Who is Ron Paul?

Here is a new interview with Ron Paul from National Review Online, in which he talks about his new role as the chairman of the Subcommittee on Domestic Monetary Policy, where he will keep an eye on the Federal Reserve.

Some quotes:

Before two or three years ago, this could have never happened. It was only because of the crisis that the Austrian economists predicted came about, and people said, “Hey, maybe these guys are on to something.” I think that helped me get the job, because I’m really not mainstream in the House here. But now people are looking for alternative answers.

The Fed will end because the system we have is not viable. All printing-money systems always end. So my goal in the book as well as in the committee is to expose the Fed for what they do, how important it is economically, why they don’t achieve what they pretend to achieve, and why they need to have more transparency. I would just like to legalize competition, legalize the Constitution, and allow people to use gold and silver as legal tender. And then if people don’t like the paper money, they can start using gold and silver in savings accounts or spending or whatever. Today if you do that, you go to prison.

Not many people think there’s going to be a wave of Communism in the world in the near future, because the collapse of the Soviet Union was a major historical event that proved that radical socialism does not work. And I think what we’re witnessing now is the conclusion that Keynesianism doesn’t work either, that the money, inflationism, corporatism, regulatory systems run wild, spending, and deficits — all that stuff is failing. And that means that now people are looking to the Austrian school that says we should have sound money and balanced budgets and no government regulation of interest rates or regulation of the money supply.

I see the arbitrary regulations of government as a major cause of our problems. Many people ask me, “If you’re not for regulations, how do you control things?” Well, in the marketplace, there are a lot of market regulations — and you don’t have the moral hazard of a government guarantee. If you mess up, you go bankrupt. In free-market banking, for instance, the directors who set up the bank would be personally liable if it went bankrupt. Can you imagine how much more cautious they would be? They wouldn’t be making all these wild loans and responding to the regulators saying you must make certain bad loans to people who don’t qualify.

So far, we’re doing exactly the wrong thing. We had the recession come because of too much spending, too much debt, too much taxing, and too much regulation. And so we’re trying to solve the problem by spending like crazy, regulating like crazy, printing money like crazy, and taxing. And then they wonder why things are getting worse.

Nobody wants to make interest rates very high, deliberately. But the low interest rate misleads the businessman and makes him think there’s been a lot of savings, and therefore it’s proper to have more capital investments. And that’s why they overbuild in various areas. And these moneys flow into the various areas — sometimes into asset bubbles, sometimes into housing, sometimes in raw property or whatever. They help create bubbles that have to pop at some point. I want market interest rates. We don’t have enough confidence or understanding of how the market works in this country to set interest rates, and thinking we do is how we’ve gotten ourselves into trouble.

It’s wrong to deliberately devalue the currency, because prices go up and if your purchasing power goes down, then somebody is stealing from you. So to me, it’s theft. And they should never be allowed to do that. And the responsibility of government is to guarantee the value of currency. The Founders understood it clearly, they had had runaway inflation of the continental dollars, that’s why they said you cannot admit bills of credit, no paper money — we totally ignored that and it’s one of the major reasons we’re in the mess we’re in.

Inflation goes from the middle class to the wealthy, and it is a tax, and the people don’t know about it. It’s invisible. That’s why they get away with it. Eventually the people wake up, and then it’s too late, and you get rampant inflation. Bernanke brags that he can turn off inflation in 15 minutes. He can’t. There’s so much money out there, which is going back into use — commodities are going up. This idea that there is no inflation is absurd. One thing they do is they want everyone to talk about inflation as the CPI. Austrians say that inflation is when you increase the money supply — sometimes some prices go up, sometimes it starts out in land, but eventually it can be everything.

My first step is to expose the Fed for what they’re doing, because they do it in secret. People say that “Congress will politicize the Fed.” Well, how could they get more political? When they help out their buddies at Goldman Sachs, that’s pretty political.

The welfare state encourages our people not to work, and so then we need workers. And when immigrant workers come in, there are welfare benefits, education, and Medicare for those who come who are not legal. If there wasn’t that, I’d be pretty generous with illegal immigration.

I want immigration to be legal, but I would argue that there should be no federal mandates to provide services for illegal immigrants. Maybe immigrants would go back, then, to their families, on their own. I think it’s virtually impossible to send back 12 million people, but I don’t think we should give them citizenship.

As long as the American people encourage Congress to have a military-industrial complex, we’re going to further bankrupt us. But I believe we cannot deal with the budget deficit without dealing with the excesses of the military.


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13 Responses to Who is Ron Paul?

  1. Polymath says:

    Paul says:
    I would just like to legalize competition, legalize the Constitution, and allow people to use gold and silver as legal tender. And then if people don’t like the paper money, they can start using gold and silver in savings accounts or spending or whatever.

    Here is a paper which explains one way that might actually come about (Thanks to commenter Anonymous Crab for bringing this to my attention).

    Ending the Fed

    RV analyzed this situation for me a while back as follows:

    I agree with the abysmal failure of the Fed. It needs to be abolished. The problem is that ideally, the Fed is more efficient than the gold standard since elastic money supplies are good. The real issue comes with the fact that it is impossible for any governmental institution(and by all intents and purposes the Fed is that) to be independent. The charter of the Fed would have had them contract the money supply in times of recession and have the government do the right thing. Another problem of the Fed is that they really have no real targets. They don’t use inflation targeting or even the older, more obsolete versions like money supply targeting and so on. So, if you don’t want an abysmal disaster, it is either competing currencies or a commodity standard(what commodity it is is irrelevant, but gold has monetary value so it should be used as such). Now, I’d prefer competing currencies and have no legal tender, but this can increase transaction costs and the complexity of the financial system in such a way that it’s not worth it. I’m having mixed feelings about it, but naturally, I’d support competing currencies over a governmental issued legal tender. The real problem though comes from how will you pay your taxes? So I talked to a friend about this and he said that you should have a gold standard governmental issued currency for taxes and governmental problems and competing currencies otherwise. The competing currencies system introduces other problems in terms of accounting. So there’s no ideal – there are advantages and disadvantages.

  2. Gorbachev says:

    The Subcommittee has no actual power, even of oversight.

    How is Ron Paul going to have any influence?

    It sounds like a good idea, personally speaking.

    I don’t know what to say about Ron Paul’s observations. The monetary policy has always seemed kinda bogus to me; but inflation is clearly theft.

    It’s obviously a shell game that carries on as long as there’s faith in the system, …

    Which requires, naturally, faith in the system.

    I’d be curious to see how the Canadians do it. They have a similar economy, but as one banker explained it to me, their financial system – including the currency – is “differently” managed. I’d be curious to see how exactly that’s supposed to work. No Canadian ever explained it to me sufficiently. I suspect they don’t understand it any more than I understand the American system.

  3. Workshy Joe says:

    Ron Paul entered the political fray in 1971 in response to the Nixon Shock.

    The removal of the last tie between the Federal Reserve Note and gold had a seismic effect as the US dollar held “world reserve currency” status under the post-war Bretton Woods agreement.

    For the last 40 years, the world has been running on a total fiat regime. Its not a question of “if” the current system will collapse. Its more a question of “when”.

  4. rebelliousvanilla says:

    Gorbachev, Canada’s system is identical to America’s, they’re just in a better position financially right now.

  5. Gorbachev says:

    Thought so. I’ve done some research; whats interesting is that Canada has the option of backing its credit notes with surplus resources (mostly metals). I’ll see if I can find the reference. Though this apparently didn’t help Brazil before the 80’s.

    That would do something to bring a measure of hardness to a currency.

    Apparently, the only thing giving American dollars any faith-power is the US gov’s ability to tax.

    Fiat currency. No wonder they don’t like to talk about it. It all works until someone starts asking questions.

  6. rebelliousvanilla says:

    Gorbachev, nothing stops the Fed from buying resources and backing the dollar with them. 🙂

  7. Gorbachev says:

    Yeah, but we don’t have endless supplies of them with no people to support. Countries like Brazil have too many people, but Russia and Canada could just back their currencies with resources they haven’t even extracted from the ground. Future resources. The Canadians could just shut or slow down gas/oil production and use it as a “sequestered resource” to back the Dollar. The Russians could do the same with the Rouble.

    Apparently, they’ve got tons of gold, too. Both countries. And Canada has as much rare earths in the Arctic as China, maybe many times more; with future technology, I’ll bet that these resources will be crazily valuable. One of the things I learned in the diamond doc I did 8 years ago was that the Canadian and Russian governments aren’t keen on exploiting these resources yet: They’re remote and hard to access, but they’re willing to let China eat up its 10-year supply first.

    Brazil might be doing much the same thing.

    It occurs to me that a partly fiat currency backed by resources might go a long way to strengthening a currency.

    “Backed by a mixed collection of manganese, lithium and precious metals on the order of X tons / year.”

    Until we start harvesting asteroids, a dodgy business, incidentally, these might be the answers.

  8. Gorbachev says:

    This is unrelated, but Poly, you might want to blog about this. I posted it as a comment on Roissy.

    RC and crowd:

    Anybody still worried about China manning up and taking over the world of hot pussy? Guess again. Quite the opposite.

    Any Asian male-eunuchs out there can hate me more, but you still think white guys in Asia only get it with whores? That China is somehow unique and special and doesn’t follow the rules of human nature? Try these shoes on.

    Feminism ripping apart China – but it’s been going on for a lot longer.


    And a blog on it:


    Of course, the blog misses the point: the commenter blames men for not trying hard enough and women having to work hard because the society is male-dominated.

    My experience suggests to me that Chinese society is *much* more feminist than American society. And has been for years, just not in an obvious way, to us. I recall “dating” extremely accomplished, very well-educated and often very well-off women, not all of them single. And listening to them complain in bed about the pussiness of Chinese men- especially the kinds of Overseas Chinese that troop back to China looking for weak, simpering young virgins to take back home because they can’t get any other women.

    We can all guess, pretty easily, why the men are a bunch of sissies and can’t bring themselves to work at anything. And it’s most definitely not because they’re suffering from an over-indulgence of “male privilege”.

    Relevant bits for the general reader:

    A similar academic gender gap also observed in the West and other countries where girls outperform boys, but the situation appears especially serious in China where decades of a one-child policy have focused all parental attention on a single child. It’s also ironic that boys appear especially at a disadvantage in a male-dominated society where many people prefer boy babies.

    This general state of affairs the authors and many others attribute to China’s rigid education system that doesn’t accommodate boys’ and girls’ differing physiological and brain development; pressure to perform; overprotection and pampering by parents and grandparents; and an environment at home and school that is dominated by women and lacks strong male role models.

    For years we’ve focused more on girls’ rights to receive equal education. But we unintentionally neglected boys and their worsening crisis,” says coauthor Sun, also deputy director of the China Youth Research Center. If this continues, we will have a new gender imbalance,” Sun says.

    And this is particular to places like China and Korea:

    Parents spoil them and coop them up indoors instead of letting them run around outside because they think nature and vigorous exercise are dangerous.

    “In a system that ignores gender differences and demands every student be quiet and obedient, there are heavy shackles on boys who have at least 15 times more testosterone than girls,” he says. “Boys and girls are not parts on an assembly line that have the same size, shape and function.”
    Boys’ ability to read and write develops two years later than girls, even nerves in a boys’ fingers grow more slowly than girls, says Sun.
    “My son has trouble holding a brush and writing Chinese characters with complicated strokes,” says one man. Girls do better earlier, though boys catch up as their coordination improves.
    “But they are required to learn the same thing at the same speed. This is so unfair,” Sun says.

    The same old same old. When you let women and Top-Down systematizers teach your boys, the only option they have is to teach them not to be boys. The Maleness must be driven from them.

    That’s fine – except that you’ll never get any grandchildren, because the women won’t breed with your pansy son.

    Some boys are regarded as slow or silly because they have so much energy and have a hard time sitting still. “This can make them hate school starting in the first grade,” says Sun.
    Though boys need to run around, many schools eliminate vigorous and demanding physical exercise for both boys and girls – lest accidents result in lawsuits. Exuberance is generally discouraged.


    The education system is more suitable for girls, who are good at memorizing and like sitting quietly to read,” says author Li.

    Anyone who’s ever interacted with Chinese men in China knows that the younger generation is filled with non-Men. I’ve seen boyfriends publicly humiliated and berated on the street for being late by 5 minutes; girls bragging in the “I pulled a fast one” way about how they manipulated their BF into buying them this or that expensive trinket; and men who silently give up and trudge on in whatever soulless way their society allows them to manage.

    I also knew media guys, Chinese Alphas, who basically fuck everything that moves and has a nice figure, married or not. And they absolutely get away with it. And the women love it.

    As for the future, …

    I tell you, demographics: All future is demographics.

    And don’t worry about China. Its demographics are absolutely catastrophic.

    Every problem we have, they have worse. Except illegal immigration.


  9. rebelliousvanilla says:

    Gorb, a currency is either backed by something or it is fiat. Why I think the CAD is a far better thing to hold than the USD is because Canada has resources and that creates demand for CAD.

    And you don’t need to have the resources to back your currency by them. You can have trade surpluses and demand what you back your currency by as payment. I don’t see a really bright future for Canada either(20-30 years behind the US).

    Oh, and people would demand CAD only if the Canadians would want to sell their resources. Otherwise, I wouldn’t care that much about holding their dollar.

  10. Alvis Velthomer says:

    I found this particularly interesting. Paul is wrong if he thinks the “Right” has any will in mass-deporting people.

    nro: We know what that means. Anyways, another change in direction: How do you square your hard line on immigration away with your libertarian philosophy?

    PAUL: Well, I just think that it’s unsustainable without having some border protection, mainly because of the welfare state. The welfare state encourages our people not to work, and so then we need workers. And when immigrant workers come in, there are welfare benefits, education, and Medicare for those who come who are not legal. If there wasn’t that, I’d be pretty generous with illegal immigration.

    I’m writing a book for next year, and I’m going to say I support neither amnesty for everyone nor guns and shooting people when they come over. I want immigration to be legal, but I would argue that there should be no federal mandates to provide services for illegal immigrants. Maybe immigrants would go back, then, to their families, on their own. I think it’s virtually impossible to send back 12 million people, but I don’t think we should give them citizenship. So the Left will be unhappy because they want immediate citizenship, and the Right will be unhappy because they want to send them all home. But the other day, we had that DREAM Act vote — a lot of things there I was sympathetic to. But they wanted to give them tremendous welfare benefits. I don’t like that kind of stuff.

    The Middle of the Road position is merely the position that has yet to get steamrolled as being “intolerant” by the Regressives.

  11. PA says:

    Alvis, did you borrow the word “Regressives” from my comment at OneSTDV? A day or two ago I argued that the term “progressives” should in fact be antonymous to liberals/leftists because they destroy everything they touch; civilization, social capital, order, and yes, progress.

    In their latest globalist incarnation, female beauty is the victim of their destruction through state-sponsored disgenics and third world immigration. So they shoudl be called “regressives,” I argued.

    Just curious if that term is out there, or if you saw me use it first.

  12. rebelliousvanilla says:

    What I don’t get is why do you have to deport them? Make their lives so miserable in the US that they self deport. lol

  13. Alvis Velthomer says:

    I have seen the term (regressive) used by one other person, and I saw you (PA) use the term as well. I think it is an apt-term because the policies pushed forth by them cause society to degenerate into a more primitive and barbaric state. In 1969, we put a man on the moon. In 2010, we have not made any space progress since then, but we sure as hell are a lot more “diverse” and “liberated” so that is all that matters.

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