Scott Horton Interviews Rep. Ron Paul

Scott Horton, September 27, 2008

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As part of Antiwar Radio’s week long series on the economic crisis in association with the Campaign for Liberty, Rep. Ron Paul discusses the current financial crisis, payoffs to special interests and arm-twisting in congress to get the next 700 billion dollar bailout through, the role of the war budget in helping to inflate the dollar bubble, the difficulty in getting the media and politicians to understand Austrian monetary theory, how the Fed’s policies send false signals to people in business, leading to bad investments across various markets, necessitating a correction (recession) for prices to reflect reality again, the inflation/heroin junky analogy, the Fed bureaucrats’ inflated belief in themselves, his proposal to re-legalize competing currencies in the free market, the possibility of creating a new Gold Commission [.pdf], and some limited success in teaching congressmen some things about it.

MP3 here. (20:09)

Dr. Ron Paul is a Republican member of Congress, representing Texas District 14 and author of these great books.

16 Responses to “Rep. Ron Paul”

  1. A bail out will signal that Captaitism has failed.

    This is the wrong signal to send the world!

  2. Why don’t you call on the $2.500 billion that Israel owes your country?

  3. Paul you are our voice.

    It’s privatized gains for a few and socialized losses for the many.
    I have an idea. END THE TRILLION DOLLAR WAR and foreign policy of imperialism.

    US is setting itself up for hyper inflation, a monopoly-like consolidation of assets, and eventual collapse. They are now privatizing the bad assets they created with predatory lending and credit derivatives “investment vehicles” which had no realistic fraction reserve ratio ( it was like 30 to 1!) and pretty much no insurance because an unregulated security meant there was no damn collateral or reserve portion (deposits or whatever) to plug the hole should the borrower default. They defaulted because they were sub-prime to start with had no collateral and the Fed raised interest rates on the ARMs so duh now we have got a bunch of unpaid homes a slew of companies that bought the mortgages from the banks, and then a few insurance companies got locked in that as well which was compounded by short selling.

    John McCain has halted his campaign to go to Washington to deal with the financial crisis. But he was instrumental is starting the financial crisis with the “Commodity futures modernization act” of 2000. He says he want to spending while wanting to increase the biggest sink-hole of them all. Need money? End the god damn war. We don’t need this complex USSR style auction and robbery to “fix” this mess. “Hi, we’re government, we’re here to help” no thanks. Stop deficit spending and predatory lending.

    If loans are tight because they fear making more bad ones, but if they arbitrarily fix prices high on houses, regular people can’t get loans to buy them. So they will have an “auction” I just hope it isn’t a Yeltsin style auction. Once off the free market, the bogus assets will be sold for nearly nothing and the buyers will sit on it and sell it for far more once the market returns and the banks loan more money and release interest rates.

    It was low interest rate PLUS predatory lending.
    In leyman’s terms; about 26 thousand people have seen this 3 minute video I made http://www.youtube.com/watch?v=byebxE9k4vo

    When interest rates are low business people decide to build because its the best time to borrow money. However the borrower is supposed to have collateral for at least part of what he is taking. The lender is supposed to have some kind of insurance as well as some ratio (of deposits or whatever) to pay a big chuck should the borrower default.

    We had none of this. Rates were low, banks loaned to virtually anyone then sold those mortgages to companies who then couldn’t get paid because the FED jacked the rate up 7 times in one year making the people with adjustable rate loans unable to pay back what they had borrowed.

    A bail out is communist. State control of private property and industry is communism. http://www.youtube.com/watch?v=Gl27UziYXjE

    By the way on the FOX poll on who will come out the smartest ROn Paul is winning with 77% http://www.foxbusiness.com/

    Foreign Policy of Freedom pages 95-98 Paul talking about the run away credit back in 1999 and its amazing.

    Scott Thank you for having on Ron Paul and covering his new website. This movement is America’s only real hope.

  4. Ron Paul on the bail outs http://www.youtube.com/watch?v=1sfUKZOHtRs

    Ron Paul (he told us so) http://www.youtube.com/watch?v=atK4KgN0434

    Ron Paul on the CAUSE of bail outs with AIPAC’s Blitzer http://www.youtube.com/watch?v=sSNnembIJ_c

    Liquidate bad debt!!!
    End the War!
    Legalize competing currencies.

  5. What we call “capitalism” these days has failed.

  6. I admire Dr. Paul. I contributed to his campaign financially. I stood in a tent at a state fair on several hot, Alabama summer days shaking hands and handing out his literature. I drove around in the dark of night posting his signs. I walked for miles spreading word of the Rloveution door to door and at polling places. I earned my Ron Pauli credentials by backing a Presidential candidate more actively this year than I ever have before in my life.

    But …

    Although I also admire Lew Rockwell and Murray Rothbard, Rothbard’s theory of money is incredibly flawed, and his idea of a gold standard is too.

    If I want to be paid in gold, I can arrange that now. I can have my pay check sent directly to a gold dealer for the purchase of bullion at the market price. Of course, if my paycheck has a fixed dollar value, I would purchase differing amounts of gold each day, because the price of gold varies.

    When Paul discusses “being paid in gold”, he’s discussing a different arrangement, because he’s really discussing the terms of my employment contract. He means that I negotiate a wage in terms of units of gold, rather than in monetary terms reflecting ever changing market prices.

    I can do that now too. When I approach an employer, rather than ask for $30/hour, I ask for a gram of gold per hour. Of course, I then ask my employer to double my wage in dollars when the price of gold doubles, even if the market price of his goods and services vary relative to the price of gold, and I also accept a falling wage in dollars when the price of gold falls. Prices do vary in free markets. Prices are supposed to vary in free markets.

    I can also ask for five bushels of corn per hour, or I can ask for a wage that automatically rises or falls with the price of corn. A corn farmer might find this wage very agreeable, but other employers presumably would not.

    That said, I agree with Paul that our monetary system is incredibly statist and thus subject to the whims of politicians (including central bankers and corporatist executives); however, a gold standard is simply a fixed price of gold. The price is fixed by a state. A gold standard, per se, does not outlaw fractional reserve banking. It only requires creditors banking gold to exchange gold for bills of credit at the established price.

    A gold standard effectively limits extensions of credit by gold bankers in a way that might stabilize prices more generally, if gold bankers monopolized extensions of credit; however, gold bankers need not (and should not) monopolize credit. Why should corn farmers not extend credit by lending bills of credit redeemable in corn for example?

    Why should Walmart not extend credit in dollars redeemable in anything Walmart prices in dollars? More specifically, why can’t Walmart lend me Walmart gift cards requiring me only to return equivalent value in Walmart gift cards, plus interest, in the future?

    Walmart could even time stamp its credit/debit cards and imprint each card with a catalog including current prices, so a card sold (or lent) today entitles me to today’s prices. This time stamping would effectively limit Walmart’s distribution of cards, including its extensions of credit. Or Walmart might charge a lower interest rate rather than time stamping this way. It could sell (or lend) both types of card at the same time.

    I can’t support a statutorily fixed price of gold, much less a statutory monopoly on credit for gold bankers. I don’t support the “greenback” approach advocated by the following video either, but the makers of the video, while largely agreeing with Rockwell et al. about the dangers of central banking, understand that a gold standard is not the solution. A gold standard is not a free market in bills of credit.

    http://video.google.com/videoplay?docid=-515319560256183936&ei=6ajfSKNlk-6oAoGFzboH&q=money+changers

  7. Martin,

    Isn’t Paul’s position to simply legalize competing currencies, rather than mandate a govt. gold standard? Didn’t Rothbard, and doesn’t Paul, argue that gold will eventually win out in the market and as Paul said in the interview simply “overtake” (I think that was it) paper money?

    I’m confused, because it sounds to me like y’all agree.

  8. Paul does speak of competing currencies, but the reality is not so simple. The question ultimately involves legal tender. I have no fundamental problem with Liberty Dollars myself, for example, but will courts order my creditors to accept payment of my debts denominated in “dollars” using Liberty Dollars, and will the IRS accept payment of my income taxes in these notes? It’s fine to say that we shouldn’t have any income tax at all, but that only avoids the issue.

    No, I don’t think Rothbard agreed that bills of credit from gold bankers would win a free competition for money. As I understand Rothbard’s position, he would command a 100% reserve standard of gold bankers, but gold banking never operated this way, and I don’t expect gold banking, without a Rothbardian command, to operate this way.

    Gold bankers without a Rothbardian King commanding 100% reserves will issue bills of credit redeemable in gold exceeding their reserves, particularly if the credit is secured by valuable assets other than gold. If I bank $100,000 worth of gold, I may choose to issue $200,000 in bills of credit redeemable in gold secured by two houses worth $100,000 apiece, because I can always claim the houses and sell them for gold to meet the demands of holders of my bills of credit. The Proudhonists (the original “anarchists”) wanted banks issuing credit secured only by valuable labor, precisely because they saw an established, titular “nobility” practically monopolizing gold.

    But the real issue is taxes and other lawful debts. Precisely, how does Paul propose to distinguish lawful “dollars”, for the payment of debts including taxes, from unlawful “dollars”? “The market will decide” doesn’t address this question.

    I also have a problem with Paul and other “hard money” advocates saying that the Constitution requires only gold and silver as a legal tender. The Constitution clearly doesn’t say this. It only limits the States this way. It clearly does not limit Congress similarly. Whether it should have limited Congress this way is a separate issue, but I don’t believe it should have.

  9. The Constitution does state that Congress shall have the power to issue coin and regulate the value of money. [In coin or otherwise.]

    Unfortunately, this power was given away to the non-governmental financial elite in 1913, with the Federal Reserve Act, when then President Woodrow Wilson allegedly said afterward, “I have ruined my country.”

  10. We have all participated in the ruin. The general public bought into the “good life” mentality that was promoted after WWII. Houses, cars, boats, RV’s, whatever… all on credit. The industries that employed all of those workers are gone, shipped off shore to places where the labor is cheap… The free ride is ending and don’t think that the dimwits in DC have the answers. They don’t, because they were along for the ride all of the while.

  11. The financial elite are not non-governmental. They are part and parcel of the government. The bailout teaches this lesson again.

  12. Best regards to you, Doctor Paul, and here’s a handshake over the miles.

  13. Ron Paul mentioned that several small banks were doing fine and not affected by this crisis. Does someone know their names?

  14. BB&T Corp. is doing well, compared with Wachovia, according to the market.

  15. President Wilson is right, he did ruin our country by giving in to the tribalists who do not mean us well, and gave us the Federal Reserve.

    Congressman Paul is right to oppose the ‘bailout’ and to call for the abolitio of the Federal Reserve. Keep on, Ron. I know that I have got your back.

  16. Can I just say what a relief to find someone who really knows what theyre speaking about on the internet. You undoubtedly know find out how to carry a problem to gentle and make it important. More people have to read this and understand this facet of the story. I cant consider youre not more standard because you undoubtedly have the gift.

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