Larry Kudlow: For an exclusive interview, Texas Republican Congressman Ron Paul, who by the way, is not only a presidential hopeful, but finished a very close second in the recent Iowa straw poll. Congressman Paul, as always Sir, welcome back to the program. I want to get your take on what Governor Rick Perry said today. “Almost treacherous or treasonous” regarding Ben Bernanke. What’s your thoughts, Sir?
Ron Paul: Those are pretty strong words. But you know, the founders felt pretty strongly about counterfeiting. I wouldn’t call it treasonous but I would call what our Federal Reserve does morally equivalent to counterfeiting because they create money out of thin air and they give us our problems.
In 1792, when they had the first Coinage Act, they thought so strongly about this issue, they invoked a death penalty for people who were counterfeiters. So, they never liked this idea of counterfeiting. And they did not believe we had the right to emit bills of credit. So, I like this issue. To me, the fascinating thing is that the Governor comes into the race, he gets a lot of attention. And on the first day out, they ask him about the Federal Reserve. This hasn’t been done, maybe ever. So, I would say monetary policy…
Larry Kudlow: So, monetary policy is front and center in this presidential race, which is probably where it ought to have been. Now, you, Sir, have always been a strong opponent of devaluation and money printing. Is Governor Rick Perry onto something here?
Ron Paul: I think, politically, he’s pretty astute. He came out for secession too when he had a Tea Party candidate running against him. So, no, he’s pretty good. But I have no idea what his monetary policy issues are, what is real principles are. But I do know that the fact that he came out and didn’t say: “Hey, lay off the Fed. The Fed’s my friend.” Which means it’s a turning on this whole issue of monetary policy. And you’re right. I was motivated in the 1970s because the handwriting was written on the wall for me forty years ago. We just sort of celebrated that date forty years ago when the Bretton Woods ended. So, that was a signal to me that the dollar was doomed.
Just look now: it used to be 1/35th of an ounce of gold, now it’s almost 1/1800th of an ounce of gold. So, we have a very weak currency and, Larry, I agree with you wholeheartedly. You need a strong currency. This whole idea that a weak currency is healthy for the economy – you need a strong currency but you need to invite capital. If you’re not going to allow the press to mess up the deal with capital and pretend they can get capital out of a printing press, you got to get our capital back home. Which means you’ve got to get rid of these taxes on capital. And then I think we could thrive again. But we’re not on the verge of doing it.
But I think we’re going in the right direction because we are talking about reducing capital gains taxes and taxes on corporations. Texas has done better because we’ve never had an income tax on our corporations. They’re all for individuals and I think that’s very, very good.
Larry Kudlow: And, Congressman, let me just ask you. Another one of your opponents in the presidential sweepstakes is Governor Mitt Romney. Now, I’m not taking sides here. I just want to note, when I interviewed Governor Romney back in April, I asked him specifically about Federal Reserve policies, about QE2, and I asked him about dollar depreciation. I played the clip earlier, I’m sorry you missed it. But Mr. Romney, Governor Romney, defended Ben Bernanke. What’s your comment on that?
Ron Paul: Well, that would tell you where he’s coming from as a very establishment economic position. And, therefore, he wouldn’t be arguing the case for hard money, or sound money, or a strong currency. But that view may change, who knows. I think the country is changing. And they’re putting more emphasis on monetary policy. And eventually they’re going to come around to believing a strong currency is the most important. But I don’t know. I’ve never discussed it with Mr. Romney about his monetary policies.
Larry Kudlow: All right, Congressman Ron Paul. We appreciate you…