Jon Stewart: … welcome Republican Congressman from the State of Texas who also ran for President in 2008. His new book is called End The Fed. Please welcome back to the program, Congressman Ron Paul.
Audience: (Applauds)
Jon Stewart: Nice to see you again, sir.
Ron Paul: It’s good to see you. Thank you.
Jon Stewart: I have read many… this call end the Fed. I have read many politician’s books. They typically are a couple of apocryphal [ph] campaign, anecdotes, cut and paste from one of Churchill’s books. A little end with the American exceptionalism, God and faith. You seemed to have put a lot of thought and effort into this book and you call yourself a congressman. It’s usually you’ve been calling, you’ve been rallying against this type of government intervention, the Federal Reserve, for 30-35 years. Suddenly, the tea parties arise calling for a very similar type of thing. Do you feel like you were like a cool Indie band and somebody came in and like kind of stole your sound and then, by golly, he’s super big. Like how do you feel when you’re watching that development for the last eight or nine months?
Ron Paul: It’s scares the daylights out of me.
Jon Stewart: (Laughter). There goes the daylight.
Ron Paul: Well now, what has happened is that the concerns of how it come about, it’s not because I knew about this. I think good economic policy will tell us that these problems are here and everybody knows we’re in the middle of a big problem. We’ve have…
Jon Stewart: But isn’t we this way with Republican administrations, with Democratic administrations. It is a consistency not often seen.
Ron Paul: Right, my biggest concern is personal liberty and I’ve noticed over the years that both Republicans and Democrats have very little respect for personal liberty and therefore I’ve been fighting this and I want the government to be small. If the government is big, you have less personal liberty and you have to find out how they finance big government and they tax us a lot, but it’s not enough to pay the bills. They borrow a lot and that’s not enough and then there’s another method and it has to do with the Fed.
They have this little thing called the counterfeit machine and they just print the money when they need it. You know, you and I we’d go to jail if we did that, but the Fed does it in secrecy and they get away with it and the government keeps growing and you have runaway welfare spending and then on top of that, they use this to finance these wars that I think are so ridiculous. You know, undeclared wars, endless wars, good wars, long wars, and all kinds of wars with no end in sight. So I’ve put a lot of blame on the Fed because they monetize these debts.
Jon Stewart: We would be taken to jail if we print the money. And do they ever, you know, first of all, I was struck by what you said me going to jail for printing money.
Audience: (Laughter)
Jon Stewart: We have to make a quick call after the show.
Audience: (Laughter)
Jon Stewart: But it is interesting. You know, reading about the history of the Fed that you layout. Their policy is always talking about controlling inflation or preventing deflation, but it is always inflationary. It always seems that over years, they just print more money and you believe that it then creates an illusion of an economy rather than an economy.
Ron Paul: Temporarily, it helps. You know, if you borrow a lot of money. If an individual borrows a million dollars a month, they can live beyond their means until they have to pay the bills. What the government does, if they pay their bills through financial crisis, inflation, unemployment and all these kinds of problem, but one of their job was to have a sound dollar and steady prices.
Well, in 1913, when they started, they have a dollar stock, but it’s worth 4 cents right now. Most of us have four employment. True statistics now in the free market, where we calculate our unemployment per five person, 20 percent, so they haven’t given us sound money. They don’t give us steady prices. They say, “Well, we want to steady the interest rates.” Well, the interest rates are, in my lifetime, they’ve been 21 percent and they’ve been less than 1 percent, so they have failed in everything they’ve done. They have given us big government and they have helped in a significant way to undermine our liberty.
Jon Stewart: What do you say if somebody says, “But what is the answer in the absence of any regulation or in the absence of any controlling entity? Isn’t it anarchy? Isn’t there chaos? Before the Fed, the 1800s, would anyone choose that century as a model for stability, you know, economically?
Ron Paul: It would help guide us because we had significant growth for 30 or 40 years at the end of 19th century and we have a gradually decreasing prices. Actually, your purchasing power went up, but it was not perfect because we have they call benevolism. They fixed the price ratio between gold and silver and there were shortcomings and frequently State’s abuse, so it was imperfect, but the Founders knew about inflation. The destruction …
Jon Stewart: Well, you’re more Jeffersonian on this. You would say he fought against the Central Bank and you would say that he would make the right call. But who would fill that gap? You know, is government the only infringement on personal liberty? You know, because it seems like government also can provide a bore against tyranny, the civil rights movement in such.
Ron Paul: No.
Jon Stewart: Are there other things that infringe personal liberty in government?
Ron Paul: Oh, yes, all the time. Well, with money, the government should protect the value of the money and not destroy it. But yes, the government has an important role in financial issues. They should protect against fraud. For instance, Enron went bankrupt. The market said their stock was worthless and under State Anti-Fraud laws, these individuals were prosecuted and put in jail. You didn’t need more regulations. You have to have anti-fraud laws. But it’s hard to enforce fraud laws when the government participates.
Jon Stewart: (Laughter)
Audience: (Laughter)
Jon Stewart: I’d really like this cast already. Extraordinary.
Ron Paul: Yeah, it’s hard to prosecute…
Jon Stewart: It’s hard to support fraud when the government is committing fraud.
Ron Paul: Well, what about Madoff. He deserves to go to jail, but you know, well, there’s a Ponzi scheme done in DC it’s a same situation down there.
Jon Stewart: Is that a failure though of a lack of oversight? I guess what I’m trying to wrap my head around is even a libertarian viewpoint would say that we need government to provide for the common defense.
Ron Paul: Yes, sure.
Jon Stewart: Who protects us from corporatism? Who protects us from… is it the corporate attack, maybe not as bloody as another country coming in, but isn’t it as necessary for the little guy to be protected from that by some kind of collective?
Ron Paul: Yes.
Jon Stewart: And some others.
Ron Paul: Yes. But to do this, it’s more about prevention than by regulating it. You caused all these harm and trouble and inflation.
Jon Stewart: Right.
Ron Paul: What you want to do is prevent it. The corporations have no right to come to government and get special benefits. The Halliburns [ph] wouldn’t exist in a libertarian society.
Jon Stewart: Right.
Ron Paul: And they get special benefits. It started early on, even with the railroads. I mean, they’ve got certain benefits. So corporations that makes money because you and I and everybody else buy their product. Business, good and bad and corporate profit reflects that they have given the consumer a good product at a good price, but if they’re big because they’re wheeling and dealing with the government. The bigger the government is, the more it encourages the lobbyists because then the incentive to go down there and control the government to get the benefits.
Jon Stewart: Has anyone try to, you know, in what you would call your ideal, has that been tried? Is there a country, is there a government that you believe approximated your ideal of a more sort of a liberty-oriented and economically and socially government?
Ron Paul: Well, we haven’t reached the ideal and we’re not likely to, but I think our country started off pretty well. You know, fairly well. They had the intention. They recognized property rights, sound money, and contracts and you didn’t have the right to destroy your neighbor’s property and so I think…
Jon Stewart: Oh, all right. I’ve got to make another call then. All right.
Audience: (Laughter)
Ron Paul: I don’t want to get you in any trouble.
Jon Stewart: Exactly. Thank you for writing this book. It is really thought-provoking and just really well written and clearly from the heart and it clearly comes from a foundation of belief that you know and awfully a lot about and how you’ve survived in government for eleven terms, I do not know, but thanks for being here. End the Fed is on the bookshelves now. You really should check it out. Thank you, sir.
Ron Paul: Thanks a lot.
Jon Stewart: Thank you, sir.
Why the Fed Loves Secrecy
by: Ron Paul
Last week I was very pleased that the Financial Services Committee held a hearing on the Federal Reserve Transparency Act, HR 1207. The bill has 295 cosponsors and there is also strong support for the companion bill in the Senate. This hearing was a major step forward in getting the bill passed.
I was pleased that the hearing was well-attended, especially considering that it was held on a Friday at nine o’clock in the morning! I have been talking about the immense, unchecked power of the Federal Reserve for many years, while the attention of Congress was always on other things. It was gratifying to see my colleagues asking probing questions and demonstrating genuine concern about this important issue as well.
The witness testifying in favor of HR 1207 made some very strong points, which was no surprise considering the bill is simply common sense. It was also no surprise that the witness testifying against the bill had no good arguments as to why a full audit should not be conducted promptly. He attempted to make the case that the fed is already sufficiently accountable to Congress and that the current auditing policy is adequate. The fact is that the Fed comes to Congress and talks about only what it wants to talk about, and the GAO audits only what the current laws allow to be audited. The really important things however, are off limits. There are no convincing arguments that it is in the best interests of the American people for anything the Fed does to be off limits.
It has been argued that full disclosure of details of funding facilities like TALF and PDCF that enabled massive bailouts of Wall Street would damage the financial position of those firms and destabilize the economy. In other words, if the American people knew how rotten the books were at those banks and how terribly they messed up, they would never willingly invest in them, and they would fail. Failure is not an option for friends of the Fed. Therefore, the funds must be stolen from the people in the dark of night. This is not how a free country works. This is not how free markets work. That is crony corporatism and instead of being a force for economic stabilization, it totally undermines it.
If the Fed gave its actual arguments against a full audit, they would not have mentioned anything about political independence or economic stability. Instead they would admit they don’t want to be audited because they enjoy their current situation too much. Under the guise of currency control, they are able to help out powerful allies on Wall Street, in exchange for lucrative jobs or who-knows-what favors later on. An audit would expose the Fed as a massive fraud perpetrated on this country, enriching a privileged few bankers at the top of our economic food chain, and leaving the rest of us with massively devalued dollars which we are forced to use by law. An audit would make people realize that, while Bernie Madoff defrauded a lot of investors for a lot of money, the Fed has defrauded every one of us by destroying the value of our money. An honest and full accounting of how the money system really works in this country would mean there is not much of a chance the American people would stand for it anymore.
