Ron Paul: The Banking Establishment Is in Panic Mode


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Paul Westcott: I got to say, this is probably one of the better ads I’ve seen in the past 12 hours. Here we go, Ron Paul releasing an ad about Newt Gingrich, take quick listen.

Voice: If it’s a real question of policy, and a real question of values, and a real question of seriousness … a real question of policy.

Female voice: We don’t always see eye to eye, do we, Newt?

Newt Gingrich: No, but we do agree that our country must take action to address climate change.

Voice: Newt Gingrich has been on both sides of a long list of issues, sometimes in the same week.

Paul Westcott: Okay, so there you go, that’s just a portion of the 2 minute 15 seconds ad that’s out there. Joining us on the line now to discuss that so much more is Congressman Paul. Congressman, how are you doing?

Ron Paul: Good, fine, thanks for having me.

Paul Westcott: Oh, not a problem sir. And it’s interesting that ad that your campaign released is focused on Newt Gingrich and some of the inconsistencies in his campaign. How would you follow up that ad in saying, “This is not the guy”?

Ron Paul: Well, I haven’t thought that far along, but people have asked those questions: “What will the sequel be?” But, you know, I think it’s powerful because I think this is what people are so disgusted with, it’s not getting straight answers from politicians, the flip-flopping, and they change from one year to the next. And they say one thing and they get elected and they never do it. That’s what I hear, and I hear that they complain both about Republicans and Democrats.

Paul Westcott: Yea, I mean, honestly, that seems to be the big focus. And right now, on a campaign field that’s extremely crowded, we’re starting to see different polling every different week. There’s a new frontrunner, it looks like Newt Gingrich is actually doing extraordinarily well. You’re holding pretty consistently in second or third. What, sir, do you think would be the ticket for you to get ahead in this race?

Ron Paul: I think keep doing what we’re doing and progressing. And the other ones, you know, as you say, get to the top and then they get knocked down. Actually, Romney is not doing quite as well as he had been, and if Gingrich follows the pattern of others, he will pop up and pop down. It really raises questions. I’m sure the polls are accurate for the moment, but isn’t it amazing how quickly the moment changes. The only thing I’m pleased with is that our numbers don’t go down; they don’t go up as fast as the others, but there’s a steady increase. So I think it’s a solid base and I think that’s what we have to continue to do. And then wait and see, when people figure out what the others are doing, they might lose their enthusiasm for it.

Paul Westcott: Well, Congressman, now that we got the politics out of the way, I’ve been waiting to ask you this all week. I want to get into the issue of what the Federal Reserve reportedly did in lending over 7 trillion dollars during the financial crisis. It did during the financial crisis, and now it’s apparently printing and lending more money to European banks. What’s happening with this, and how come we don’t know anything about it until it’s already happened?

Ron Paul: You know, we got more information and they identified the 7 trillion [dollars], but actually there are figures that are much larger than that over 2008 and 2009. I think the 7 trillion was in a shorter period of time when they were able to identify. But over that year-and-a-half or so, it was closer to 15 or 16 trillion. But the amazing thing there that even impressed me was that 5 trillion dollars went overseas to the banks that our banks had investments in or were part owners. So there was a lot of bailing out going on then. But we’re back at it again. In many ways, this is a worldwide QE, a quantitative easing consorted effort, because I think they’re sort of in panic mode because they can’t handle this debt and they won’t admit how serious it is and they won’t liquidate the debt. So somebody has to get stuck with it. But I see the American people getting stuck with this, because this is a dollar rescue. The dollar is the reserve currency, it’s amazing the dollar holds up as well as it does. But even yesterday, with this effort, the dollar did drop. And it doesn’t bode well for the American people and the value of the dollar and inflation. But this is to bail out the banks, the banks own so much of that sovereign debt. And if it isn’t taken care of, then some of these credit default swaps will kick in, which I think would be the big, big event, and they have to prevent that and protect the banks. But in order to do that, they have to prop up bad debt at the expense of the American people. So it’s more of the same, but I think it’s going to be much bigger than what it was even in 2008 and 2009.

Paul Westcott: It seems that we’re propping up and blowing up, to use the metaphor, the bubbles. They just keep getting bigger and bigger, and in this case, it looks like we may see yet another bubble. A lot of economists at this point are looking and saying, “Well, a double dip recession could be precipitated by the fact that you have a European debt crisis”, you have the fact that money is really expensive to get, companies can’t run without having a credit card, without having some kind of credit. And that could potentially spread here. If you were President of the United States tomorrow, what would you do in this case?

Ron Paul: Well, what I would do is not bail out anybody through any congressional appropriation, which is a significant amount, but that’s not the big one. You have to reign in the Fed, you have to get Congress to pass something to say that the Fed can’t do this without congressional approval. They may hold bigger than the Congress when it comes to spending money, so this can’t be allowed. But that means we’d have to adopt a policy of allowing the debt to be liquidated. The people in Greece and the banks that are holding that debt would have to declare bankruptcy. It’s an ugly situation, but the choice is, letting the banks suffer the consequence, or putting all the penalty on the American people. So I would do my very best to stop that and prevent them from doing this. But, unfortunately, right now, there’s a strong sentiment in the establishment (Republicans and Democrats) of, “Oh no, you can’t let that happen. If we don’t, we’re going to have a depression”. But I don’t worry about a double dip, I worry about a continuation of the deterioration of this whole system. Although the numbers say that we’re not technically in a recession, but how about the people who are still unemployed? I mean, it’s very depressing for them, because they’re not getting the jobs. So it’s not a very good situation.

Paul Westcott: No. It seems extraordinarily dangerous at this point. I want to get into a little bit of a local issue here, Congressman. It’s a state wide issue, but it also has some national implications, and that’s the right to work. In the state of New Hampshire, there was a veto override vote yesterday in order to allow non-union members working in union shops to basically be exempt from paying dues. The governor said, “No, you have to pay dues, you have to make sure that you pay into the system”, and that’s pretty much what the legislation [said], the veto was not overwritten. What do you think about Right to Work in general in the states, and would it be good for the state of New Hampshire to become the first North-Eastern state to be a Right to Work state?

Ron Paul: Oh, obviously so. I mean, if you believe in a free society and free markets, people should be able to do things voluntarily. So nobody should be coerced into a contract. This is an issue of contract. But here we’re saying we have to give special privileges to collective bargaining and put more pressure on the business man. So business people can’t force people to work for them, but they shouldn’t be forced to hire people, either. But there should never be a prohibition against organizing and collective bargaining. People should be able to get together and talk and try to get their best interest served, but that doesn’t mean they can get the clout of the law. And when they force people to pay dues, and they’re forced into these contracts, this is a major source of unemployment. And if you look at the states that have been more extreme, in the industrial states, in the mid-west, that’s where all the jobs have gone and they’ve been put out of business and it pushes so many jobs overseas. So it pushes labor costs higher than they should be, and it’s great when they’re getting the money, but what good is higher labor costs if you don’t have a job? So it’s temporarily beneficial, and they think it’s salvation and they’re sticking it to the business man, but when you have a contraction, you have a correction. Profits have to go down, salaries have to go down, and labor costs have to go down, they have to adjust. But artificially keeping them high is exactly what they did in the depression and that’s why the depression lasted so long.

Paul Westcott: And, Congressman, one last question. I want to ask you about something that is working its way through the Congress right now, and that’s this payroll tax cut the President continues to talk about. Now, he’s gone out on the campaign trail and pretended to be a guy who’s in favor of cutting taxes, which I find astonishing. But he’s out there on his campaign stops now, talking about this, and he’s making it seem as if the GOP would be against this payroll tax cut. And if that’s true, can you tell us why?

Ron Paul: Well, you know, there’s a lot of demagogueing going on with that, because some Republicans weren’t in favor of them, some of them are. I’m for any tax cut you can get. Then they come up with this idea of what you got pay for. Well, in theory, you don’t have to pay for a tax cuts, it’s your money, you should be able to keep it anyway you can. But if they did, why don’t they cut some money from some useless foreign aid program or some place like that; that’s where I would cut the money from so that you don’t put the tax back on. But I think both sides are demagogueing this issue and the President thinks he’s going to embarrass the Republicans by arguing the case for lower taxes. But it is an uncomfortable position for a Republican to argue, “No, we need to put that tax back on” and at the same time, they don’t want to put the tax back on the Bush taxes, you know, the exemptions that Bush gave.

Paul Westcott: Congressman Ron Paul, we appreciate the time. Doctor and presidential candidate as well, you have a whole bunch of titles there, sir, thank you so much.

Ron Paul: Thank you.