Ron Paul: Bernanke Will Destroy the Middle Class

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Transcript

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Interviewer: … and that is the issue of congressional insider trading. There was a 60 Minutes report recently and now some legislation that’s getting some attention, The STOCK Act, which would essentially prohibit this sort of insider trading loophole for congressional members. I’m just curious what your thoughts are on that, if at all, and do you support the STOCK Act?

Ron Paul: Well, I haven’t thought the issue completely through, I didn’t see the 60 Minute report, but it seems like if you had the right kind of people in Washington, then there wouldn’t even be a suspicion of a problem like this. But, without knowing about this in detail, I can’t imagine why the members of Congress wouldn’t be under the same laws that you would be under on insider trading. So, a lot of times when things like this come up, a lot of grandstanding goes on and they come up and say all of a sudden we’re going to have a fancy piece of legislation.

So I haven’t made up my mind about the legislation, but obviously, if we have access to information we benefit by it. I think that’s a pretty serious offense. But in some ways, that’s the culture of Washington. When you think about individuals who have been in Washington and they know the system, and then they leave Congress and they make millions because of this insider information and trading and they become lobbyist. So I think the culture of big government so often in bed with big business, is a very dangerous situation. But if there are some rules and laws we can pass to restraint the congressmen from doing this, we should certainly look at them.

Interviewer: If I can just follow up on that, obviously one of the biggest stories nationwide right now is the Occupy Movement. And it sort of leads me to ask you about this, because I think this congressional insider trading issue is just one of many examples of the sort of things that this movement is opposed to, and would like to see changes made with regard to. So I’m just curious, do you support the occupy movement, and if so, why or why not? What are they getting right, what are they maybe not getting right?

Ron Paul: I think it would be wrong to say that if you support where it might have 6 factions to it. It’s sort of like, it’s an all-or-nothing thing for the Tea Party Movement; that actually started during our last campaign 4 years ago, but that wouldn’t mean I would all of a sudden say, “I support everything the Tea Party stands for”, because that has changed a whole lot and there’s a lot of outside influence. It’s the same way with the Occupy Movement. But, in general, I’m very sympathetic. Some people are pretty harsh with their criticism, saying, “Well, they need to take a bath and get a job”, but who in thunder took their jobs from them? Yea, there are some lazy people out there, there’s no doubt about it. But the people who are unemployed, that’s a little bit different story and I think they should be careful on criticizing just everybody for not having a job, because I see that as a consequence of bad government policy.

The government is responsible for the business cycle, free markets don’t create the business cycle; the Federal Reserve and the Congress create the business cycle. And, therefore, the unemployment is the result of bad economic policy. So if they’re complaining about that, I’m all with them. If they’re complaining about some rich people who have ripped us off, I’m all with them, because I didn’t vote for any of the bailouts, I’ve been trying to expose the Fed on how they bailed out people for decades. And they dealt with 15 trillion dollars, bailed out banks and rich corporations, they won’t tell us a thing about it. And there are some of my supporters down there complaining about that, too, saying we need to know more about the Fed. So anytime corporations and banks and others rip the taxpayer off, they have a legitimate complaint. But that is mixed in with people who resent anybody who has made some money. And I don’t like that, I think people should be productive, they should be rewarded and not punished, so the two have to be separated out. But I have a lot of sympathy with them, and I’m not going to be jumping on and saying, “You know, all they need is to go get a job” because I think I understand the business cycle a bit better than some others.

Interviewer: Congressman, you were here 4 years ago, and you finished with about 7% of the vote in the primary. And so what is it that has occurred in the intervening 4 years that encourages you to think that you’re going to do much better this time?

Ron Paul: Well, I don’t think there’s any doubt that the conditions of the country have changed. 4 years ago in 2007 in one of the debates I was saying that the recession had already started, and the other Republicans weren’t willing to say that because they’d have to be critical of their own party, so they mocked that. But we were actually in a recession when I said that. And then we had the collapse, which we’ve been talking about for a long time. So the economic policies have just fallen in my direction, and that has been my big concern, and the explanation of the business cycle and how we got in this mess and worrying about the danger of the huge deficit. There’s an explosion of debt now and deficits and nobody knows what to do.

And I’ve been trying to get some common sense in Washington with both parties about why we don’t have to have continuous warmongering and getting involved in one war after another. And now the American people are with me on this, sometimes 70% people in the polls say, “It’s time to get out of there, we don’t need another war. We need to get out of Iraq and out of Afghanistan and come home”. During this period of the last 10 years, we’ve added 4 trillion dollars worth of debt just with the wars going on in the Middle East. So I would say the American people are very much coming in this direction, and that’s why I think my numbers are so much better right now. I mean, I’m very optimistic about the difference between now and 4 years ago, it’s the difference between night and day. And I think most people realize the country is in a lot worse shape and needs to do something.

Interviewer: Obviously, you’ve been preaching finance reform for decades. What do you feel, the Dodd-Frank Act works or doesn’t work.

Ron Paul: Well, it doesn’t work, regulations can’t compensate for bad policy. And if you have bad congressional policy and bad monetary policy and think, “Yes, we’re going to create easy credit and low interest rates and have all kinds of programs and say, ‘If we watch the regulators, we’re going to prevent these problems from cropping up'”. So you have to deal with the cause. Dodd-Frank is the Democratic version of Sarbanes-Oxley. We had ENRON, so they said it was a lack of regulations, so they passed Sarbanes-Oxley, and that added a trillion dollars worth of expenses onto the business community at a time when we were moving into a very difficult decade. And Dodd-Frank is going to do the same thing, add another trillion dollars. And then they say, “I wonder by business people don’t want to hire people”. And then you add on the medical changes in Obama Care, I mean, this is devastating. Business people can’t make their proper calculations. So I think it’s very damaging to the economy and I don’t see a recovery unless we change our attitude about what the federal government should be doing.

Interviewer: That calls for a clarifying question there: the situation that Sarbanes-Oxley was going to address, and then Dodd-Frank was going to address, in those situations, do you see it inappropriate for the government or for Congress to have done anything, or that it did the wrong thing? And what should it have done in those instances?

Ron Paul: When it comes to regulations? Well, government has a responsibility, not necessarily the federal government. When ENRON went bankrupt, it wasn’t the SEC that warned us about it or took care of it. They didn’t do any good, they gave false reassurances, it was a moral hazard: ‘The SEC is there and they filled out a report, so they’re solvent’, and this sort of false reassurance. But the fraud that was committed was obviously a governmental function, and they were convicted of fraud under Texas state law. The regulations failed, fraud laws worked. When it comes to the collapse in 2008, they ignored the market and they said, “Well, we have to bail them out” so they used congressional funds, taxpayers funds, the Federal Reserve, to bail out their friends and they do that at the expense of the taxpayers. All the derivatives and the mortgages and all the worthless stuff was brought up by the taxpayer and the Federal Reserve and transferred over. And so the middle class lost their jobs and they lost their houses. So the government has a responsibility, but if you’re careless and give them too much power, that power is taken over by the special interest; by the banks and the corporations. So they made the money when the bubble was being blown up, and they got bailed out. It’s a terrible system.

Interviewer: So would there have been an appropriate regulatory response that should have been taken that wasn’t taken, and if so, what?

Ron Paul: Well, it is. It would have been encouragement and no bailouts and say if you’re bankrupt, you’re bankrupt, you can’t dump your bad debts onto the people. It should have been handled more like it was handled in 1921 when they had the sharpest drop with that depression, and they had the sharpest drop in prices and wages and everything else. But it lasted a year and it was over and nobody even knows about it. But it was a bad depression as a consequence of the inflation in the mal-investment of World War I. The correction had to come, but then it happened in only 1 year. But once you get interfering and saying, “Well, we can’t allow the mistakes to be taken out of the economy, liquidate the debt and get it out of the way”, all you do is you prolong it, and this is what we’re doing.

So we’re into 4 years now, it’s going to last a long time unless we change this attitude that we don’t keep bailing out all the special interests. And they’re getting ready to do it again. Bernanke, just the other day, when they were talking about the European problems, said, “I’m watching it carefully, and in order to maintain stability, I’m going to be there”. He’s going to print money at will because he doesn’t want the banks to fail. It’s a worldwide phenomenon, it’s a dollar phenomenon, and he will print at will and he will intervene at will, which would destroy our middle class. And that’s what happens when we allow a government or a central bank to destroy the value of the currency; you destroy the middle class, this is historically known. And the evidence is all around us, the middle class is getting poorer, the standard of living of people on fixed incomes is going down.

You can’t keep up with what the Social Security beneficiaries are getting because the value of the money is going down. So as long as you have this belief that government can print money or spend money and take care of people and not look at the source of the problem, which is the artificial nature of the business cycle that’s created by the Federal Reserve, no, all you do is you prolong the agony. We did it in the depression, the depression was different in 1921 and the depression lasted until 1946 essentially because it lasted all through World War II, that’s when we got economic growth again. Japan follows this economic theory that you prop things up and the banks held a lot of stocks and they kept everything at artificially high levels. You don’t have the market sorting things out and saying what is valuable. We don’t know what these mortgages derivatives are worth, they may be worthless, but we buy them up. And we create the money to buy them up which devalues the currency. And then we say, “Oh, we need more regulations” and it causes massive confusion. So our business people go overseas.

So no, you need regulations and you need the government to act properly and you need to understand property rights, you need to understand contract rights, you need to understand bankruptcy rights, you need to understand why special interests can’t control our government, whether it’s through the appropriation process.

And we need to know what the Federal Reserve is doing. I mean, this idea that they can create 15 trillion dollars, and we’re not even allowed to know; this is crazy. And 5 trillion dollars of the credit they created went overseas bailing out other countries and central banks. And Bernanke, just like I said, assured us few weeks ago that he would be watching it. What he’s saying is he’s going to take care of the system and forget about the people. When I point this out to Greenspan or Bernanke, I asked, “What right do you have to decide what the interest rates should be?” and he said, “This is my job, this is what I have to do”. So he makes them artificially low, low interest rates are supposed to make everybody happy. It makes the banks happy. But what if you happen to be a saver, what if you’re skittish about the stock market and you don’t want to be involved and you’re in retirement and you buy CDs? What right does he have to say that they get 2%, instead the market might say he gets 6% or 7%? When I asked him, [he] said, “Well, you just can’t make everybody happy, you can’t take care of everybody”. But the market isn’t so judgmental and serving special interests, the market is going to help the people who are frugal and save and take care of themselves.

Interviewer: And so the market can be left to its own devices?

Ron Paul: Well, no. I explained how the market should be involved, you shouldn’t permit fraud, you shouldn’t have bankruptcies, and you should follows the laws during your contracts; that’s an important role for the government. And those laws are much stricter than the government. Because say you argue the case for bankrupting regulations to protect the people against banks doing something. Who writes the bank regulations? It’s the banks. So the bankers become the lobbyist and they really write the regulations. If you’re dealing with the drug industry and the medical profession, it’s the drug companies that come in and write the laws, because they are the lobbyist. So it empowers those people with money to do it. So the regulations of the free market are much, much stricter and not so directed towards the special interests controlling. This is why the rich got bailed out and the poor are suffering.

Interviewer: If we come out of finance here for a second, and stick with regulation. We have 20 miles from here a nuclear power plant, its license is due to expire in March, and the owner of the plant is making efforts to have that license extended. The regulatory agency that oversees that plant and other nuclear power plants in the country, the NRC, is believed by some to be so close to the industry that it’s in bed with them. Do you have any views on that particular score, first, regarding the NRC’s regulatory position and integrity? And secondly about nuclear power itself?

Ron Paul: Well, I think the markets should determine these things and I think the people in New Hampshire should make the decision. Why can’t they decide whether there’s danger or not. So I would think that would be fine. But personally I have sympathy for nuclear power, but my opinion should have no value, because what should really count is, if you’re going with the regulations of the marketplace, you say, “Well, should we subsidize it?”. Well, the market say no. Somebody else says, “We should subsidize it because it’s good”.

No, I’m saying no, you don’t do it, it has to act on its own. Then they ask, “Should it be insured?” well, we’ll find out. If it’s too expensive, that means it’s too expensive and too dangerous to do it. But if you say, “Oh no, if you allow the regulatory agencies to come in and have the special interests come in and say, “We think it’s safe, we’ll take care of the insurance and we’ll take care of the waste products”, you never get an honest number for what the cost of energy should be. And it’s cost and safety and the market has to examine who’s safe and who’s paying for it. But if you get the taxpayers and the regulators involved, the special interests will control it. But I think nuclear power should be very competitive if they can do it safely and get no benefits and no subsidize and provide cheap safe energy. It happens to have a pretty good record on safety.

If you look at the number of deaths from nuclear power compared to hydrocarbons, it’s rather minor. But I think it should all be done by trying to get free market pricing. It’s sort of back to finances. If you don’t have free market pricing of your money and your interest rates, you distort things. If you don’t have free market pricing in energy, like right now, energy prices are distorted by subsidies to corn because of the special interests. They say, “Well, it’s important because of environmental reasons, we have to do ethanol”. So, all of a sudden, there are people who are going to benefit, they write the regulations. I want the market to decide. There’s no proof that ethanol from corn is going to give you a better price for energy, they might use up more hydrocarbons making the ethanol. And, besides, you might be able to get more ethanol out of sugarcane, or you might be able to get more ethanol out of hemp. If you did that, maybe the market would sort this out. As soon as you get the government in there saying, “Okay, this is what is good, we are going to subsidize corn, we’re going that use 10% ethanol”, it serves the special interests and the people won’t find the right price. And it will be a distortion and somebody is going to benefit at the expense of somebody else.

The market is pretty smart, believe me, the market is a lot smarter than the politicians and bureaucrats I know. What do we know about the best thing for you in New Hampshire on what the energy should be? And Bernanke doesn’t know what the interest rates should be. And since the regulations are inevitably controlled by the special interests who are going to be regulated, it backfires on us. That’s what my contention is.

No, I’m saying no, you don’t do it, it has to act on its own. Then they ask, “Should it be insured?” well, we’ll find out. If it’s too expensive, that means it’s too expensive and too dangerous to do it. But if you say, “Oh no, if you allow the regulatory agencies to come in and have the special interests come in and say, “We think it’s safe, we’ll take care of the insurance and we’ll take care of the waste products”, you never get an honest number for what the cost of energy should be. And it’s cost and safety and the market has to examine who’s safe and who’s paying for it. But if you get the taxpayers and the regulators involved, the special interests will control it. But I think nuclear power should be very competitive if they can do it safely and get no benefits and no subsidize and provide cheap safe energy. It happens to have a pretty good record on safety.

If you look at the number of deaths from nuclear power compared to hydrocarbons, it’s rather minor. But I think it should all be done by trying to get free market pricing. It’s sort of back to finances. If you don’t have free market pricing of your money and your interest rates, you distort things. If you don’t have free market pricing in energy, like right now, energy prices are distorted by subsidies to corn because of the special interests. They say, “Well, it’s important because of environmental reasons, we have to do ethanol”. So, all of a sudden, there are people who are going to benefit, they write the regulations. I want the market to decide. There’s no proof that ethanol from corn is going to give you a better price for energy, they might use up more hydrocarbons making the ethanol. And, besides, you might be able to get more ethanol out of sugarcane, or you might be able to get more ethanol out of hemp. If you did that, maybe the market would sort this out. As soon as you get the government in there saying, “Okay, this is what is good, we are going to subsidize corn, we’re going that use 10% ethanol”, it serves the special interests and the people won’t find the right price. And it will be a distortion and somebody is going to benefit at the expense of somebody else.

The market is pretty smart, believe me, the market is a lot smarter than the politicians and bureaucrats I know. What do we know about the best thing for you in New Hampshire on what the energy should be? And Bernanke doesn’t know what the interest rates should be. And since the regulations are inevitably controlled by the special interests who are going to be regulated, it backfires on us. That’s what my contention is.

Interviewer: Let’s just circle back to the nuclear issue to just make sure that I’m understanding what you’re saying. So, if the market were to determine how this would work… You mentioned they need to be safe, so would that come about because the free market would acquire or would lead, inevitably, to a sufficient insurance market that would then impose safety standards?

Ron Paul: You could do that, that would be one way.

Interviewer: Or are you saying that should the government decide on safety?

Ron Paul: I think, because that is so significant, you could argue that there’s a clear and present danger when you’re dealing with nuclear materials. And they’d be no reason why your state couldn’t have some regulations on that. But I think you sort of touched on something that is so important, which is what the cost of insurance tells you. For instance, this whole thing about living on the Gulf Coast. I live on the Gulf Coast and windstorm insurance is too expensive, so we who want to live on the Gulf Coast (not me), say, “Oh, let the government insure it”. So what do we do? We build our houses on the Gulf Coast and they get blown down. If you don’t live on the Gulf, you have to do it. But if there’s insurance, what if the government was out of it, and the [insurance company] comes in and say, “Well, to build your house on the beach is going to cost you umpteen dollars”. You’d say, “Holy man, I’m either going to go uninsured or I’ll build my house stronger.” I wouldn’t do dumb things, I wouldn’t build there because “the government will take care of me” because they’re going to insure me. So the insurance rate is very important, and that’s the way it would be with a nuclear power plant. If they won’t insure it, and it’s too dangerous, I don’t think we should have nuclear power. But I don’t think that would be the case, because I think nuclear power is pretty safe, that’s my personal opinion. Just think, we’ve had nuclear submarines since 1950 and they sleep next to a nuclear reactor, and they’ve never had an accident. So that’s pretty good evidence, it’s not like it’s so dangerous. But I would let it sort out, I wouldn’t use subsidies and prop up the energy companies so that they can make more money by not paying for their insurance.

Interviewer: Just to clarify one thing;, if the safety end of it is going to be left up to the states, how do neighboring states handle that issue?

Ron Paul: Yea, I think that’s important. Most of the time, if you’re on a border and you’re next to another state, you can get to another state and talk to each other. But if not, if there’s an argument, the federal government would be involved. I think it’s the same way on other environmental things, too. Like if you have a river, or you have a power plant and you’re putting all your smoke, or your smoke’s blowing in the wrong direction and some other state is suffering. If you can’t settle it with an agreement between the two states, then there would be a role for the federal government.

Interviewer: We talk about letting the free market resolve it; it’s smarter than the bureaucrats, it’s smarter than the government …

Ron Paul: … the ones I know. It’s smarter than the politicians, too.

Interviewer: So then, theoretically, the mortgage industry should have done that, but didn’t, in every case. So we had sub-prime mortgages being approved that probably shouldn’t have.

Ron Paul: Because they were being insured by the government. That was Fannie Mae and Freddie Mac and Federal Home Loan Mortgages; that’s all distorted by the government.

Interviewer: So where I’m going, I guess, with that is, you talk about the government having a responsibility and fraud laws will help keep industry and finance in check.

Ron Paul: Yea, so they don’t have free reign.

Interviewer: We have a new financial regulatory agency, Consumer Protection Agency, is that a good thing?

Ron Paul: You mean for your state?

Interviewer: No, the federal.

Ron Paul: Oh no, I think it’s horrible.

Interviewer: Should the government not be involved in protecting consumers?

Ron Paul: Yea, by protecting the market, because the consumer tells you everything, the consumer buys and sells, and prices are set by the consumer. And if I’m the business man and I lie to you, that’s committing fraud; if anybody is hurt, you have recourse. But for a bureaucracy in Washington to do it, I think all you’re going to do is scare your business men and they’ll go someplace else. And if they are successful, they’re going to be controlled, the lobbyist will be the people who will be [regulating]. So that’s the real fallacy. I mean, theoretically it sounds ideal and all, but it never works that way. You’re safety in your drugs, for instance, sounds like a reasonable thing. You know, you want safety in your drugs. But the FDA and the drug companies are in bed together, and they squeeze out competitions and build up their monopolies and they love government medicine because they make more money. The insurance companies and the drug companies, whether it’s Democrats or Republicans reforming the medical care system, these corporations run the show, they support this. The government doesn’t take it over, it’s the corporations that end up taking it over. So, it’s well intended, but I think it always backfires on us and that the people you want to regulate, end up writing their own regulations.

Interviewer: So in that particular case, would the reasonable alternative be no FDA?

Ron Paul: I think so, because I think they’ve done more harm than good, because sometimes it might take them 25 years to allow a good drug to come on to the marketplace. And the rules and regulations inhibit the options of the physician to use drugs for anything other than what is not approved by the FDA, which means it slows up research and the costs go up. And then when it’s approved by the FDA, guess what happens if you’re on the inside track of that. If I’m the FDA and today I approve this drug, tomorrow the drug company’s stock goes up 50 fold just because a bureaucrat made this decision. So it’s a protection of the corporations, is basically what it is. People weren’t dying from bad drugs before we had the FDA, it didn’t happen. They’d be other agencies that would do this, and they’d be no reason to assume that all of a sudden the drug companies have it in their interests to give you bad drugs.

Interviewer: Well, I’m not sure if it fits in here, and it’s hard to prove in the negative, but are you assuming that there are no bad drugs?

Ron Paul: There are plenty of bad drugs, and the FDA has permitted a lot of them to get on the market, too. How many bad drugs are in the market now? Did you ever see a PDR? They are about that big, and probably about half of them are useless, but if it’s FDA approved … And what does the FDA do when it comes to alternative or natural products? The FDA and the drug industry keep them off the market; a natural drug product, alternative healthcare, freedom of choice. It is obstructed from us making those free choices. So it’s here to protect the drug industry. So they, very often, do exactly the opposite. I believe in free choice on picking alternative care rather than having it licensed through the FDA and these drug approvals. It delays, it costs so much. This is one reason why drug costs are so high, because it goes though these years and years and years of litigation getting approval, and that’s a source of making drug costs much higher.

Interviewer: So how did we get to this mess? Let’s just stick with FDA or the Nuclear Regulatory Commission; how is it that this body of burdensome regulations was allowed to developed? Was it parts of the private sector finding ways to protect themselves, or what?

Ron Paul: I don’t know, I haven’t done a detailed history of exactly this, but my assumption would be that there’d be a lot of well-motivated people saying, “Well, we need these regulations to help the people and protect the people”. But those individuals, the companies that are involved, immediately leap to it and take over and find out how they can keep out their competition, no matter what industry it is. Whether it’s the housing industry, housing insurance, it’s always “squeeze the little guy out and protect the big industries”. Competition serves the competitor who’s trying to compete with big industries, and I don’t like to see government protecting big industries and big corporations.

Interviewer: If we could maybe just switch up to another topic, something I wanted to ask you about was Roe versus Wade. And there hasn’t been a seemingly significant challenge to that law in quite some time, but, as President, you have pledged to attempt to pass these Sanctity of Life Act, if I have that right, which would define life as occurring at the …

Ron Paul: The We the People Act is the one that challenges Roe versus Wade.

Interviewer: Regardless the name of it, is this a battle, like some would say, that you’re truly prepared to embark on if you’re elected?

Ron Paul: Well, I have a position on it, but if that were the only issue, I probably wouldn’t be running for President. I’m trying to save the economy from total annihilation and I’d like to stop war and I’d like to produce and environment where we’d have prosperity. Some of these other things, like if you take the abortion issue, I just want it to be returned to the states and get the federal government out of it one way or the other; no laws or prohibitions or mandates or finances or anything. Just get the federal government out of it and try to get away from this thing, because that’s the way it had been up until 1973. But now this rises up a ladder. In the scheme of things, I think if we’re pro life, we ought to be talking about war and torture and assassinations. And what we ought to be talking about is why we have probably 22% of our people unemployed; that’s what we should be caring about if we care about life. And we need to care about the economy, but we got to understand what it’s all about. But the constitution is very clear: when it comes to acts of violence, and I personally believe abortion is an act of violence because I’m responsible for taking care of a human fetus, and if I do harm, I can get in big, big trouble. So to me it’s an act of violence. But it’s a difficult subject and it’s complex. And the state is there to take care of all other acts of violence. If you go out and rob somebody or if you injure somebody or commit manslaughter, there’s always a state issues. Why do we make it as a national issue? I’d just assume leave it alone. But I do have a position on it, but, like I say, my issues is I first ran for Congress because in 1971 there was the breakdown of the Bretton-Woods Agreement which ushered in these 40 years of disastrous economic period. And we’re in the midst of a correction and it’s a long way to go, and my determination that we waste so much resources on war, it’s the waste resources. Just think of the 4 trillion dollars of debt that we spent being involved in wars that we didn’t need to be involved in, 8,500 Americans died, 40,000 civilians and hundreds of thousands suffering from illnesses and the drain on the economy. And then we wonder why we don’t have enough resources for taking care of child healthcare and the elderly and a Social Security. We used the Social Security money to do this. So I think those are the Right to Life issues that I’m concerned about. I’m concerned about the Roe versus Wade, to me, that was just part of the movement that states don’t want any responsibility, “We can’t take care of our problems, it’s a federal government who has to do it, they have a money machine, they have a taxing authority”. If you look at the coming together of our 13 colonies, that is not what was intended, and I think it’s a bad move going in that direction. Because if you care about people, and if you have a humanitarian instinct, you have to be concerned about how do you create wealth. And, right now, we’re destroying wealth. Our country is poorer, we have debt, we have 15 trillion dollars of debt, 3 trillion dollars of foreign debt. We have to borrow everything we get from the Chinese. That’s what we have to be concerned about if we care about people. But the more regulations and the more printing press money and the more dependence on the federal government, the poorer the people are going to get and the more wars you’re going to get. Because once you reject the concept of the constitution and say, ” Well, yea, I know the government didn’t say we should be able to run the school system, but we’ll do it, we’ll just ignore the constitution” so you go to war without a declaration of war. So our Presidents go to war anytime they want and they don’t even ask us, they ask the United Nations. Just think, we just put troops over in Australia. Why do you want to pay money to send troops to Australia? They say, “Oh, because we need to fight China”, they’re ready to have a trade war and a hot war with China and get involved in their battle over their sea lanes over there and property rights and disputes that they’ve had going on there for 30, 40 years. And we’re getting involved. So I’m just trying to get this thing back into perspective and get some priorities.

Interviewer: The last time I checked, the Deficit Committee wasn’t going too far. But you’ve said that the committee had an impossible task and what the job at hand here is not to carve small bits of money here and there, but to reshape the responsibilities of the federal government. Now, aside from just talking about that , how do you actually make that happen?

Ron Paul: To get it back in order.

Interviewer: Yea.

Ron Paul: You have to change the attitude of the people on what the role of government ought to be, it’s not difficult if you have a proper role for government. But if you think the proper role for our government is to police the world, go into nation building, and that we have the authority to start preemptive wars, no. As long as the American people do this, that cost is going to be so high, you can’t do what I want. Nor can you do it if you believe that the federal government is able to provide any need for anybody that ever needed anything, and forget about production. So the proper role of government is there to provide the environment, the conditions, where people have the incentive to work and create wealth instead of chasing wealth away. Have a sound currency and these things. So if those attitudes aren’t changed, it’s impossible. What I’m saying is, it’s not impossible if you change your mind about what we have to do. It’s not so much as you change your mind and invent something new, all we have to do is go and look at something we take an oath of office to uphold. It’s so clear, it’s small and sure, it’s the constitution. But nobody in Washington cares about it.

Interviewer: Why not?

Ron Paul: Because the people want more stuff from Washington than can be provided under the constitution, and they want to be in office, and they’ve been re-elected. That’s the reason. But, the big difference now is, something is stirring, they’re sick and tired of the Republicans and the Democrats. And that’s why you have occupy groups, that’s why you have Tea Party groups, that’s why you get anger on the streets; because it’s ended, the bankruptcy is here, we’re up against the wall. That’s why I said, under these conditions, there’s no way that Congress is going to do it. So we have two choices, either go my way, or this thing is going to come very much unglued, we will have a financial crisis that will make 2008 look like a picnic. Because the currency crisis that’s coming and the breakdown that’s happening in Europe, I mean, this is going to be horrendous. So that is why it’s so important that we make this decision, this is why I’m begging and pleading people to look. It’s not brand new, it’s what made America great, it’s the free market, it’s the free society, it’s individual liberty where people do what they want and don’t have the government telling us every single day and every single minute how we should run our lives. And the government is just involved in every little bit we do, we have no privacy left, we have this PATRIOT Act that takes away all our liberties, and there’s no real economic liberty, no personal liberty. And we have this runaway spending and involvement overseas, every single day there’s another war getting started. The wars are going to expand in the Middle East, I mean, right now it’s Syria, it’s Iran coming, Somalia, Yemen, Libya and Egypt, and things are getting very, very chaotic. We don’t need to be in the mess of that, we need to be taking care of ourselves.

Interviewer: If somebody were to fly some planes into some buildings in the U.S. today, somebody who’s in another country, and you found out who that person was, would you go after that person?

Ron Paul: Sure.

Interviewer: And bring the military along with [you]?

Ron Paul: I voted for the authority to do exactly that when we went after the Al-Qaida.

Interviewer: And so there are military engagements that are … ?

Ron Paul: Of course. That’s one of the very few explicit requirements in the constitution: to provide for a national defense, so that’s what you must do. But what’s wrong, though, is if you use that as an excuse to do something else that you wanted to do and is unrelated to somebody flying into our building. Iraq had nothing to do with flying into those buildings, and yet that was just the excuse to go in there for the nation building of all these countries. It had nothing to do … matter of fact, it’s making our conditions much worse. Matter of fact, the Al-Qaida is now in Libya, there’s chaos in Egypt and we bribed the Egyptians for all those years to behave themselves, and then their government gets overthrown and the wars and the conflict in the Middle East are expanding. I mean, we literally have driven the Iraqis into the hands of the Iranians, the Shiites are pretty much getting along better. So all that killing and destruction … and now there’s more Al-Qaida in Iraq than there was before we started. But the end result is going to be that the Iraqis are going to be much closer to the Iranians because they share the Shiite religious beliefs.

Interviewer: You’ve mentioned this failed foreign policy several times before, and you mentioned that if you can find a specific bad guy. Like Jim mentioned, if we had somebody that crashed planes into a building here today, and you could identify who that person was that was responsible, or that entity that was responsible, that you would go after them and possibly employ military power. But, in the past, you’ve also indicated that you believe that 9/11 occurred as a result of foreign policy that was being practiced by the United States prior to the attack.

Ron Paul: I said it was an influence.

Interviewer: Right. And can you just sort of elaborate on that and talk about how you would maybe use diplomacy or other methods to address some of the issues that …

Ron Paul: Of course, my views are shared by many others, like our Department of Defense, our CIA, the 9/11 Commission. Paul Wolfowitz made a very strong statement about that and he said, “Now we better get our base out of Saudi Arabia”. It had been there for 15 years, and he admitted our base in Saudi Arabia was a strong incentive for Bin Laden to recruit Al-Qaida members. I mean, I’m not inventing these things, that is just the way it is. And you asked what would I do?

Interviewer: That the foreign policy that we were practicing instigated 9/11. What different approach would you take that led up to that?

Ron Paul: Oh okay. The different approach would be, I wouldn’t be in the Middle East, so I wouldn’t have had bases in Saudi Arabia. And you talked about diplomatic things, what you can do. Well, there’re diplomatic things that we could do. One of the examples I use is, nobody wants to talk to the Iranians, that’s evil, you can’t do that because they’re bad people. But we talked to the Chinese, we talked to the Soviets and they had nuclear weapons and they killed hundreds of millions of their own people. I was drafted in 1962 during the Cuban crisis, and I was pretty glad Kennedy called up Khrushchev, who said, “Well, I have missiles in Cuba because you have missiles in Turkey”. And Kennedy said, “Okay, I’ll take them out”. So they had a deal and the whole thing ended and they took the missiles out of Cuba. So I think we should practice some diplomacy. But the foreign policy should change. George Bush had it right in the year 2000, he said we should not have an arrogant foreign policy, or they will strongly disapprove of what we do. And we shouldn’t have nation building and be the policeman of the world. So that’s the approach that we should have, the foreign policy should change, we should be willing to talk to people, and I mentioned the fact that we have nearly 12,000 diplomats, what’s wrong with using a couple of them before we go to war. They say that nothing is off the table when it comes to Iran, except diplomacy. Nuclear weapons are on the table, but diplomacy is not, they won’t talk to anybody. So I think a little bit of common sense with bringing our troops home would make us so much safer.

Interviewer: If you were sworn in President today, and Israel, obviously one of our top allies, felt compelled, for whatever reason, to make a military move against Iran, what then would you do? Do you feel like it sort of forces your hand, or what would be your response to one of our top allies …?

Ron Paul: Well, we don’t even have a treaty with Israel, so I don’t know what “forcing my hand” would do. I mean, when they did that against Iraq in the early 1980s, I was in the Congress and there was a resolution to condemn it, and I didn’t vote for it because I think Israel inadvertently has put themselves into a corner because they depend on our money, so we’re their boss. If they want to bomb somebody they have to ask us, if they want to have a peace treaty with somebody, they have to ask us. So they’ve lost their sovereignty in many ways. So if they want to bomb Iran and they ask me what my advice would be, I’d say, “It’s a lot like committing suicide because it makes no sense. But if you do it, that’s your business”. But to assume that they should do that and I should send these young kids over there to die for that, no, I don’t think so. It’s so unnecessary. An attack on Iran right now would be … there’s a split in Israel over this issue, their intelligence sources are strongly opposed, a lot of them are. And our generals, some very well known generals, are very much opposed to something like that. And I think it would be very devastating. If I were President, I certainly wouldn’t want to participate in any of that, but I wouldn’t assume control over other people. I think, in a lot of ways, we’ve jeopardized Israel because we sort of bribed Mubarak, we’ve been giving him a couple of million dollars since about 1978 or 1979, and it didn’t work. Yea, it worked while he was getting the money, but finally the people hated him enough and they threw him out. And now there’s going to be a government that’s much more hostile towards [Israel]. And I think it makes it very unsafe for them because of that, because we prop up dictators.

Someday I’m sure that they’ll get rid of the King in Saudi Arabia, that’s a ruthless dictatorship. Everybody is bad or worse than the Iranians, but [the Saudis] are our best friends because they have oil. See, what we do is we divide the people against the government when we prop up the government, we’re doing this in Pakistan right now. We bomb over there trying to kill some bad people, and then we have mistakes made and we have collateral damage and it upsets the people, I wonder why. So they get mad at their government because we’re friends with their government, and we give money to their government. So there’s an example where we both pay the government to be our friends, and we’re bombing, trying to kill some bad people in that country, killing innocent people, and they’re getting angry with us. So that just stirs up resentments in the world. One other thing on what could be done, and I talked about this right after 9/11, is that declaring war is pretty difficult when it’s a band of criminals that can do this, and not a government. So if that would happen again and we knew there was a group of 200 or 300 people, I’d like to get people to think about the Letter of Mark and Reprisal, which they used in our early history when they would give authority to private sources and others to go after individuals like that rather than declaring war against a whole government. Right now, we’ve declared war against a tactic worldwide, which means that our government can go to war anytime anyplace it wants to without congressional approval, unless that’s changed.

Interviewer: Let’s return to a matter of domestic concern here. You’ve talked about the importance of letting the marketplace having its freedom to move. The subject here is campaign finance, and the disputes are, on one side, that donations should be made freely without limit to as many people as one wants to make. And the arguments on the other side are that by allowing such practices, the rich will rule and all others will not. I hope I’ve defined it clearly. So is there a role for government regulation of campaign finance?

Ron Paul: Not unless you change the First Amendment, because you have a right to petition your government. Let’s say you think a lot about the First Amendment, and you go to Washington and you want to spend a million dollars to protect your First Amendment rights, and I want to limit it and say you can’t do it, I think I’ve violated your right to petition your government. So I would say yes. The problem is, if you have unethical people in Washington who are susceptible to the bribery of big donations, that’s a problem, get rid of those people. But you say, “No, that will never happen”. Then you have to get rid of the system the gives us a government that can give out so much and has so much control and so many benefits and the regulations: “I’m going to regulate this guy against this guy, put him out of business to help him”. So as long as the government is involved in the redistribution of wealth, taxing one group and bailing out somebody else, you’re going to always have that incentive. The regulation of the way you spend money is just very superficial, I mean, I’ve been there a long time and nobody bothers me, nobody comes and asks me for anything and nobody gives me any money because they know where I stand. So I think the problem is inherent in the system and the kind of people we have, it’s a system where the government is way too big and they have too much power. But to say that because the system is flawed, I should regulate your right to defend what you believe in, would be wrong. You should be able to spend any amount of money you want to defend the part of the constitution you believe is worth saving. So, I don’t think that we should. Let’s say I’m a corporation and I’m spending more money than you might think I should lobbying in Washington, influencing politicians and all. Okay, let’s say all these corporations can’t do it, but what about the corporations in the media? Would it be on a TV station, would it be on a newspaper? All of a sudden, you get more power. So I’m taking my opportunity to spend money down in Washington, you take that away from me, but if I have a TV station, all the information comes from that corporation, how are you going to regulate that? They say, “Well, we’re going to regulate time, we’re going to make you have balanced time”. Yea, sure.

Interviewer: That’s been rejected long ago.

Ron Paul: Yea, but they keep talking about it, they want it to come back. So what you do is, if you deny one group the right to lobby and petition the government, you might give more power to another group, and that wouldn’t be fair.

Interviewer: You talked earlier about needing to change the expectation of what the government does or should do, and if you were President, that’s how you would make the changes. But if you were elected President, you’d go to Washington and you’ve still got essentially the same Congress plus or minus how many people may change in this election, you’ve still got the guys who are taking money from special interests, you’ve still got all the lobbyist, you’ve still got millions of Americans who may not want to change the things you think need changing because they get from Washington, they get welfare, they get Social Security, and whatever it might be. So what concretely can you do to make those changes?

Ron Paul: Well, the plan I’ve written down and talked about on the budgetary change, everything I have ever talked about, I have a transition for. Even on monetary policy, I don’t want to close down the Fed. Even though I want to end the Fed, I wouldn’t close the Fed down in one day, I want to legalize your right to use constitutional money. If you use gold and silver today, you can go to jail; I want to legalize [using gold and silver]. I want to make sure it’s legal always for you to have private schools if you want to and never have the government prohibit you. So I always want to have competition. In medicine, instead of moving in the direction of forcing everybody into a government system, I want you to always have a right to opt out of it. So there is a transition; education is that way, medicine is like that, monetary policy is like that. But, how do I get there? First, if elected, the sentiment is certainly going to be different than it is today, and you will have a type of bully pulpit because the people will have endorsed what I’m saying. There will be new members of Congress, there were new members of Congress last year. The conditions are going to get different, and you do have to work hard, you’d have to work and persuade people. Out of necessity, they’re going to have to do something, because otherwise we’re going to have this horrendous crash. I want to cut a trillion dollars in the first year, because I think the debt is a problem, bigger than anybody else [thinks]. Nobody in Washington thinks that debt is a problem, because they’ve been taught for 70 years that deficits aren’t bad. Liberals and conservatives say deficits don’t matter. But they do, and the debt is the reason we can’t get growth again. So I want to cut a trillion dollars, and they ask, “Where are you going to cut it from?” Well, I’m going to cut 500 billion dollars from overseas spending. And where should I get most of my support there? From liberals, it won’t be the conservatives. And I also want to cut departments here in the country and get another 500 billion dollars. Doing this is the only way I think you can save the care for the indigent, the poor, for medical care, and the elderly. Because we’ve robbed them blind, there is no money, the Social Security money has been spent in these deficits and in these wars. So if you do that, yes, you could work your way out of it, you could take care of the people who truly need it. But you can’t do it if you keep doing these things, so I’d have to have coalitions. You won’t get everybody to agree with everything I’m saying, but why can’t you get coalitions. Conservatives would endorse these cuts, liberals would endorse these cuts, hopefully they’d both endorse civil liberties, protection of individual rights and privacy and these sort of things and move in that direction. But I’d be the first to admit, it’s not going to be easy. All I know is, if you don’t do something, the other alternative is not good, is not good at all.

Interviewer: We’ve got about 5 minutes left and I’d like to leave it to you. I’d like to let you start off with on a comment on what President Obama has done that is good, just pick one or two things.

Ron Paul: I was asked that question before, I had a little trouble and then I came up with something. It’s not very much, but there wasn’t very much that George Bush did good, either, so if you’re picking on anybody … No, government has gotten bigger, the spending has gotten worse, the wars have gotten worse, protections of civil liberties have [gotten worse]. All I know is, the one thing I voted with him on was gays in the military, so I supported him on that and that was a protection of civil liberties, the “don’t ask don’t tell” program. But basically, no, I’m not running against [Obama], I bet you’ve never heard me say that; well, I guess I could. A lot of people are ‘running against Obama’, but I’m running against a system that got off track many, many years ago because we have gone in the wrong direction economically, we don’t have any respect for civil liberties, and we have a foreign policy that is a disaster and for nearly a 100 years we’ve been drifting down. But we met a point 40 years ago when we said there would be no limits on deficits and no limits on printing money and no limits on the size of government. And that was the last linkage of the dollar to the gold standard. And all you have to do is go back and look at any economics chart, they go along like this: debt, size of government, bureaucracies, regulations, the whole works skyrocketed because there are no restraints on the politicians. And the politicians know that the best way to get reelected is to come in and say, “What do you guys want, I’ll do anything you want, I’m going to vote for it because my responsibility is to deliver the pork to my district” and they got away with this for all that time. But it’s ending, it’s all over, and the Tea Party people know it, the people on the streets know it, the people who want more stuff know it, because they’re getting very worried.

And that’s what I run against: the philosophy of government. I believe that the limitation of government power in our constitution is good, I believe that markets work better than government planning and interventionism and wellfareism and warfareism. And this is something in which the mistakes have been bipartisan, and I think that we’ll have to make a decision, we don’t have any choice in it. We cannot maintain the status quo, which is the way we have been for the last 30, 40 years. Our standard of living has stayed about the same, but it was all on borrowed money. But we’re much poorer than anybody realizes. … I’m optimistic about the way they’re going, because in spite of it, there are a lot of young people I talk to, and a lot of college kids I talk to, and they know exactly what’s going on, and they don’t like what they’re getting. They say, “Oh yea, but didn’t we give them low-interest loans so they can get a college education, hasn’t that been wonderful?” Yea, give them a college education, the costs skyrocket, the quality of education goes down, and they don’t even have a job. They know there’s a problem. I tell young people they can get out of Social Security even with my program that I designed. If they’re 25 years or younger, get them out and work our way out of this thing. But you can’t do it with the current belief that government is all things to all people. It’s just illogical, you just can’t print wealth with a printing press or a computer, that is a fallacy and we’re seeing the end stages of a 40 year experiment that never has happened in the history of the world. We have never faced a worldwide financial crisis like we’re having now. Because we’ve had globalism and global currencies and everything, but never have we had a fiat paper currency that was the reserve currency of the world last for 40 years like this. And we’re seeing the climax of it. I hope to make a difference.

Interviewer: Congressman, if I could just ask one thing. You’re passionate in your views, and you seem to be equally critical of both parties. Given the importance you attach to your views, if the Republican Party doesn’t nominate you, will you be continuing with your campaign afterwards?

Ron Paul: No, no way. I have no plans to do that. But, it’s sad, because one of the reasons why we’re over in the Middle East is because we’re an exceptional nation, we want to go there and tell them how good we are and how wonderful we are, and they can have elections. We do that, we die, we go broke, and sometimes they have elections and if they don’t come out the way we wanted, we stick it to them, we just totally ignore them. And yet, here at home, we don’t have real democracy. If you do come to conclusion, which many Americans have, there’s no difference in this state. Obviously, there are more independents than Republicans and Democrats, separately. Most people are independent because they’re tired of the parties. But if you go into a party other than the Republican Party or Democratic Party, you can’t get on the ballots, you don’t get interviews at newspapers, you don’t get in the debates. At the same time, we do this overseas and then we look at the way we treat competition here in politics. I think it’s a sad story.

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49 responses to “Ron Paul: Bernanke Will Destroy the Middle Class”

  1. Dylan Ivins

    where does a montanan like me go to get ron paul shirts, signs, etc.. not many people here know what ron paul is about nor do they hear him due to the media. but im a huge supporter. PLZ HELP OR MESSAGE ME. I WOULD LOVE TO ACQUIRE SOME ITEMS TO PUT AROUND MY COMMUNITY.!!!!!

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  2. bumpNhump7

    where does a montanan like me go to get ron paul shirts, signs, etc.. not many people here know what ron paul is about nor do they hear him due to the media. but im a huge supporter. PLZ HELP OR MESSAGE ME. I WOULD LOVE TO ACQUIRE SOME ITEMS TO PUT AROUND MY COMMUNITY.!!!!!

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  3. joseph maddux

    they luagh becouse they dont like the truth

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  4. joseph maddux

    they luagh becouse they dont like the truth

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  5. Laser Maniac

    Vote up if your brain hasn’t been decimated by drug usage.

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  6. LaserManiac36

    Vote up if your brain hasn’t been decimated by drug usage.

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  7. mrmadicbm

    Rock paul is a terroist lover, no wonder hes losing so bad, America will never have a coward with a big yellow stripe down hes back ruling the place.. ever.

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  8. leddsaliva

    Can you imagine any other GOP candidate answering questions like this? and not getting roasted by journalists?

    I thought not.

    Ron Paul 2012

    »crosslinked«

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  9. MrLivePositive8

    I am and I will.

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  10. MrLivePositive8

    Really? I wanted to visit Romania too. Travelling does not seem like a wise decision right now.

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  11. chrisdunn421 .

    Im a felon from a long time ago. I COULDNT vote and honestly didnt care. Ron Paul has inspired me to get my rights back. My vote for RON PAUL will be the first one Ive ever cast. Ron Paul for president…and most awesome person in the galaxy!!!!!

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  12. chrisdunn421

    Im a felon from a long time ago. I COULDNT vote and honestly didnt care. Ron Paul has inspired me to get my rights back. My vote for RON PAUL will be the first one Ive ever cast. Ron Paul for president…and most awesome person in the galaxy!!!!!

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  13. Adrian de Heer

    It is all very well, this lecture of dr. Paul. But what about Chris Powell’s (www.GATA.org) comments on this? Is he not very right, that this was again a missed opportunity for dr. Paul?
    ” (…) Paul could have asked: Exactly what are those gold swap arrangements? What are they for if not surreptitious intervention in markets? How do they work? Have they ever been implemented? Why must they be kept secret?

    And Paul could have asked Bernanke about the Fed’s many other gold secrets, acknowledged during but carefully preserved against GATA’s lawsuit against the Fed, secrets whose locations were specified by U.S. District Judge Ellen Segal Huevelle in her decision in the case a year ago:

    http://www.gata.org/files/GATAFOILawsuitRuling-02-03-2011.pdf

    Paul could have cited the judge’s decision and asked Bernanke: Why all these secrets about gold? And will the Fed provide the committee with the documents at issue? If not, why not? What are you hiding from the American people and the markets, and why?

    But it didn’t happen, as it hasn’t happened at any of the dozens of other hearings where Paul has been allowed a few minutes to question Fed officials.

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