Judge Napolitano: Tonight on the docket, the campaign to audit the Federal Reserve. Texas Republican Congressman Ron Paul, has been speaking out on the abuses of the Federal Reserve for years.
It has printed money with no value. It has bailed out foreign countries and domestic companies. It tells banks what interest rates to charge and it has devalued the dollar by 92% since its creation in 1913. But the voters have had enough with the Fed and its war on your money. That’s partly why Republicans took back the House last November and that’s why at long last, the outspoken Fed critic, Congressman Paul himself, will now head the House Financial Services Subcommittee on Domestic Monetary Policy.
In time, he will shine a light on all the games the Federal Reserve plays with your money, keeping in mind what one of the greatest defenders of liberty, Thomas Jefferson, said. “And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity [the future] on a large scale.”
I don’t think President Jefferson could have been more correct if he tried. Here now, the new night watchman of the Fed. A true champion of the Constitution, Congressman Ron Paul. Congressman, it’s a pleasure. Welcome back to Freedom Watch.
Ron Paul: Thank you. Good to be with you.
Judge Napolitano: You had a very lively day on Capitol Hill because Chairman Ben Bernanke was testifying before the House Budget Committee, while some economists were testifying before your Subcommittee on Monetary Policy. Question, is it a pipe dream that we can reign in the Fed or might we really do it, this time around?
Ron Paul: Well, I think that’s up in the air. I don’t know the answer to that. I know that we’re going to be determined to try but I also know and recognize the power of the Fed. I mean, they were able to really diminish the effort last year. We did get some information but not as much as we want. So, yes, we would be determined to do it. But the big thing is, the real evidence is going to come under very painful conditions because I don’t think we can rescue this system and get it out of the hands of Fed in time to save the calamity.
I think their policies have been so damaging over these many, many decades, that regardless, we are going to suffer from it. But that doesn’t mean that we shouldn’t try and if we don’t get exactly what we want, I think we ought to really work hard on allowing a little bit of competition with this cartel who runs the show and they’re the official counterfeiters. So that will be my attack.
Judge Napolitano: Chairman Bernanke actually told the House Budget Committee that he thinks that budget deficits are too big and budget deficits can cause problems. He is the cause! He personally is the cause! The root! The reason that some of those budget deficits are so high. Because he can give the federal government all the cash they want, whenever they want it!
Ron Paul: And that’s a bit of a moral hazard because big government conservatives and big government liberals get together and they spend money, and he takes care it. He keeps the interest rates low so we don’t get the signal that we’re draining the market of all the cash. But you know, just think of the amount he spends. He spends more money in a year than we do. He’s putting $4 trillion here in these last couple of years and it’s off the books! It’s not even on the budget so how can… Where does he get the credibility to criticize the Congress – as bad as they are?
I have the credibility to criticize the Congress because I don’t vote for any of that. But here he is, he spends more money than the Congress and he bails out foreign banks, and bails out everybody else. And then he says, “Oh, no. If Congress would have a balance budget, we wouldn’t have any problems.” I mean, it’s pure hypocrisy because he monetizes the debt and he encourages big spending.
Judge Napolitano: You have spent the greater part of your career educating the public about the dangers of the Fed and you almost single-handedly have persuaded the nation that we need to know a great deal more about the Fed and need to be wary about letting it do whatever it wants to do. But you’re not going to be able, most respectfully, to persuade Ben Bernanke to cough up his books on the basis of your persuasion. You’re going to have to use the tools available to you as a member of Congress and now, happily, as Chairman of the House Subcommittee on Domestic Monetary Policy to force him to open those books. Can you do that?
Ron Paul: Well, I don’t know because last year, they used the law to try to force him under the Freedom of Information Act, he just ignored it. He goes to court and ties it up in court for years. Let’s say we get a good law passed for transparency and auditing the Fed, he’s going to take it to the courts. It’ll be dragged out for a couple of years and he can spend as much money as he wants because he prints it. So he has all the legal power to do it and he will probably just ignore it. And unfortunately, historically, the courts have been very much in favor of Central Banks. Sound money rarely gets protected by our courts.
So I hate to sound like a pessimist, but everything that we do I think is valuable because it’s telling the people what’s going on. They have to direct their attention. Today we tried to tie the Federal Reserve to unemployment, which I think is an easy connection to make. And then, if and when that times comes, when we need to have a sound monetary system, knowledge for the people is what’s important. Jefferson knew this and the people knew what to do then. Andrew Jackson knew about it.
And periodically, times comes in our history where the people say, “We have to have sound money.” So there’s two things going on. One, is to get more information and propose changes, and competition. The other is to prepare for that day that unfortunately is going to come when the Federal Reserve is going to do themselves in. I mean, they’re going to destroy the money, and of course, that’s a very dangerous situation.
Judge Napolitano: I don’t think that Jefferson exaggerated at all when he said, “Central bankers can be more dangerous or more powerful than standing armies.” Central bankers, this one in particular, could be more powerful than the President, because he doesn’t have to answer to anybody, because he can just add zeros to whatever bank account he wants to add zeros to.
Ron Paul: So he’s more powerful than the President and I just mentioned, he’s more powerful than the Congress, so… A few years ago, when I would say that, “Oh, no. That’s impossible. The President runs the world and he has the armies.” But you point out that the control of the monetary system is most likely more powerful than even our President. It’s sad to say.
Judge Napolitano: Congressman Paul, it’s a pleasure. Thanks very much for joining us.
Ron Paul: Thank you.