Interview: Ron Paul – Hey Fed! it’s The Free Market, Stupid, Pt I
Mandeville, LA – Exclusive Transcript –(Editor’s Note this transcript was taken from the Mike Church Show of January 31, 2014 and originally Published on: Jan 31, 2014) “In 1971 it happened, and that’s when I started speaking out [about the Fed.] Really nobody listened. There were a lot of seeds planted about sound money, especially by Murray and others, and Mises. They talked about this. There was no audience out there. I would go to campuses, when I first went into Congress, and I would get 20 or 30 people come out and maybe convert one or two.” Check out today’s transcript for the rest…
Begin Mike Church Show Transcript Mike: Let’s go to the Dude Maker Hotline and say hello to our dear old friend, former congressman now turned super citizen, Ron Paul. Congressman, Mr. Paul, all of the above, how are you, old friend?
Ron Paul: Doing well. Nice to be with you this morning.
Mike: It certainly is. We nominated and now we’re going to install a new chief of the Federal Reserve, something that you have not only fought to pull the curtain back for people to see what’s really going on here during your entire congressional career, and as a private citizen still fighting for it, not only have you done that but you wrote a book about it called End the Fed. If folks have read End the Fed, they have gained some serious insight into what these guys are really doing. I just wanted to set this up for you so you can swat this one out of the park. I am reading Murray Rothbard’s Origins of the Federal Reserve, at the same time I’m reading certain chapters of Creature from Jekyll Island. My question to you, Ron: How do you keep this knowledge of what actually transpires in that organization in your head and maintain your sanity for all these years?
Paul: That is a challenge. Obviously it’s rather frustrating at times. I look at the positive side. I would say we’re making great progress. I got enthusiastically involved in the early ‘70s when the predictions of the Austrian economists like Murray and others during the ‘60s said this whole thing, this pseudo-gold standard, that Bretton Woods was going to break down. I believed them and they were right. In 1971 it happened, and that’s when I started speaking out. Really nobody listened. There were a lot of seeds planted about sound money, especially by Murray and others, and Mises. They talked about this. There was no audience out there. I would go to campuses, when I first went into Congress, and I would get 20 or 30 people come out and maybe convert one or two. It was a long haul. I figured one person at a time. I never really expected a whole lot more.
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During the presidential election, because of the financial crisis which coincided, all of a sudden the Fed became an issue and we were starting to get bits and pieces of information out. We had the internet and talk shows like yours coming about. Information got out there and now there’s an explosion of interest, to the point where we had the Audit the Fed Bill pass twice in the House, partially for political reasons because there was a political support for it among the people. Even Romney put it in the platform because he knew it was politically popular. I look on the positive side. I think the information is out there and it’s growing. They’re going to self-destruct. I think Keynesianism is going to end and the paper money system will have to be revamped. My concern is that we have to beat the internationalists. They know what’s going to happen, and they’re preparing for an international paper standard run by the IMF and the World Bank. They want total control. That would be very, very bad news. I think the movement is for competing currencies and for gold. You see competing currencies coming about on the internet. I think there’s room to be cautiously optimistic.
Mike: In your time in the United States House of Representatives, let me just ask you a candid question, how informed do you think your average colleague was in the House — certainly the Senate is the only body that actually gets a vote on someone like a Yellen on a chairman of the Fed or Treasury secretary, but certainly the House has a role in this. How educated, how well educated is the average member of the House about what the Federal Reserve is really doing behind those closed doors?
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Paul: I think you have to assume that 99 percent of them have been educated in a government school, with grade school, high school, and even our colleges. We have been inundated with a system about money and credit. I think Nixon summed it up. He said “We’re all Keynesians now” when he closed the gold window and went to a total fiat money. No, that’s where they are. The people, once again, are waking up. There are only a few in Washington. There are differences of opinion, but it’s almost like management style. It’s sort of like in foreign policy. They’re all interventionists, but some want to intervene more and more viciously than others, but everybody in Washington assumes we have to be there, so they argue over management style, and if we can accuse the other side of doing something wrong or mismanaging things. Monetary policy is the same way. They all believe in inflation. They all believe in its power. They all believe in serving the bankers. I think it’s a convenience for the members of Congress to be ignorant of this. They’ve been taught this. The Fed accommodates the Congress. Congress spends money and they don’t have to worry about who’s going to pay the bills. They don’t have to borrow the money. The Fed will pick up this bill and print the money.
Mike: That’s exactly right. Former Congressman Ron Paul, who is now, as I said, super citizen Ron Paul, who is Ron Paul TV, Ron Paul homeschooling program — our good mutual friends Thomas E. Woods is working feverishly to complete the videos. He’s working hard to complete the videos. Just a follow-up on something you said earlier. I have not gotten to ask you this question, and I think you’ll enjoy answering it. Can you explain to the average listener of the Sirius XM Patriot Channel and whoever reads this transcript, when you say “competing currency,” can you just give us a one- or two-minute overview or synopsis of what you mean and kind of how that would work?
Paul: Well, it would legalize competing currency. If you and I had a silver dollar standard, we could do that. Some people have tried that and, of course, they can go to prison over it. The Feds come down hard on them. It’s just sort of legalizing choices. In medicine it would be instead of having everybody go under one medical care system, you can always have a right to opt out. Education, we should always have a right to opt out. Unfortunately, we shouldn’t even have the government involved in some of the nonsense. It’s just trying to get the right to opt out instead of saying: We can wave a wand and get bad of all the bad stuff. If they just allowed us our freedom of choice, and in money you can do this. Of course, Hayek talked about competing currencies. He talked about a basket of commodities, which I’m indifferent to. I think people can use anything they want for money. Now they’re using bitcoin and other things. I don’t understand that enough to make a concrete assessment of that. It should be legal. People should be able to use it. They should be prohibited from using fraud and engaging in fraud. This would keep the government money people on their toes. It wouldn’t be use of force. It would be in place. There may be a gradual shift. That’s sort of the position I take in end the Fed as well as the case for gold many years ago. That would allow the transmission. What would be so astounding is if we could just use old American silver dollars that were minted by the U.S government and called legal tender, but it’s illegal to use them. The whole thing is absurd. If you and I started exchanging silver dollars and calling them dollars, all of a sudden it raises a lot of questions: What is a dollar? It’s an ounce of silver or whatever. No, that would be illegal, and then the IRS would be on us: Are you calculating this? I want to denationalize in the sense that you can’t tax money. If we had a gold standard and you held silver and all of a sudden it went from $20 to $40, you have a capital gains tax. They would tax your money. That would be wrong. You have to de-tax it. You can’t have sales taxes and you can’t have capital gains taxes on money in order for it to be true and competitive.
Mike has interviewed Senator Rand Paul on numerous occasions from his early days as a Senator to his famous filibuster, it’s all here at mike church.com
Mike: A great explanation. Let’s expand another earlier point that you made, and another thing that I think in the education of our fellow citizens is equally important. It’s really hard to follow how it is that the Federal Reserve — Janet Yellen takes over tonight as chairman, at midnight. Bernanke’s coach turns into a pumpkin, and then the pumpkin turns into a coach in front of her house. The average citizen, it’s very difficult to explain concisely how it is that the Fed makes it possible for Congress to run the debt up. Can you help me out here? Help me explain to the listener how they do it and why it is so dangerous to continue doing it.
Paul: I’ve always called the Fed a facilitator. It facilitates what Congress wants to do. If we did not have the Fed to monetize or create money out of thin air to buy treasury bills, what would happen? Congress would spend too much money, they would be in debt, and they would have to borrow. But people would get tired loaning us that kind of money, $1 trillion a year. There aren’t going to be that many lenders out there. So interest rates would go up. The management of the economy, higher interest rates are very damaging. Of course, in the free market rising interest rates are very, very important information to tell us what’s going on, that there’s not enough production and not enough savings, so you have to quit spending money like it’s going out of style and creating all these bubbles. If the Fed couldn’t buy that debt, interest rates would rise, and the politicians would have to back off. They couldn’t just keep raising this debt limit. In a way the people are guilty, too. The people haven’t given up their appetite for their goodies. There are nearly half the people now that would like to go on their own because they know there’s no advantage to this and they have to produce. More than half the people are probably getting a check from the government and they don’t want it to stop. It’s not poor people who want food stamps, even though there’s a lot of that; it’s the rich people who want food stamps and build weapons we don’t need, and the banks who want bailed out. It’s all a gimmick to take care of the very, very wealthy. One place where a lot of conservatives mess up on is they defend wealth, which we should as libertarians defend wealth, but there’s a big difference between wealth that comes from being in bed with the government and getting contracts from the government and benefitting from the Federal Reserve system versus people who produce wealth because they give us a good product. As Mises would always talk about, they’re voted as good entrepreneurs and we buy their products. If Steve Jobs gets rich because he didn’t cheat anybody but gave us good product, and we gave up our money voluntarily, that’s so much different than getting bailed out, the big banks getting bailed out by the Fed.
End Pt I, Don’t Miss Pt II