Ron Paul: Thank you, Mr. Speaker. Mr. Speaker, in the last several weeks, there have been several articles published by officials from the Federal Reserve System. This is a little bit unusual because they’re critical of anybody who criticizes them and critical of me, in particular. They want to accomplish, in these articles, they are trying to discredit anybody who disagrees with their policies and they’re very defensive of this. They have argued the case that they should have total secrecy and in this total secrecy, I claim, they have tremendous power to do the things that they want to do.
It’s only been recent that the American people and this Congress have awakened to this. Although we did not get a full audit of the Fed last year, we did get a partial audit of the emergency funding. But still, their argument is—the Fed’s argument is—they have to have total independency while the American people believe there should be transparency. The Fed’s argument is, that they literally are the saviors of the economy—that they came in as an emergency when the markets were crashing and they were able to rescue the entire world economy by their injection of hundreds of billions, if not trillions, of dollars. The fallacy of all this is that they may have rescued some banks and they may have rescued some big businesses, but they did not rescue the American people.
The consequences of all this has been high unemployment, the people losing their houses and can’t pay their mortgages. So, their claim that they prevented deep depression—they’re claiming that they’ve prevented the depression for some very wealthy, well-connected people on Wall Street, who were making a lot of money, anyway, in the bubble period of time. And now, the people who are suffering the most are the average people who have had to suffer the consequence of the Federal Reserve policies.
This is a policy that punishes the innocent people and actually rewards the guilty people and the people who were the beneficiaries. The very people that are claiming that they have solved all our problems are the very ones who created the problems and they never once predicted the trouble that was coming. And there were numerous economists around the country, especially the Free Market Austrian economists, predicted and explained the housing bubble and it was coming and it would be a collapse. But the people at the Federal Reserve, who now are claiming that they solved all our problems, never once said that we could be in trouble. When asked they said, “No, there’s no housing bubble. Where do you get all this?”. So now, we’re supposed to believe everything they tell us. They created it. They didn’t tell us there was trouble coming and now, they’ve solved all our problems and we’re not supposed to question this and if we do, then we’re going to be on the receiving end of severe criticisms.
The conclusion of many of these articles has been that they want to deflect the concentration on the Federal Reserve. They will say, “Yes, they’re still our problems but it’s all on the Congress.”—it has nothing to do with them. They saved us from ourselves and they take care of us. They create good times and take care of us when we are in bad times. But the whole thing is, they claim that our deficits are a problem, and I agree with them on that. Deficits are a problem! But, if you think about it, why do the deficits get run up? We, as members of Congress—this whole Congress—for decades on decades run up deficits to pay for welfare programs and warfare. Endless spending! We tax the people and we can’t tax anymore. We borrow—there’s a limit in borrowing—or interest rates will go up. But guess who monetizes the debt and enables the Congress to continue the spending, it’s the Federal Reserve. So, they are the ones who literally facilitate the deficit financing. For them to turn around and say “It’s all the blame of the Congress”, they’re absolutely being disingenuous. It is the Federal Reserve and the monetary system that encourages runaway deficits, runaway spending, runaway militarism and runaway welfare-ism.
The Fed over the years has had two mandates. One is to have price stability, and full employment. Think about price stability. Did they have price stability with the NASDAQ stocks back in the year 2000 that collapsed when that bubble developed. Have they had steady prices—price stability—with medical care costs or housing costs or education costs? No, absolutely none! Today, bond prices are sky-high. We have a bond bubble going on right now and it’s the result of Federal Reserve policy but they don’t want you to think and talk about that.
And the full employment mandate, I mean, just think of it, the government—our government—labor statistics admit there’s 9.5% unemployment and then they say “Well, if you count more people who are partially unemployed, it’s 17%.” But, if you have a free market approach and count everybody who is unemployed, our unemployment rate is 23%. That’s why the American people are feeling lousy about what’s going on even though Wall Street, once again, is making money, the banks are making money. […] But it’s all because of a collision between the Federal Reserve and the banks and the large corporations while the people are still unemployed.
The Congress has a proper responsibility and it is oversight. It isn’t and was never meant for the Federal Reserve to have free reign and not have any oversight whatsoever. We have to realize this whole issue of Central Banking is not a new issue. It was here from the very beginning. Hamilton and Jefferson argued about it. Jefferson and Jackson and many others were absolutely opposed to Central Banking. So, it’s not a new issue but there is no authority in the Constitution that grants this right to have a Central Bank and to create money out of thin air just to accommodate the politicians.
We have a right and an obligation—responsibility—for oversight of the Federal Reserve. Our responsibility is to look at bad policy. The Federal Reserve is responsible for the inflation, the business cycle, the unemployment. It is up to us to do something about it and look into it. At first, to look into it and understand it because then it will be realized that we need to have more oversight. Right now there’s tremendous support. In the last Congress, we had 320 members of this House who supported an audit of the Fed so, we’re making progress here.
It annoys the Federal Reserve. There’s going to continue to be their PR campaign. It’s the first time in their history that they’ve hired a PR Agency and lobbyist to lobby for their position. So they know they are under the gun as far as people waking up and realizing that the Federal Reserve is responsible for so much havoc that we’re having in this country. And I think it’s our responsibility to continue to look at the Fed and find out how they have caused so much trouble. I yield back to balance my time.