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Jason Lewis: You know, speaking of scaring big government activist on Halloween, I’ve got another thing that might scare them tonight; somebody running around dressed as President Ron Paul. That ought to scare any big-government activist. Joining us now is the Congressman from Texas and presidential candidate, who is busy surrounding the state of Iowa before January 3rd. He’s opening offices in surrounding states, one of those is Minnesota. Congressman Ron Paul joins us now, Congressman, welcome to the Jason Lewis Show.
Ron Paul: Thank you, it’s good to be with you.
Jason Lewis: You are opening offices in the Gopher State, but you’re probably circling the Hawkeye State, I imagine?
Ron Paul: Yea, we’re doing our best to be in every place we need to be, and I’m very pleased that the support has come in, financially as well as volunteers, to be able to do that. So we’re doing quite well as far as I’m concerned.
Jason Lewis: You’ll be in St. Cloud on Saturday for the big opening of the Minnesota festivities and, of course, you’ll be in and out of Iowa between now and January 3rd. There’s some good news for you, in the latest poll, the Des Moines Register Poll has Cain and Romney at the top, but the only other candidate in double digits is one Ron Paul at 12%.
Ron Paul: Yea, I’m pleased with that and, of course, it would be nicer to be a little bit higher, but one thing is we don’t have to worry about the dips. Some of the candidates come and they surge to the top and then suddenly they fade back. So I think we’re pretty secure where we are, and I think the growth will continue.
Jason Lewis: What do you make of the notion that in Iowa you need a ground-game, you need an organization? You don’t just need to perform well or have a very energized base nationally, you need people on people on the ground, and you need to have some inroads. Does the Paul campaign have that in Iowa?
Ron Paul: Yes, better and ever before, and especially compared to 4 years ago. And almost winning the Ames Straw Poll was a good starter for us, because that meant we had located a lot of strong supporters and they became key to our campaign for what we’re building now. But things have been going quite well there.
Jason Lewis: Let me ask you a couple of questions you said over the weekend, I hear, that you’re not going to run as a third party or independent candidate if you do not get the GOP nomination, is that correct?
Ron Paul: Yea, that’s correct. I don’t even think about that, I’m not contemplating that in any way whatsoever.
Jason Lewis: I happen to agree with your particular foreign policy stand, I happen to believe that Taft and Reagan and really the true conservatism going back decades, was one of a neutral foreign policy and avoiding these foreign entanglements and misadventures and all of that, and we’re not going to get rid of terrorism until we get out of people’s faces. I concur with all that, I’ve been saying so. But the fact of the matter is, Congressman, does the rest of the Republican Party agree with that, and how do you get the nomination without getting over that hurdle?
Ron Paul: Well, there’s no doubt that we have to deal with that, but one thing is, things are a lot better now than they had been. Right now, if you look at the entire population of the country, 66% are saying we need to get out of Afghanistan right away, so we’re making progress on that. And I think maybe the conversion to our position won’t be so much on principle, as much as just practicality. I’ve always argued over the years that I’d win the argument for budgetary reason if nothing else, because most people are starting to realize we just can’t do this. And even those who disagree realize that when I do talk on the campaign trail and mention that we ought to be spending that money here at home instead of overseas, that gets a pretty loud applause.
Jason Lewis: Well, there’s no question that if you were running in a general election, I think the GOP is missing a golden opportunity to turn the tables on the Democrats who were so anti-war during the Bush years, and then all of a sudden had an epitome when one of their own Democratic Presidents, a la Woodrow-Wilsonesque, is leading the interventionist charge. So I think politically it’s a good idea, but I also think it’s the right thing to do. But I still don’t think the neo-conservatives within the GOP are coming onboard anytime soon, and that could be a bridge that’s pretty far.
Ron Paul: I think you’re right, but it is the challenge, and that’s why were on TV with ads trying to change people’s minds, and there’s a fertile field out there for changing people’s minds. But the big test will be in January, there’s no doubt. We’ll keep plugging along, and it’s easier to keep plugging along if you’re very confident that’s the right thing to do.
Jason Lewis: Well, you’re certainly getting more support, as over the weekend 13 troops were killed in Kabul and you got a propped up government there that can’t control the outskirts of the capital city, let alone the rest of the country. But what would you say to this? Going back a number of years, however, after 9/11 something had to be done, you supported routing the Taliban in 2001, 2002, as most of us did. But what’s wrong after that is saying, “Alright, look, we routed you, here’s the deal, however”. Because there was a great division within the Taliban as to whether to allow Al-Qaida in, that means there was support on keeping them out. “We’ll cut a deal, you can do what you want, it’s your country, but don’t ever let them in again”, and cut a deal years ago with the Taliban.
Ron Paul: Yea, and actually we did less of that, we did less of pursuing the Al-Qaida that we weren’t into nation-building and they used the whole mess as an excuse to do things they had wanted to do all along. The neo-cons have always wanted to go in there and go after Saddam Hussein. So they misplaced their efforts, and really the authority was more directed at Al-Qaida, those directly responsible for 9/11. Indirectly, obviously, Taliban had something to do with it, but the Taliban has never been dedicated to coming over here and killing us. And the reason there was more tolerance there is somewhat like their traditions and all. You know, the real training, if we were dealing with the direct people that were involved, 15 of them were Saudis, there was more justification for probably going into Saudi Arabia than there was for going into Iraq or even going into nation-building in Saudi Arabia. Some of that training with Al-Qaida occurred in Germany and Spain and then they learned how to fly airplanes in Florida. So they misdirected their efforts, I think they took advantage of it and they pursued a foreign policy that was completely detrimental to us.
Jason Lewis: Well, I will tell you this; there’s a reason that Afghanistan has been called the graveyard of empires for all these years, and the Soviet Union found that out, and I concur with you 100% on that particular issue. And I do think you’re ahead of time and I think the people are going to come around, but there’s a lot of blood and treasure being spent in the meantime. Let’s talk a little bit about domestic policy. We’re talking with Congressman Paul, presidential candidate from Texas. You also told the Manchester Union leader last week that, and you’ve been harping against the Federal Reserve for quite some time. There’s no question that what happened in housing was a classic Austrian bubble, where you had too many dollars building up an asset, and once the banks extended the debt and they got nervous over the bad debt and once the prices got so high that nobody could afford them, the whole thing burst. And the goal of the Obama Administration has been to re-inflate the bubble, we need to let the market clear and housing to hit prices, I couldn’t agree with you more. But blaming this all on the Fed is a little bit, not misleading, but it misses the ball, and I want to get your reaction to this. It doesn’t miss the ball, really, but I think the fiscal side needs some scrutiny. Think about this; if you got and easy monetary policy that’s clearly far too easy, if the Fed triples its balance sheet, which it has, it’s doing so traditionally by buying government debt. If we weren’t running deficits, the federal government weren’t floating bonds year in year out, how would the Fed expand the monetary base?
Ron Paul: They could do what they just did, they brought mortgage debts.
Jason Lewis: True.
Ron Paul: They have too much leeway. But I think the connection is very important, but my argument is just a little bit different. If the Fed wasn’t there to buy the debt as the last resort, then the government couldn’t spend and couldn’t run up the debt. But interest rates would go up.
Always: Alright, hold that thought, Congressman Ron Paul, we got to take a quick break. Okay, Congressman Ron Paul has been kind enough to stick around for one last question, or actually a continuation of the previous question, and then we have to let him go. But, Congressman, we were talking about the link, the nexus, between fiscal policy and monetary policy, and the mortgage purchases were extraordinary and that is why we’ve got an asset inflation already. But traditionally, they bought T-bills, they bought special treasury bonds to expand the money supply. Well, these deficits were running, which was a fiscal phenomenon. We’re allowing them to monetize the debt, you run no deficit unless the Fed engages in an extraordinary act, which is quite transparent, how do they monetize the debt?
Ron Paul: Yea, I think they feed on themselves, my argument was, of course, that if they couldn’t buy the debt, the Congress would have to stop because the interest rates would go up real high. But the Fed uses your argument all the time, and there’s some legitimacy to the argument, and that is that it’s a congressional problem. The Fed feels obligated, that’s what they’re setup to be, the lender of last resort. So they say if Congress wouldn’t run up the debt, they wouldn’t have to do it, and there is some truth to that. But I think the whole system is bad; the Congress is irresponsible, the Fed is irresponsible. But even in the original Federal Reserve Act of 1913, they were given permission to buy private securities, they never did it essentially. Maybe they did it a little bit in the depression, and they obviously did it here in 2008 and 2009. But just the principle of monetizing anybody’s debt, I think it’s economically wrong and morally wrong as well.
Jason Lewis: Last question for Congressman Ron Paul. Going to a gold standard, some say, certainly monetarist would say, would be problematic. If you take a look at the price of gold, it went from $300 in 2011 to $2000, or not quite $2000, at its peak here. That will be a whole lot of dollars turned in, that will be a whole lot of deflation if indeed gold was moving in that direction and people in the traditional gold standard were turning in their currency. That would certainly gyrate the markets and certainly, some say, would bring about a massive spiraling deflation.
Ron Paul: Yea, when the British went back on the gold standard, there was deflation because they went back at the old standard and the old ratio. Now if we went back to the gold standard at $35/ounce or $500/ounce, that would be deflationary. But if you let the markets sat it, it might be $5000/ounce. There’s a good example of how that might work if you look at what they did after the Civil War, they went from when gold was a couple hundred dollars per ounce, they wouldn’t print greenback, they quit printing them, and the gold price went down.
Jason Lewis: You’re right, you can’t go back at $35/ounce. I’m just saying that, if in 2001 had it been $300/ounce, the current price of gold, and gold skyrockets, people are going to turn in a whole lot of dollars and you could have deflation.
Ron Paul: Well, I think the main thing is to get some stability where they either turn them in or take them out. They want to just be confident that they have a measuring rod. So people worry about whether there’s enough gold or not. The only way you have deflation is if you try to price the dollar-to-gold ratio lower than the market says it should be. But if you let the markets set it, it should go in neither direction, because there should be an insurance that the currency is backed by something, and people don’t even think about it. So you want stability rather than …
Jason Lewis: You certainly have to take the discretion out of the hands of the central bankers.
Ron Paul: Yea, for sure.
Jason Lewis: You grudgingly praised Paul Volcker in one debate, and he was the last guy that had the courage to really bring inflation out of the economy, and now the perversity of it all is, on the fiscal and monetary side, we just keep trying to reflate the bubble. And, as you pointed out, we’re in a debt crisis, and adding more debt and more fiat money is only going to make the next downdraft, the next recession that much worse. I don’t know why these people can’t see this.
Ron Paul: Yea, you wonder. We got into this by spending debt, printing money and over-regulating, so they’re trying to get out the same way. It doesn’t make any sense at all, you know?
Always: Right. Alright, Congressman, I appreciate your time today, you’ve been more than generous. Have a good event in St. Cloud, Minnesota and across the country and Iowa and good luck on the trail.
Ron Paul: Thanks a lot.
Jason Lewis: You bet. Congressman Ron Paul on Jason Lewis Show. Now we can talk a little bit about that, he’s doing quite well in Iowa, as are Herman Cain and Mitt Romney.