of others, and with the sentiment around the country – see, the sentiment in the country had to be strong to get 320 co-sponsors of that bill.
David Asman: By the way, would you have the power of sepino? Would you be able to do what Fox Business has not been able to do, which is to break that information barrier of the Fed?
Ron Paul: You do have the power of subpoena, whether we get that far or not, I don’t know. I personally only believe in the power of subpoena for Federal officials and the Federal Reserve and people like this. I don’t like to see the Congress subpoenaing and bringing in private companies. I have a little reservation on that. But when it comes to the executive branch and the Federal Reserve, we should insist. So far, I think, in the past they have responded. They do come in and they have all their answers lined up. But I think there’s going to be a very, very serious effort because the attitude in the country has changed, the Congress is changing, we have the Banking Committee, and Randy Neugebauer is willing to help. So I’m optimistic that we’re going to hear a lot more about how the Fed operates. And, to me, that is what is important. I always assume that if you can get the Fed and show the people what’s happening, then we will talk about monetary reform. But, to me, it’s getting rid of this cartel, this secret cartel. It isn’t even nine people, I mean, it’s 1 person. They’re dictators and they’re economic planners and they’ve being doing it for decades.
David Asman: Particularly when they’re operating in tandem with the Treasury Department, which is essentially what’s happening as they monetize the debt of these free spenders. Doctor, stay with us because I want to bring in somebody who I know, you know and respect. A Fox News senior judicial analyst and Freedom Watch host, Judge Andrew Napolitano.
David Asman: Great to see you.
Judge Napolitano: Great to see you, too.
David Asman: Now, you share Ron Paul’s lack of enthusiasm for subpoenaing members of the Fed in order to get them to reveal stuff …
Ron Paul: No, no, no, I’m sorry. I would subpoena the Fed, not private companies.
David Asman: Oh, I see. Okay.
Ron Paul: The Fed and the executive, I’m sorry I didn’t make that clear.
Judge Napolitano: First of all, Congressman Paul, congratulations on your own reelection and on the triumph of your son, the Senator. I guess he sort of out ranks you now that he’s a Senator.
David Asman: Seniority wins in this case.
Judge Napolitano: I agree with everything Congressman Paul has said. I, too, have antipathy towards subpoenaing, for example, a baseball player and having him testify about the contents of his urine.
David Asman: Which they have done.
Judge Napolitano: Which, of course, they have done. I would not only advise the congressman to subpoena Ben Bernanke, I would advise him to serve what’s called a “subpoena deus tecum”, which is a fancy phrase for “and you shall bring with you the following”. And in that list of “the following” would be their checkbook, their ledger book, all of their files and records. They’ll refuse and then the House will present the subpoena to a Federal Judge who, hopefully, will enforce…
David Asman: Alright, here’s the thing, and Judge, I’ll go to you first on this. The Fed still describes itself as a private institution, even though what it does affects the money in all of our pockets. Whenever they print billions or trillions of dollars, it affects us. Hold on a second. What Randy Neugebauer wants to do, and what Ron Paul wants to do along with him, is to come up with some kind of legislation to force them to be accountable every time they print money. That is, they won’t have a free ticket to run those printing presses and devaluing the currency in our pocket. Does the Congress have that power?
Judge Napolitano: Well, the answer is yes. But this president would not sign such legislation. In fact, no president – unless the president were Ron Paul or Rand Paul or someone who truly understands the monster the Fed has become – would sign that legislation. But the subpoena power can be perfected without the involvement of the president with simply the use of a Federal judge to enforce it.
David Asman: But, Dr. Paul, we need more than information. We need to stop these guys from devaluing our currency, don’t we?
Ron Paul: Yeah, absolutely. But I think the information is going to get the attention of a lot more people. No, I agree with you absolutely; it’s a race because I think they’re going to self-destruct, they’re going to destroy the money at the rate that they’re going and at the rate that the Congress is reigning them in. But we have the authority, even though they call themselves private and people assume they’re private, they’re secret. It’s been created by government, it was created by the Federal Reserve Act, and we could, in one day, repeal the Federal Reserve Act. You know, that’s all we need to do – that would do it. I consider that a little more disruptive than what I want, but I still think that’s the ultimate goal.
David Asman: Okay, I know Judge wants it, but let me just ask one more question, do another round. Dr. Paul, you did have a lot of support in trying to get information out of the Fed, I think you had 200 members of Congress going along with you. With this new Congress that’s come in, aren’t you more likely to actually achieve the goal of reigning in the Fed? And might we live within the next couple of years to the point where we do see the Fed unable to continue to devalue our currency?
Ron Paul: Well, actually we had 320 co-sponsors, so we had a large number, well over the 218 that we needed. No, I think it’s going to be easier, I’m going to bring it up immediately. It will be brought up constantly in the sub-committee that I will be chairing. And yes, we’re going to get more support. We still have to think about the Senate, but I understand we’ve improved the Senate a little bit on this election, so I think we’ll get more support over there as well.
David Asman: Judge, is it going to happen in our lifetime?
Judge Napolitano: I don’t think it’s going to happen unless they have the votes to override the veto of the president. That’s where the subpoena power will work. But look, we’re on the same side here, we both want the public to know what’s going on. And I fully agree with Congressman Paul. A simple audit, a simple awareness on the part of the public of what the Fed has been doing, would be such a catastrophe to the Fed’s power. It would stop it in its tracts.
David Asman: What an eye-opener that would be! Dr. Paul, thank you very much for coming and, again, congratulations on the victory of your son and, as the judge points out, on your re-election as well. Judge, good to see you. Now if you missed any of our Ron Paul interviews or other highlights from the show, you can watch it online. Log on to www.FoxBusiness.com/scoreboard.