WEBVTT NOTE My Exchanges with Fed Chairmen 1 00:00:00.000 --> 00:00:08.000 Great to have everybody here, and it's my great honor to introduce the man of the hour, the man of the year, the man of the decade. 2 00:00:08.000 --> 00:00:18.000 Back in the 1970s when I had the great honor of working for Dr. Paul in his congressional office, and yes, I once worked for the government. 3 00:00:18.000 --> 00:00:26.400 I sense it went straight of course, but he was doing a little book called 4 00:00:26.400 --> 00:00:32.560 Gold Peace and Prosperity in defense of the gold standard and he said, I wonder if 5 00:00:32.560 --> 00:00:38.640 Henry Hazlitt would think about writing an introduction for this book and he 6 00:00:38.640 --> 00:00:43.200 said well probably, you know, probably he wouldn't so I called Hazlitt and of course 7 00:00:43.200 --> 00:00:47.000 Hazlitt was thrilled and he was especially thrilled that he, because he 8 00:00:47.000 --> 00:00:57.000 It turned out, I guess, no surprise to be a huge fan of Ron Paul's, and rightly so. 9 00:00:57.000 --> 00:01:04.000 So were Murray Rothbard and many of the other giants. 10 00:01:04.000 --> 00:01:13.000 Ron has been in Congress for 10 years, author of many books which were honored to sell at the Mises Institute, candidate for president. 11 00:01:13.000 --> 00:01:21.800 I was just remembering back at the Dearborn debate in Michigan, we were trying to remember 12 00:01:21.800 --> 00:01:27.640 what month this was, March or April of 2007, when all the Republican candidates were saying, 13 00:01:27.640 --> 00:01:32.840 hey, economy's great, everything's fine, no trouble, only those horrible naysayers, 14 00:01:32.840 --> 00:01:37.480 doomsayers, Cassandras would be saying that there might be a problem, and of course Ron 15 00:01:37.480 --> 00:01:46.600 John Paul told the truth, as is his want, and it seems to be a very different situation 16 00:01:46.600 --> 00:01:51.640 these days if it hadn't been the man who told us the economic fundamentals are all exactly 17 00:01:51.640 --> 00:01:57.320 right, if he weren't the Republican nominee, if we had a truth teller. 18 00:01:57.320 --> 00:01:58.560 But let's get to the man. 19 00:01:58.560 --> 00:02:04.120 I'm just going to mention that the Mises Institute is presenting to Dr. Paul our first 20 00:02:04.120 --> 00:02:11.800 Henry Hazlitt Award in honor of his 36 years of principal dedication to the cause of liberty, 21 00:02:11.800 --> 00:02:17.240 principal teaching of the cause of liberty, and I might not, not being a political kind 22 00:02:17.240 --> 00:02:23.400 of guy, I especially appreciate what he's done with the bully pulpit of Congressional 23 00:02:23.400 --> 00:02:28.120 office, all his campaigns, most recently in his presidential campaign, to teach the ideas 24 00:02:28.120 --> 00:02:33.360 of the Austrian School as they've never been taught before to millions of new people, millions 25 00:02:33.360 --> 00:03:03.360 Thank you. Thank you very much. I appreciate that. Like I say, I don't usually get that type of an 26 00:03:03.360 --> 00:03:06.920 and applause in Washington D.C. 27 00:03:06.920 --> 00:03:12.240 So it's nice to be out of D.C. and among friends and where the real heart of America is and 28 00:03:12.240 --> 00:03:13.240 should be. 29 00:03:13.240 --> 00:03:18.560 But it is a delight to be here and it's good to see Lou and it's good to see Bert here 30 00:03:18.560 --> 00:03:23.280 today and everybody else, all the Friends of Liberty. 31 00:03:23.280 --> 00:03:29.180 So it's been really a fantastic past two years for me personally and hopefully for others 32 00:03:29.180 --> 00:03:36.180 the Federal Reserve, fiat money, fractional reserve banking, Human Action, Man Economy and State, The Theory of Money and Credit 33 00:03:59.180 --> 00:04:08.180 Hopefully, it will never get to the point where it'll be said that I'm here from Goldman Sachs and I'm here to help you. 34 00:04:08.180 --> 00:04:16.180 But it certainly has been an interesting two years and lots of things, of course, has happened. 35 00:04:16.180 --> 00:04:22.180 Yesterday or the day before, right before I was leaving here, I had an interesting phone call from a member of Congress. 36 00:04:22.180 --> 00:04:30.380 He's a friend, and he's a conservative Republican, but we've never done anything legislatively 37 00:04:30.380 --> 00:04:31.380 together. 38 00:04:31.380 --> 00:04:35.640 In other words, he's not hardcore, but he called and put out a message that he needed 39 00:04:35.640 --> 00:04:36.640 to talk to me. 40 00:04:36.640 --> 00:04:40.140 He was getting ready to make a trip, but he wanted to talk to me before he made this trip, 41 00:04:40.140 --> 00:04:45.260 and I thought it might have been one of the, like so many of the members now are calling 42 00:04:45.260 --> 00:04:47.780 because they get into a little bit of political trouble. 43 00:04:47.780 --> 00:04:51.460 You know, the leadership of the party, they don't have anything to do with me, but the 44 00:04:51.460 --> 00:04:54.040 The individual congressman, as soon as they get into trouble, 45 00:04:54.040 --> 00:04:55.180 will you give me some money? 46 00:04:55.180 --> 00:04:56.340 Will you send out an email? 47 00:04:56.340 --> 00:04:57.580 Will you endorse me? 48 00:04:57.580 --> 00:05:00.380 Because all of a sudden, they know our views are spreading. 49 00:05:00.380 --> 00:05:02.620 I thought, maybe that's what he was calling me about. 50 00:05:02.620 --> 00:05:03.700 But that wasn't it. 51 00:05:03.700 --> 00:05:06.020 He called and said that he and his wife 52 00:05:06.020 --> 00:05:07.740 had been sitting down and thinking 53 00:05:07.740 --> 00:05:08.940 about their investments. 54 00:05:08.940 --> 00:05:11.540 And he wanted to know, how do you buy gold? 55 00:05:11.540 --> 00:05:18.940 So I said, call Bert Blomert. 56 00:05:18.940 --> 00:05:21.740 He'll tell you how to buy a car. 57 00:05:21.740 --> 00:05:24.780 So maybe that's a sign of a changing time 58 00:05:24.780 --> 00:05:28.540 that people are starting to think that way. 59 00:05:28.540 --> 00:05:31.940 But I think this conference that you've had here, Lou, 60 00:05:31.940 --> 00:05:35.020 today, this couple of days, has been just fantastic 61 00:05:35.020 --> 00:05:38.540 on an issue that, of course, has attracted my attention 62 00:05:38.540 --> 00:05:39.820 for many, many years. 63 00:05:39.820 --> 00:05:41.660 I would say it was the issue of money that 64 00:05:41.660 --> 00:05:43.740 was the precipitating factor that got me involved 65 00:05:43.740 --> 00:05:47.780 in politics in the 1970s, with recognition 66 00:05:47.780 --> 00:06:17.780 the Austrian economists were right. I'd been studying and reading Austrian economics in the 60s and in 1971 I remember it very clearly on August 15th that the Bretton Woods was predicted to be to break down matter of fact it was Henry Haslett that very early on when Bretton Woods was set up said it wouldn't work and lo and behold it failed and that sort of confirmed you know the theory. You know sometimes I wonder why we still talk about the 67 00:06:17.780 --> 00:06:21.060 the Austrian Theory of the Business Cycle. 68 00:06:21.060 --> 00:06:24.220 And we always call it the theory. 69 00:06:25.540 --> 00:06:27.900 Why don't we call it the Austrian explanation 70 00:06:27.900 --> 00:06:29.980 of the business cycle? 71 00:06:29.980 --> 00:06:33.820 But that certainly got my attention 72 00:06:33.820 --> 00:06:35.420 and talked about it all. 73 00:06:35.420 --> 00:06:37.460 Overall, the issue that's always driven me 74 00:06:37.460 --> 00:06:39.980 has been the issue of liberty. 75 00:06:39.980 --> 00:06:43.980 And yet, you can't deal with the overall issue of liberty 76 00:06:43.980 --> 00:06:46.900 if you don't deal with the issue of money 77 00:06:46.900 --> 00:06:49.060 because money is a driving force. 78 00:06:49.060 --> 00:06:52.220 It is all powerful in a moral sense, in an economic sense, 79 00:06:52.220 --> 00:06:54.980 in a constitutional sense, and it is very, very vital 80 00:06:54.980 --> 00:07:00.980 because if somebody gets control over the monetary system, 81 00:07:00.980 --> 00:07:04.500 they have ominous control and ominous power. 82 00:07:04.500 --> 00:07:09.020 And there was a conversation I had with Greenspan 83 00:07:09.020 --> 00:07:11.500 a couple years ago when I pushed him 84 00:07:11.500 --> 00:07:14.900 on this issue on the amount of power he had. 85 00:07:14.900 --> 00:07:22.620 I said, you can dictate interest rates, you can decide how much money people who are retired 86 00:07:22.620 --> 00:07:27.900 and they're in their CDs, what they're going to earn, and he acknowledged that and he called 87 00:07:27.900 --> 00:07:35.020 it an ominous power that he indeed had, but he said, but it was given to us, the Congress 88 00:07:35.020 --> 00:07:44.620 gave it to us, but that's why he believed very much in openness of the Federal Reserve 89 00:07:44.620 --> 00:07:50.580 and that people know what they're doing, which is an absolute falsehood because we don't 90 00:07:50.580 --> 00:07:55.180 know exactly what we're doing and they're doing a lot behind the scenes. 91 00:07:55.180 --> 00:08:01.500 But anyway, he did confess up to the fact that there was an awful lot of power in the 92 00:08:01.500 --> 00:08:07.020 hands of the Federal Reserve Board and the Federal Reserve Board Chairman. 93 00:08:07.020 --> 00:08:12.620 When I first went to Congress, which was in the tail end of the 74 election, which would 94 00:08:12.620 --> 00:08:42.620 The Chairman of the Federal Reserve at that time was Arthur Burns, and so I was on financial service with the Banking Committee all the years I've been in Congress, so there's been a few Federal Reserve Board Chairmen I've seen before the committee, Burns was there of course and stayed a good while, not that I was there that many years when he was Chairman, but then G. Williams Miller came in, and of course he didn't last long when we had those terrible 95 00:08:42.620 --> 00:08:46.820 problems at the end of the 70s and they brought in Volker. Volker I did have a 96 00:08:46.820 --> 00:08:52.620 fair amount of experience with him and then of course after Volker, Greenspan 97 00:08:52.620 --> 00:08:59.620 and then Bernanke. So it's it's been a few people a few individuals that have 98 00:08:59.620 --> 00:09:05.060 served as a Federal Reserve Board chairman but I think the overall 99 00:09:05.060 --> 00:09:10.180 atmosphere of the relationship of the members of Congress or especially with 100 00:09:10.180 --> 00:09:16.540 me have evolved a bit since that time. You know the two that I was most 101 00:09:16.540 --> 00:09:22.380 fascinated with and thought about old times with both Burns and Volcker but for 102 00:09:22.380 --> 00:09:28.860 a rather silly reasons because when I think about it they were actually allowed 103 00:09:28.860 --> 00:09:36.100 to come to the committee room and smoke a pipe and smoke a cigar right in the 104 00:09:36.100 --> 00:10:06.100 I hate the smell of smoke. It's horrible. It's bad for your health. But there's still something mystical about the fact that somebody could actually sit, stand in a building there and smoke, you know, and old burns would there be playing with this pipe, and then, of course, Volcker smoking those horrible cigars. But things have changed. But attitudes have changed, too. I know when Lew was working with me up there, we would have conversations. 105 00:10:06.100 --> 00:10:10.380 Conferences, and actually right after he started the Mises Institute, we had a gold conference 106 00:10:10.380 --> 00:10:15.580 up there, and we could get Federal Reserve Board Chairman to come out and participate. 107 00:10:15.580 --> 00:10:21.820 Part T was one that participated, and Wallach used to be on TV debates with me, and Volcker 108 00:10:21.820 --> 00:10:24.700 was really a gentleman about it all. 109 00:10:24.700 --> 00:10:29.300 I can remember when we were working on the Monetary Control Act, which I believe would 110 00:10:29.300 --> 00:10:36.060 have been 1980, and he was pushing hard for this, and this was giving a lot more power 111 00:10:36.060 --> 00:10:53.060 The two things that bothered me the most was, one, the authority for the Federal Reserve to take reserve requirements down to zero if he wanted, and also that he could buy anything he wanted, not only domestically, but he could buy foreign debt. 112 00:10:53.060 --> 00:11:00.740 and but he was annoyed and disturbed by the fact that I was saying this out in public so he invited 113 00:11:00.740 --> 00:11:06.740 me to a personal breakfast something that would never happen by Greenspan or Bernanke they wouldn't 114 00:11:06.740 --> 00:11:12.420 do that but Volker felt it was important enough that he get me over there and explain to me 115 00:11:12.420 --> 00:11:18.740 the Monetary Control Act and this one we this breakfast can be verified because I had Lugo 116 00:11:18.740 --> 00:11:48.740 with me. And the interesting thing that happened there, it must have been in the end of 79, and we walked in, Lew and I walked in, and Volker's staffer was there, and we chatted a bit, and then Volker came in, and Volker did not come over and shake my hand or say hello, he immediately went to his staffer, and he asked him, what is the price of gold? So they do pay attention to the price of gold, 117 00:11:48.740 --> 00:11:51.260 And is there interest to know what the price of gold is? 118 00:11:51.260 --> 00:11:56.940 I think that is still just as important today to the members of the Federal Reserve and 119 00:11:56.940 --> 00:12:02.300 to the monetary establishment around the world, what is the so-called price of gold, which 120 00:12:02.300 --> 00:12:08.000 means they're asking what is happening to the perception of the value of the dollar. 121 00:12:08.000 --> 00:12:11.020 So I think they're still intensely interested in that. 122 00:12:11.020 --> 00:12:15.220 But we did have this discussion about the Monetary Control Act, and he kept arguing 123 00:12:15.220 --> 00:12:16.220 ." 124 00:12:16.220 --> 00:12:19.100 He's saying his case, oh no, no, it's not going to do this, it's not dangerous. 125 00:12:19.100 --> 00:12:22.260 But I remember at the end of it, he conceded. 126 00:12:22.260 --> 00:12:27.980 He says, yes, he says, that is true, that we could take reserve requirements down to 127 00:12:27.980 --> 00:12:34.520 zero if necessary, and if we had to do something like bail out a foreign country, we could 128 00:12:34.520 --> 00:12:35.520 do this. 129 00:12:35.520 --> 00:12:39.380 But he said, we would never do it. 130 00:12:39.380 --> 00:12:45.780 And you know, a few weeks ago Volker came before the Joint Economic Committee and I 131 00:12:45.780 --> 00:12:52.540 happened to bump into him in a receiving room, just he and I talked for a bit and he was 132 00:12:52.540 --> 00:12:58.660 interested in chatting and I didn't do it but I think I should have and the thoughts 133 00:12:58.660 --> 00:13:03.300 that crossed my mind was, what did I tell you about that Monetary Control Act? 134 00:13:03.300 --> 00:13:04.380 Look at what they're doing. 135 00:13:04.380 --> 00:13:07.940 They don't even take it down to zero, it's minus zero now, you don't have to have anything 136 00:13:07.940 --> 00:13:12.460 And they'll keep giving you everything you want, you know, it makes no difference whatsoever. 137 00:13:12.460 --> 00:13:18.780 I didn't do that, but he was fascinated with a friendly chat, but his story was the same. 138 00:13:18.780 --> 00:13:19.780 Nothing has changed. 139 00:13:19.780 --> 00:13:26.580 So I think he's still a big central banker, obviously, but probably a little more decent 140 00:13:26.580 --> 00:13:31.900 individual than the more recent Federal Reserve Board chairman. 141 00:13:31.900 --> 00:13:38.780 So it is something of course to me has been crucial and so important. 142 00:13:38.780 --> 00:13:42.780 Today a lot is going on financially. 143 00:13:42.780 --> 00:13:46.260 Nobody needs to go very far to figure that out. 144 00:13:46.260 --> 00:13:54.280 But in many ways it's a wonderful thing happening for us because we're getting more attention 145 00:13:54.280 --> 00:13:56.280 about this issue. 146 00:13:56.280 --> 00:14:00.960 I know a lot of the establishment don't want to hear about what we're talking about in 147 00:14:00.960 --> 00:14:03.640 and Sound Money, but something has happened. 148 00:14:03.640 --> 00:14:05.880 Something dramatic has happened. 149 00:14:05.880 --> 00:14:09.560 And it's happened in these last two years. 150 00:14:09.560 --> 00:14:12.720 My goal had always been to talk about the issues, 151 00:14:12.720 --> 00:14:15.480 believing sincerely a major crisis would come. 152 00:14:15.480 --> 00:14:18.640 Hopefully, I could participate in the discussion and debate 153 00:14:18.640 --> 00:14:23.080 and how it would be rebuilt, how the system would be rebuilt. 154 00:14:23.080 --> 00:14:25.880 But I think it's very, very clear that what we're witnessing 155 00:14:25.880 --> 00:14:30.640 today is the end of that second stage of the Bretton Woods. 156 00:14:30.640 --> 00:14:38.080 It's the dollar standard with no relationship to gold, and it's lasted since 1971. 157 00:14:38.080 --> 00:14:41.180 And I think in the last several months the declaration has been made. 158 00:14:41.180 --> 00:14:43.240 It's a non-viable system. 159 00:14:43.240 --> 00:14:44.280 I think they know it. 160 00:14:44.280 --> 00:14:45.440 I think we know it. 161 00:14:45.440 --> 00:14:49.480 I think the Congress doesn't have any idea what's going on. 162 00:14:49.480 --> 00:14:54.620 But it's very clear that the current system isn't maintained, and it has to be replaced 163 00:14:54.620 --> 00:14:55.720 by something. 164 00:14:55.720 --> 00:14:58.480 And I think they are scurrying around like crazy. 165 00:14:58.480 --> 00:15:04.520 They do admit there's going to be a global summit, and there's going to be the discussion, 166 00:15:04.520 --> 00:15:06.240 but the plans are being laid. 167 00:15:06.240 --> 00:15:12.040 I do not believe that they are quite ready to accept our views, but the discussion is 168 00:15:12.040 --> 00:15:13.040 out there. 169 00:15:13.040 --> 00:15:19.040 But what has happened during the campaign, and since then, is to me rather remarkable, 170 00:15:19.040 --> 00:15:25.600 because I've had more opportunities than ever before to get our message out on the more 171 00:15:25.600 --> 00:15:28.040 for Conventional Stations. 172 00:15:28.040 --> 00:15:34.680 And, you know, what always astounded me in the campaign was the attention. 173 00:15:34.680 --> 00:15:37.280 You know, people say, well, you didn't get enough attention. 174 00:15:37.280 --> 00:15:41.240 They sidelined you, and they wouldn't cover you, and they complained about it. 175 00:15:41.240 --> 00:15:47.480 But, you know, after that little minor altercation with the mayor of New York City, whatever 176 00:15:47.480 --> 00:15:53.120 his name is, you know, somebody in the meeting came up to me and they said, well, are you 177 00:15:53.120 --> 00:15:54.520 ready to quit and ready to get out? 178 00:15:54.520 --> 00:15:57.960 This was about a week after that little incident. 179 00:15:57.960 --> 00:16:00.680 They said, aren't you going to quit and get out of the race? 180 00:16:00.680 --> 00:16:04.400 I mean, like you were humiliated and proven completely wrong 181 00:16:04.400 --> 00:16:05.200 and all this. 182 00:16:05.200 --> 00:16:07.520 And I said, you know what? 183 00:16:07.520 --> 00:16:11.800 I said, in the last week, I got more attention 184 00:16:11.800 --> 00:16:15.400 than I did in the 30 years I've been in campaigning. 185 00:16:15.400 --> 00:16:19.400 So I wasn't about to back down on that. 186 00:16:19.400 --> 00:16:24.320 But the need for a global summit is obvious. 187 00:16:24.320 --> 00:16:43.320 The plans for the global summit are something else. 188 00:16:43.320 --> 00:16:50.320 Sarkozy from France has been very clear on what he wants to do. 189 00:16:50.320 --> 00:16:56.320 And now, I think he's pretty good friends with Bush, and they get along fine. 190 00:16:56.320 --> 00:17:04.320 And Sarkozy says, what we need to do at this conference is revamp capitalism. 191 00:17:04.320 --> 00:17:07.320 It's capitalism that is so bad. 192 00:17:07.320 --> 00:17:15.320 But I don't think you should worry about that, because our president is standing up for us. 193 00:17:15.320 --> 00:17:24.600 and he said that the president said that he's all for the global summit with the one condition 194 00:17:24.600 --> 00:17:35.480 that we not violate or abuse any free market principles so we have nothing to worry about 195 00:17:35.480 --> 00:17:43.480 he will he will take take care of us and make sure that we have sound economic principles 196 00:17:43.480 --> 00:17:45.480 apply to this summit. 197 00:17:45.480 --> 00:17:50.800 I see what's happening is that they've conceded that the dollar standard that we have is at 198 00:17:50.800 --> 00:17:52.160 an end. 199 00:17:52.160 --> 00:17:56.440 But they probably have gotten together, which they do all the time, and we're not allowed 200 00:17:56.440 --> 00:18:01.880 to know what we do because it's literally in the code exempted from ever auditing or 201 00:18:01.880 --> 00:18:07.240 knowing what the Federal Reserve does, especially on international corporations and international 202 00:18:07.240 --> 00:18:08.240 discussions. 203 00:18:08.240 --> 00:18:10.000 You cannot have any acts of that. 204 00:18:10.000 --> 00:18:15.840 There is absolutely no oversight as far as what they do. 205 00:18:15.840 --> 00:18:22.240 I believe they've gotten together and they're willing to temporarily do what they can to 206 00:18:22.240 --> 00:18:24.120 prop up the dollar. 207 00:18:24.120 --> 00:18:31.280 Keep the dollar on the international exchange markets reasonably valued and then with the 208 00:18:31.280 --> 00:18:35.200 idea that the plans will be laid to come up with a new system. 209 00:18:35.200 --> 00:18:39.640 So what is happening today probably is very, very temporary because they know they can't 210 00:18:39.640 --> 00:18:44.440 Sustain it, and then there will be this announcement. 211 00:18:44.440 --> 00:18:49.560 And this is just a continuation of what I think George Bush Senior became more bold 212 00:18:49.560 --> 00:18:54.400 about when he talked about international finance. 213 00:18:54.400 --> 00:18:59.640 He was the first president to say that we do indeed need a new world order. 214 00:18:59.640 --> 00:19:02.180 And this is part of that. 215 00:19:02.180 --> 00:19:09.620 This is the continuation of a new world order, and they are going to come up with a new program. 216 00:19:09.620 --> 00:19:20.620 Our side will have a tough time. The only thing we have on our side is truth and the right economic views and ultimately I believe they can prevail. 217 00:19:20.620 --> 00:19:36.620 And we have tools today that we didn't have before. We have tools that through the internet, I think it's fantastic, I think we have more and more people joining organizations like the Mises Institute that is getting this information out. 218 00:19:36.620 --> 00:19:44.620 This is why I've always admired what the Mises Institute does, because it's not to have a group of people together and talk about it and talk to the choir, 219 00:19:44.620 --> 00:19:52.620 but it's to spread these views and talk to teachers and promote it and have new teachers come out and influence the next generation. 220 00:19:52.620 --> 00:19:57.620 And that's what counts. So the prevailing attitude of the people to me is key. 221 00:19:57.620 --> 00:20:02.620 That is the most important, if we're ever to undermine this system of banking. 222 00:20:02.620 --> 00:20:10.620 and Banking. And it is indeed the banking system that is allowed so much corruption. 223 00:20:10.620 --> 00:20:18.620 And when you just think about the power of the Federal Reserve, think about off-budgeting. 224 00:20:18.620 --> 00:20:22.620 I mean, when the Fed should come in and inject a trillion dollars, 225 00:20:22.620 --> 00:20:30.620 I mean, it's not authorized by the Congress. I mean, where did we, the people, where have we been? 226 00:20:30.620 --> 00:20:34.880 Why have we allowed this? It's not only a trillion, it's a couple trillion or three 227 00:20:34.880 --> 00:20:39.860 trillion. And what are they doing with this? They're propping up bad people. It's all 228 00:20:39.860 --> 00:20:44.060 the bad people that are getting this. They're the ones that are getting the money. What 229 00:20:44.060 --> 00:20:47.240 are they doing? They're fighting wars that they're not supposed to be fighting. They're 230 00:20:47.240 --> 00:20:53.320 propping up of a welfare state that shouldn't even exist. And yet, hardly anything is said. 231 00:20:53.320 --> 00:21:00.320 And here we are on the verge of this, in the middle of a major crisis because we've allowed 232 00:21:00.620 --> 00:21:07.340 to go so far. You know they talk a lot about moral hazard that encourages 233 00:21:07.340 --> 00:21:12.500 people to make bad mistakes and to take more risks than they would ordinarily. 234 00:21:12.500 --> 00:21:17.180 But I've never wondered why they call it moral hazard. I keep thinking of it 235 00:21:17.180 --> 00:21:22.740 being an immoral hazard that's going on. There's a lot of immorality going on 236 00:21:22.740 --> 00:21:25.780 out there and there's a lot of people making a lot of 237 00:21:25.780 --> 00:21:29.300 mistakes. But just think of what contributed this fiasco that we're 238 00:21:29.300 --> 00:21:38.300 The Federal Reserve, of course, are the ones who have been most responsible in a way because they've controlled the monetary system. 239 00:21:38.300 --> 00:21:43.300 And under Greenspan, just look at what he's done. You know, took interest rates down to 1%. 240 00:21:43.300 --> 00:21:48.300 Of course, that caused trouble when we thought, well, they'll never get back down to 1% again. 241 00:21:48.300 --> 00:21:55.300 But isn't it like last week? Back down to 1% again. Too much inflation, too much money, that's the problem. 242 00:21:55.300 --> 00:21:59.800 How do you solve that problem? Too much money, too much inflation, more spending. 243 00:21:59.800 --> 00:22:02.800 So it goes on and on. 244 00:22:02.800 --> 00:22:07.800 But not only did you have the Federal Reserve System creating too much money, 245 00:22:07.800 --> 00:22:11.800 but you had other things too that not a lot of people talk about. 246 00:22:11.800 --> 00:22:14.800 Very important to cause people to make mistakes. 247 00:22:14.800 --> 00:22:18.800 How about the Federal Deposit Insurance Corporation? 248 00:22:18.800 --> 00:22:24.800 I mean, that in itself is a major contributing factor. 249 00:22:24.800 --> 00:22:54.800 This whole idea of valuing assets, you know, at a certain level, that's very important, they should be set by the market, but we have an SEC that's involved in trying to set the value of assets, so at one time they think that assets should be, they mandate that they be at a certain level below the market asset, then they come along and say, okay, all of a sudden what we're going to do is reverse this trend and set them at another rate, 250 00:22:54.800 --> 00:23:00.320 and more and more chaos but can can you imagine how smoothly that could work if 251 00:23:00.320 --> 00:23:05.080 you had a private FDIC that was monitoring each individual bank that 252 00:23:05.080 --> 00:23:11.360 would be measuring the the viability of the bank and in insurance rates may go 253 00:23:11.360 --> 00:23:15.880 up and the consumer and the customers would know and if they were not valuing 254 00:23:15.880 --> 00:23:20.640 their assets correctly then then the insurance company or somebody else would 255 00:23:20.640 --> 00:23:23.960 be able to tell us that it would happen on an individual bank but never 256 00:23:23.960 --> 00:23:53.960 And of course, to add fuel to this, we had Feeney May and Freddie Mac. Here's a program that was designed, of course, it lasted for a long time, so it must have been good. It came out of the thirties. But the seeds had been planted in the thirties. But it was only in the last decade or two that you could see what was forming. And it was not easy. 257 00:23:53.960 --> 00:24:06.960 about two many years ago, probably about eight or nine years ago, I had a piece of legislation in that said that, you know what we ought to do, is remove the line of credit to the Treasury. 258 00:24:06.960 --> 00:24:15.960 And they said, well, why do that? They've never used it. It's only two trillion or two billion dollars. Of course, that wasn't very much, but it didn't matter. 259 00:24:15.960 --> 00:24:22.960 But it was the atmosphere that the Treasury would always bail out Fannie Mae and Freddie Mac and therefore they had lower interest rates. 260 00:24:22.960 --> 00:24:25.960 and of course contributed tremendously to it. 261 00:24:25.960 --> 00:24:29.960 But the one thing you better not dare attack and say that contributed to it, 262 00:24:29.960 --> 00:24:31.960 because this is politically incorrect, 263 00:24:31.960 --> 00:24:35.960 to suggest the CRA, Community Reinvestment Act, had something to do with it. 264 00:24:35.960 --> 00:24:40.960 I mean, we wouldn't want to do that because then you just don't like poor people. 265 00:24:40.960 --> 00:24:46.960 But I guess if you don't like, well, if you did like poor people, 266 00:24:46.960 --> 00:24:51.960 maybe we would have a better system where houses aren't taken from the poor people. 267 00:24:51.960 --> 00:24:56.960 Poor people, you give it to them and then they say, oh, who's losing their houses right now? The poor people. 268 00:24:56.960 --> 00:25:04.960 If we're for the poor people, why wouldn't we be for lowering the price of houses? Housing prices are too high. People can't afford them. 269 00:25:04.960 --> 00:25:15.960 Well, good. That means we ought to allow the market to lower housing. But what's our policy? Keep the prices of houses up so that the poor people can't buy their houses. 270 00:25:15.960 --> 00:25:18.120 Well, if they can't, well, we'll give them more money. 271 00:25:18.120 --> 00:25:20.560 So it goes on and on. 272 00:25:20.560 --> 00:25:26.200 They have no understanding, no conviction, no confidence that freedom works, and I am 273 00:25:26.200 --> 00:25:37.000 convinced that freedom does really work. 274 00:25:37.000 --> 00:25:42.320 But in addition to contribute to this crisis, we've had the HUD programs insisting that 275 00:25:42.320 --> 00:25:50.160 to make the bad loans, and also the threat by the courts, some of these laws are written. 276 00:25:50.160 --> 00:25:54.680 If you don't do what you're told to do, if you're in the banking system and you don't 277 00:25:54.680 --> 00:25:58.360 do this, you could be fined up a half a million dollars for doing it. 278 00:25:58.360 --> 00:26:00.720 So why not do it, especially if you can make a killing? 279 00:26:00.720 --> 00:26:05.360 I'll make the loans, I'll sell them and get rid of them, and then it will satisfy the 280 00:26:05.360 --> 00:26:10.800 law and then lo and behold, a bubble is formed. 281 00:26:10.800 --> 00:26:16.960 So what are we doing today to try to correct this, these programs and these solutions orchestrated 282 00:26:16.960 --> 00:26:22.240 so much by the politicians and by the central bank, that we're ending up with a system 283 00:26:22.240 --> 00:26:26.600 where the poor people now have to bail out the rich people. 284 00:26:26.600 --> 00:26:33.800 We have the innocent people bailing out the guilty people, as well as we're relying on 285 00:26:33.800 --> 00:26:39.280 the sound investments, the people who invested wisely, put down payments that are making 286 00:26:39.280 --> 00:26:47.280 Payments, and they've done decent investments, they have to be punished to bail out the people who did the bad investment. 287 00:26:47.280 --> 00:26:56.280 Everything is turned on its head. One of the basic principles that I believe that we fail to follow, and it's very clear in the Constitution, 288 00:26:56.280 --> 00:27:05.280 that we should not be doing, and we've done it from the beginning in this business on the Heusenbabel, interference in the contract going in, 289 00:27:05.280 --> 00:27:35.280 and now interfering in the contract going out saying that you know if you have a if you have sold a mortgage and you want to foreclose they're essentially saying oh no you can't foreclose you're going to have to do this and you're going to have to make sure that nobody is thrown out of out of their house it's the the the limited responsibility of the government is to enforce contracts but instead they're meddling in contracts all the time that basic principle is not talked about a whole lot but the government is involved in the contract 290 00:27:35.280 --> 00:27:43.280 all the time. I mean, it's constantly, whether it's the price of assets, the regulations 291 00:27:43.280 --> 00:27:49.720 that we have, it's the price of labor, wages, and on and on, the government is constantly 292 00:27:49.720 --> 00:27:55.300 involved in contracts. But what about the contract that the people and the government 293 00:27:55.300 --> 00:28:00.240 should have about soundness and money? The contract ought to be that we shouldn't have 294 00:28:00.240 --> 00:28:05.240 Do we have any counterfeiters out there? You and I aren't a lot of counterfeit. 295 00:28:05.240 --> 00:28:10.240 Why do we allow our government to counterfeit? It makes no sense whatsoever. 296 00:28:10.240 --> 00:28:25.240 The Coinage Act of 1792 didn't like counterfeiters, and they said that anybody that was caught counterfeiting would receive the death penalty. 297 00:28:25.240 --> 00:28:29.760 whether we should apply that to the Federal Reserve or not, but they considered it very 298 00:28:29.760 --> 00:28:30.760 serious. 299 00:28:30.760 --> 00:28:36.560 The problem is, of course, they think only counterfeiting is taking a piece of paper 300 00:28:36.560 --> 00:28:42.620 and counterfeiting the paper, but counterfeiting is destroying the value of money by duplication 301 00:28:42.620 --> 00:28:47.120 of money illegally, and that's what we've been doing. 302 00:28:47.120 --> 00:28:51.840 You know, with Alan Greenspan over the years, he came to the committee and I had a fair 303 00:28:51.840 --> 00:28:58.840 There's a fair number of conversations with him both on and in the committee and out of the committee. 304 00:28:58.840 --> 00:29:11.840 And I did at one time on a casual conversation bring up the subject of Murray Rothbard and he indeed said that he knew Murray and had nothing negative to say about him but it was a brief conversation. 305 00:29:11.840 --> 00:29:18.840 I know Murray had a different opinion or a very strong opinion about Greenspan. 306 00:29:18.840 --> 00:29:22.880 but some of you have heard this story before but I'll tell again in case you 307 00:29:22.880 --> 00:29:27.400 haven't heard about it but everybody I think remembers and knows that Alan 308 00:29:27.400 --> 00:29:33.160 Greenspan at one time you know was a gold standard person and he wrote for 309 00:29:33.160 --> 00:29:37.080 Anne Rand and he wrote in the Objectivist Newsletter in his Golden 310 00:29:37.080 --> 00:29:44.840 Freedom article was fantastic and so he one time was coming before the bank 311 00:29:44.840 --> 00:29:50.040 Committee. And we had a chance to meet before that and get a picture taken. And I knew that 312 00:29:50.040 --> 00:29:55.560 he was coming, so I dug out my original copy of the Objectivist newsletter, which was at 313 00:29:55.560 --> 00:30:00.640 that time, if anybody remembered, was a green little booklet. And I was reading that. That 314 00:30:00.640 --> 00:30:05.640 would have been, you know, all through the 60s, I guess. So I dug that out and dug up 315 00:30:05.640 --> 00:30:09.680 the article. So when I had my chance to have a couple minutes with Greenspan, I walked 316 00:30:09.680 --> 00:30:13.480 up and I showed him this faded green book and I said, do you recognize this thing, this 317 00:30:13.480 --> 00:30:19.400 book and he said yeah he says I recognize that and so I flipped it open to the page 318 00:30:19.400 --> 00:30:25.160 with his special article in there and I said do you remember this article and he 319 00:30:25.160 --> 00:30:31.080 said yes he did and I said well would you I'd like you to autograph this 320 00:30:31.080 --> 00:30:38.560 article so he took it he took out his pen and he autographed it and while I was 321 00:30:38.560 --> 00:30:42.560 I said, do you want to put a disclaimer on it? 322 00:30:42.560 --> 00:30:46.560 And then he said something which was rather astounding. 323 00:30:46.560 --> 00:30:49.560 He says, no, no, he was very serious. 324 00:30:49.560 --> 00:30:51.560 He says, I've just read that recently. 325 00:30:51.560 --> 00:30:55.560 He says, and I stand by every word of it. 326 00:30:55.560 --> 00:31:00.560 So, but you know, in about the last meeting we had when he was getting ready to leave, 327 00:31:00.560 --> 00:31:05.560 about a year before he was, or so before he was ready to leave, he was reappointed. 328 00:31:05.560 --> 00:31:28.560 and, you know, Republicans and Democrats, one after another, about 15 of them just sort of bowed to the maestro and so when I had my turn, as politely as I could be, I said, you know, I said, I can't quite join in and I said, my suggestion is, why don't you leave right now while the getting is good? 329 00:31:28.560 --> 00:31:38.560 But he didn't take me up on that. I always thought he'd get out of town before he'd be blamed for anything, but it looks like he is going to be blamed for a few things, and that is good. 330 00:31:38.560 --> 00:31:50.560 I mean, he's responsible, and I thought it would all fall on Bernanke, but fortunately they have put a lot of blame on Greenspan. 331 00:31:50.560 --> 00:32:01.560 But you know, Greenspan came before the Banking Committee not too long ago as a former chairman. 332 00:32:01.560 --> 00:32:07.560 And he had this paper, this was probably within a month or so, an explanation of this. 333 00:32:07.560 --> 00:32:13.560 And I guess the best way I could describe this testimony was pretty pathetic. 334 00:32:13.560 --> 00:32:16.560 You know, it was, in a way, really sad. 335 00:32:16.560 --> 00:32:23.040 you know because when you think of where he was and where he is today and then he 336 00:32:23.040 --> 00:32:31.840 came and it looks like he's desperately trying to save his his image and but he 337 00:32:31.840 --> 00:32:37.120 he's going wrong and instead of saying I confess all my sins and I'm going back 338 00:32:37.120 --> 00:32:44.160 to my 1966 article no he has he's gone in the wrong direction and saying 339 00:32:44.160 --> 00:33:12.160 The first thing he said that we must do in order to get out of this crisis is stabilize prices, you know, make sure the housing prices do not drop, because as Paulson said, it's the dropping of the housing prices that is all the fault, and if we could just stop the dropping of housing prices, everything would be okay. 340 00:33:12.160 --> 00:33:16.640 So, that's what Greenspan said we do, we have to maintain housing prices. 341 00:33:16.640 --> 00:33:21.240 And then we have to recognize that private credit won't work, what we need to recognize 342 00:33:21.240 --> 00:33:25.100 that the only thing that can save us is sovereign credit. 343 00:33:25.100 --> 00:33:31.300 So we need more government credit, of course that had nothing to do with our problems whatsoever. 344 00:33:31.300 --> 00:33:37.640 But he did allude to what he thought was the real problem and he put the blame on the securitizers 345 00:33:37.640 --> 00:33:45.280 because they produced excessive demand for the securities and therefore they were at fault. 346 00:33:45.280 --> 00:33:49.400 If they wouldn't have been buying these things and the whole thing is, 347 00:33:49.400 --> 00:33:54.240 it was the principle of bundling and securitizing that was evil. 348 00:33:54.240 --> 00:33:57.120 And of course, that principle is not necessarily bad. 349 00:33:57.120 --> 00:34:01.280 I mean, if it's done honestly and above board in a free market, 350 00:34:01.280 --> 00:34:04.880 but he says no, it was an excessive demand. 351 00:34:04.880 --> 00:34:10.760 But then the one thing he did want to apologize in a way about the program that he was using, 352 00:34:10.760 --> 00:34:17.760 the computer economic program, because it didn't work quite the way it should have. 353 00:34:17.760 --> 00:34:27.920 And he said that it was flawed because it didn't have a long enough time span. 354 00:34:27.920 --> 00:34:31.520 They were calculating in the past 10 years and everything was okay, and it should have 355 00:34:31.520 --> 00:34:56.680 And on top of all this, he said, what we need are more regulations. 356 00:34:56.680 --> 00:34:58.560 That's where he really screwed up. 357 00:34:58.560 --> 00:35:06.200 He says the fact that we could have derivatives out there and not have enough regulations, 358 00:35:06.200 --> 00:35:07.840 that is the real problem. 359 00:35:07.840 --> 00:35:12.880 So if we'd only go back and do that, we would be much better. 360 00:35:12.880 --> 00:35:18.520 And then he comes up and he says, what we need now is to make sure that we do have a 361 00:35:18.520 --> 00:35:21.520 subprime market, but it be sustainable. 362 00:35:21.520 --> 00:35:27.600 I mean, how much worse can this get? 363 00:35:27.600 --> 00:35:34.640 But then he finished on a very positive note. He says, don't worry, the crisis will pass 364 00:35:34.640 --> 00:35:41.360 and we'll be okay. So all we have to do is listen to this. And I thought, what a sad 365 00:35:41.360 --> 00:35:50.760 ending to this career, which could have been so different if he would have just taken, 366 00:35:50.760 --> 00:35:56.040 you know a different a different approach but you know the place where we are 367 00:35:56.040 --> 00:36:02.680 today is crucial it's not this election isn't crucial you know what difference 368 00:36:02.680 --> 00:36:08.160 does it make really you know absolutely no difference whatsoever but we do live 369 00:36:08.160 --> 00:36:15.680 in in very very important times on the direction that we go in and we talked in 370 00:36:15.680 --> 00:36:21.880 In our campaign, a lot about change, and we routed a lot of young people, and a lot of 371 00:36:21.880 --> 00:36:25.980 people interested in what we were talking about, a lot of enthusiasm that still exists 372 00:36:25.980 --> 00:36:33.640 out there, probably more than I ever dreamed it would be, and it was very, very encouraging. 373 00:36:33.640 --> 00:36:41.680 But when you look at what's happened in the Obama campaign, I mean, this is really something 374 00:36:41.680 --> 00:36:49.680 Something pretty amazing going on. The number of people involved. Can you imagine the dollars involved? 375 00:36:49.680 --> 00:36:56.960 I am convinced in my own mind that probably from two and a half to three years ago when his real 376 00:36:56.960 --> 00:37:04.480 campaign started, there's probably been well over two billion dollars worth of publicity and 377 00:37:04.480 --> 00:37:11.200 advertising going into that campaign. Because for a year or so before he even announced, 378 00:37:11.200 --> 00:37:23.200 I mean just think of the positive publicity that came up on nine out of ten TV stations and that's very, it's hard to measure the value of that and he's tapped into it. 379 00:37:23.200 --> 00:37:36.700 The American people are sick of what they're getting in Washington. They're sick of the fact that they don't have enough money and prices are going up and they're sick of war that continues forever and ever and they're sick of people who live off the welfare state and they're sick of bailing out Wall Street. 380 00:37:36.700 --> 00:37:41.980 they indeed do want change so where are they going they're going to Obama for 381 00:37:41.980 --> 00:37:46.620 change and what change is there all this talk about change even McCain is talking 382 00:37:46.620 --> 00:37:51.660 about changing and trying to disavow Bush and we need to change things we 383 00:37:51.660 --> 00:37:55.540 need to do this and this and make a difference but all they're talking about 384 00:37:55.540 --> 00:38:01.180 is the change in the management of the same system the management of a flawed 385 00:38:01.180 --> 00:38:11.180 and the fraud system, a management that could care less about freedom and the rule of law and personal liberty and sound money. 386 00:38:11.180 --> 00:38:16.180 They don't care about that. They care only about the management. 387 00:38:16.180 --> 00:38:22.180 There is a contest going on. Not in ideas. There's a contest going on on who's powerful management group. 388 00:38:22.180 --> 00:38:28.180 But I am also convinced that those who really are in charge of foreign policy and monetary policy 389 00:38:28.180 --> 00:38:58.180 are not worrying that much about who wins and who loses because they both they both are going to just continue to manage the same very very flawed system and that will not bring about anything to our benefit it will just perpetuate our problems and so what we what we have to do though is we have to continue this effort because the opportunity is there the opportunity there is for 390 00:38:58.180 --> 00:39:02.540 for us to really have an impact, bigger than ever before. 391 00:39:02.540 --> 00:39:04.300 I mean, we have all been astounded. 392 00:39:04.300 --> 00:39:07.200 Lew and others who have been out and have heard some of the talks 393 00:39:07.200 --> 00:39:11.180 and they've been on the road, for individuals in the crowd 394 00:39:11.180 --> 00:39:15.940 to start applauding when you say Austrian economics. 395 00:39:15.940 --> 00:39:17.620 I mean, this is pretty amazing. 396 00:39:17.620 --> 00:39:20.660 And of course, the one episode that I sort of found fascinating 397 00:39:20.660 --> 00:39:23.740 was at the university, you know, that radical leftist school, 398 00:39:23.740 --> 00:39:26.900 the University of Michigan, went over there 399 00:39:26.900 --> 00:39:42.900 After We Had the Debate at Dearborn and that was where it first dawned on me that these college kids, you know, they seem to be up on some of this because then I got to talking about a little bit about the monetary policy, so a bunch of them pulled out their Federal Reserve notes and started burning them. 400 00:39:42.900 --> 00:39:57.900 And then every once in a while at these rallies, and I didn't start this, I didn't have a hold up a sign, but they started this chant, end the fad, end the fad, I mean, what's going on here? 401 00:39:57.900 --> 00:40:07.900 But in talking to so many young people who I met after the rallies or they come to my office, I'd ask them, what was the issue that caught your attention? 402 00:40:07.900 --> 00:40:37.900 attention. And it wasn't always the same. Sometimes it was just, I like your emphasis on the Constitution. But a lot of them would say the monetary issue. But the one that I sort of got a kick out of and I think is sort of fascinating is, and it is, well, we thought you were the only one that was telling the truth. You know, it didn't... 403 00:40:37.900 --> 00:40:43.980 in a way that that is rather sad because you hear other candidates mumbling sort 404 00:40:43.980 --> 00:40:48.300 of similar viewpoints you know oh yeah we gotta be blah you know we take an oath 405 00:40:48.300 --> 00:40:52.500 obey the Constitution and this sort of thing and I'd ask I'd point that out to 406 00:40:52.500 --> 00:40:56.100 them they said yeah but they just didn't sound like they were telling the truth 407 00:40:56.100 --> 00:41:01.800 and so young people are perceptive you know and and they do they do notice the 408 00:41:01.800 --> 00:41:06.220 difference and there's a fertile field out there there is no reason for us not 409 00:41:06.220 --> 00:41:12.060 to be optimistic enough to believe that many, many of those young people who are rallying 410 00:41:12.060 --> 00:41:18.060 around Obama are open to our ideas. There is no doubt in my mind that they are. Reaching 411 00:41:18.060 --> 00:41:24.780 them is another story. It's not that easy. But this economy is going to be in shambles 412 00:41:24.780 --> 00:41:31.780 for a long time, and our views not only make good economic sense, they make good constitutional 413 00:41:31.780 --> 00:41:38.900 Constitutional sense, good moral sense, but it it's so logical you know it just 414 00:41:38.900 --> 00:41:45.940 makes common sense that that our views should prevail and can prevail and and 415 00:41:45.940 --> 00:41:53.140 and this is very appealing so we need we need to you know increase our efforts 416 00:41:53.140 --> 00:41:58.300 and not get too downhearted and thinking well you know things are rather tough 417 00:41:58.300 --> 00:42:28.300 The foreign policy is an absolute disaster. You know, the other night was on TV. I was complaining about, nobody asked Obama and McCain. Have you heard it? Anybody ask them about, you know, why are we bombing Syria? And why are we bombing Pakistan? And why are we planning on bombing Iran? And why are we occupying Afghanistan forever and Iraq forever? I mean, they don't really even get into that. 418 00:42:28.300 --> 00:42:33.900 Bad as all that is, and as much as I'm convinced that foreign policy will not change under Obama, 419 00:42:33.900 --> 00:42:38.380 some are deceived into believing that, oh yeah, he's going to bring the troops home, sure, 420 00:42:38.380 --> 00:42:43.260 but you know what? The troops are going to come home. They are going to come home, 421 00:42:43.900 --> 00:42:50.140 just the way the Russian troops had to go home, too. And that, we should look at as a positive. 422 00:42:50.140 --> 00:42:56.700 Yes, we haven't deserved much of the prosperity we've had because it's been based on borrowed 423 00:42:56.700 --> 00:43:01.740 Money and Trust in a Dollar that's not trustworthy. We've been able to print money and spend them 424 00:43:01.740 --> 00:43:06.100 overseas. We've become a consumer nation, but it's going to, we have to pay for it. 425 00:43:06.100 --> 00:43:09.860 And that's what this whole financial crisis is about, is paying back for the things that 426 00:43:09.860 --> 00:43:16.980 we have done over these several decades. But we will be bringing our troops home, and, 427 00:43:16.980 --> 00:43:21.580 because they will not trust the dollar forever. And that will be good. But the big question 428 00:43:21.580 --> 00:43:48.580 The question is, do we want some semblance of a republic, or are we going to have this dribble about pure democracy and thinking that, you know, as long as there's 51%, stick it to the 49% just because they produce everything, it doesn't matter, 51% more, they get what they want, no, that has to end, we have to defend our position. 429 00:43:48.580 --> 00:43:52.500 We're fortunate in the fact that we have great traditions in this country. 430 00:43:52.500 --> 00:43:55.060 We do have at least a memory of property rights. 431 00:43:55.060 --> 00:43:58.460 We have a memory where contracts weren't to be interfered with. 432 00:43:58.460 --> 00:44:04.340 And we have a memory where the government was supposed to be minimal. 433 00:44:04.340 --> 00:44:07.940 And we have a document reasonably written. 434 00:44:07.940 --> 00:44:14.840 And even with its imperfections, if we followed what we have, we wouldn't be doing so badly. 435 00:44:14.840 --> 00:44:16.340 So it isn't the document. 436 00:44:16.340 --> 00:44:19.900 The document in many ways is irrelevant. 437 00:44:19.900 --> 00:44:26.320 It's the people who are in charge, the people that we ask to take care of government functions 438 00:44:26.320 --> 00:44:28.460 in a proper way. 439 00:44:28.460 --> 00:44:35.660 It's getting enough people in Washington with men of integrity, people that you can believe. 440 00:44:35.660 --> 00:44:40.820 This is what makes the difference, because if you say it's only the document, a document 441 00:44:40.820 --> 00:44:41.820 doesn't work. 442 00:44:41.820 --> 00:44:42.820 Of course it doesn't work. 443 00:44:42.820 --> 00:44:46.020 And it's not the failure of the document, it's the failure of the people. 444 00:44:46.020 --> 00:44:49.020 Is it the failure of the politician? No, it's the failure of the people. 445 00:44:49.020 --> 00:44:54.020 And that's why attitudes and ideas are so important. 446 00:44:54.020 --> 00:44:57.020 What our teachers are teaching, what the bureaucrats are saying, 447 00:44:57.020 --> 00:45:02.020 what the media is saying, and what our talk show hosts are saying, 448 00:45:02.020 --> 00:45:04.020 this is what really counts. 449 00:45:04.020 --> 00:45:10.020 And I sense that there is now a subtle shift and at least more questioning going on. 450 00:45:10.020 --> 00:45:14.020 I notice the difference because even within the last year, 451 00:45:14.020 --> 00:45:18.860 Of course, being in a campaign is one thing, you're less likely to get attention. 452 00:45:18.860 --> 00:45:21.000 Being out of a campaign is less threatening. 453 00:45:21.000 --> 00:45:24.620 But there are some serious questions being asked today. 454 00:45:24.620 --> 00:45:28.760 And I think we should thank all those who have, all of you who have been involved in 455 00:45:28.760 --> 00:45:33.920 education and promoting, all of you who have been supporters, many of you have been supporters 456 00:45:33.920 --> 00:45:36.980 of mine over the years for the various things I've done. 457 00:45:36.980 --> 00:45:39.420 And you're all supporters of the Mises Institute. 458 00:45:39.420 --> 00:45:40.720 This makes a difference. 459 00:45:40.720 --> 00:45:43.220 People keep asking me, what should I do as an individual? 460 00:45:43.220 --> 00:45:44.580 How can I make a difference? 461 00:45:44.580 --> 00:45:49.580 I'll tell you what, everybody has to do something, but it couldn't be different. 462 00:45:49.580 --> 00:45:52.380 I mean, it's not going to be the same. 463 00:45:52.380 --> 00:45:56.460 What Lew does is different than what I do, and if you're a teacher, you do something 464 00:45:56.460 --> 00:45:57.460 different. 465 00:45:57.460 --> 00:46:02.540 If earlier today somebody was talking about making a documentary, people have talents, 466 00:46:02.540 --> 00:46:05.940 everybody has a role and a responsibility. 467 00:46:05.940 --> 00:46:13.100 And besides, sitting back and doing nothing or hiding in the woods or trying to find a 468 00:46:13.100 --> 00:46:21.080 in a safe haven in Europe or some place, that doesn't excite me as much as saying why can't 469 00:46:21.080 --> 00:46:23.260 we change what we have here? 470 00:46:23.260 --> 00:46:28.100 As difficult as it is, I mean that's where our fight is principally. 471 00:46:28.100 --> 00:46:33.100 But it is a fight, it isn't a political struggle as much as it's an idea, it's a fight over 472 00:46:33.100 --> 00:46:35.420 ideas and the proper ideas. 473 00:46:35.420 --> 00:46:42.960 So in this manner I would say keep up the progress, let's continue this momentum, there's 474 00:46:42.960 --> 00:46:50.960 There's no reason to be discouraged, and all the problems that we have, look at it as opportunities, troops coming home, that's good. 475 00:46:50.960 --> 00:46:56.960 Running out of money for the welfare state, that's fine. Emphasizing the need to go to work, that's pretty good. 476 00:46:56.960 --> 00:47:05.960 That's not reward people who don't save money, that's reward to people who do save money, make sure the prices of houses go down so the poor people can buy houses once again. 477 00:47:05.960 --> 00:47:14.960 This is what we need. These ideas and views are logical. They make common sense. They appeal to a lot of people. They appeal to young people. 478 00:47:14.960 --> 00:47:23.960 And one thing that delighted me about the young people, they could see the connection about self-responsibility, self-reliance, 479 00:47:23.960 --> 00:47:31.960 and allowing people to do with their own personal life with what they want, in connecting that with economic freedom. 480 00:47:31.960 --> 00:47:36.960 For so long, we have divided this up. One group of people go out there defending economic freedom. 481 00:47:36.960 --> 00:47:42.960 Oh yeah, we want the market to work. But what you do with your own body, what you eat, drink, and smoke, 482 00:47:42.960 --> 00:47:50.960 and how you act, and sexual preference, all that, that's not good for you to make your own decision. 483 00:47:50.960 --> 00:47:57.960 Believe me, young people know and understand that. And the fact that you can reach them in a different way, 484 00:47:57.960 --> 00:48:01.520 Anyway, if they like economic freedom, you can teach them about the other. 485 00:48:01.520 --> 00:48:05.160 If they like personal liberty, you can teach them about economic freedom. 486 00:48:05.160 --> 00:48:10.080 And it is not too many of the young people that get turned off by saying, I don't want 487 00:48:10.080 --> 00:48:11.840 to send you off to war. 488 00:48:11.840 --> 00:48:13.720 I don't want to ever have a draft. 489 00:48:13.720 --> 00:48:16.120 I don't want to ever do this to you. 490 00:48:16.120 --> 00:48:18.640 We shouldn't be going to war unless it's declared. 491 00:48:18.640 --> 00:48:21.800 We shouldn't be financing war through inflation. 492 00:48:21.800 --> 00:48:27.760 And young people like this, they are not anxious to go back to the third and fourth 493 00:48:27.760 --> 00:48:32.960 time to Iraq one of the things during the campaign that I enjoyed the most was 494 00:48:32.960 --> 00:48:36.600 the fact that when they were putting me down so often in Congress and on the 495 00:48:36.600 --> 00:48:40.920 road that's un-American that's unpatriotic you don't care about the 496 00:48:40.920 --> 00:48:46.040 troops and lo and behold guess what when they added up the dollars in the 497 00:48:46.040 --> 00:48:51.200 primary races if you add up all the dollars of all the other candidates even 498 00:48:51.200 --> 00:48:56.160 the Democrats our campaign got more money from active duty military than all 499 00:48:56.160 --> 00:49:09.520 All the rest put together. 500 00:49:09.520 --> 00:49:17.420 One more comment about the summit reminds me of what one of the Federal Reserve Board Chairman 501 00:49:17.420 --> 00:49:24.020 told me one time in the committee when I brought this up about the immorality of devaluing 502 00:50:24.020 --> 00:50:28.180 Punish the Innocent, but this will all change. 503 00:50:28.180 --> 00:50:33.820 But I do want to close by once again praising the Mises Institute for all their hard work 504 00:50:33.820 --> 00:50:39.800 and all the work that Lew has done and all the support that Burt Blomert has given to 505 00:50:39.800 --> 00:50:41.100 the institution. 506 00:50:41.100 --> 00:50:48.620 I'm proud that in the early years I helped the institute get started and it's done a 507 00:50:48.620 --> 00:50:50.100 tremendous amount of work. 508 00:50:50.100 --> 00:50:54.660 I did not believe at the beginning that it would be as large and as influential it is 509 00:50:54.660 --> 00:50:59.820 now because on the road when I would talk to people, there were various people, I said, 510 00:50:59.820 --> 00:51:01.020 what got your interest? 511 00:51:01.020 --> 00:51:07.620 And one of the things they said, well, it was Lew Rockwell and the Mises Institute. 512 00:51:07.620 --> 00:51:13.040 And likewise, I would like to say that a lot of individuals that I have met and have heard 513 00:51:13.040 --> 00:51:19.840 me talk have gone in the other direction because of my support, they have found the Mises Institute 514 00:51:19.840 --> 00:51:26.840 as well. Thank you very much. 515 00:51:38.720 --> 00:51:41.040 Thank you. I'd be glad, 516 00:51:41.040 --> 00:51:44.360 Luce, as we have a little bit of time, I'll try to take a few questions. 517 00:51:44.360 --> 00:52:05.360 I found one of the most interesting conversations we had with the Chairman Bernanke was that we got him to admit that inflation was a tax. How significant do you think that was as far as in the future? 518 00:52:14.360 --> 00:52:24.360 I don't know one thousandth of one percent of the country that know about that and realize it, but no, I think it's very important and of course I used that in the debates as well. 519 00:52:24.360 --> 00:52:38.360 Remember one time they asked me about the income tax and they knew my position and then they came up with a follow-up question on that and since they knew I didn't want the income tax, I said the next thing I would do is get rid of the inflation tax. 520 00:52:38.360 --> 00:52:41.960 But the fact that he conceded that, I think, is pretty important. 521 00:52:41.960 --> 00:52:45.800 And that's the obvious immorality about it. 522 00:52:45.800 --> 00:52:48.040 This whole idea that 40% of the American people 523 00:52:48.040 --> 00:52:51.800 don't pay taxes, they don't pay income tax, literally. 524 00:52:51.800 --> 00:52:55.960 But they get punished, percentage-wise. 525 00:52:55.960 --> 00:53:01.760 If you're making $30,000 a year and barely making it, 526 00:53:01.760 --> 00:53:06.440 and you have the inflation tax, which is now 15%, probably, 527 00:53:06.440 --> 00:53:29.740 That is a high penalty and it's much more harmful to the poor person, but no, I think it's very significant and hopefully we continue to follow up on that to make sure people understand that and to be successful in politics, I think you have to have sort of a populist approach in caring about people. 528 00:53:29.740 --> 00:53:38.740 Too often conservatives and liberals, conservatives and constitutionals and libertarians have been careless and they come across as lack of compassion. 529 00:53:38.740 --> 00:53:43.740 But it is our position that should exude the most amount of compassion. 530 00:53:43.740 --> 00:53:47.740 Because, I mean, just look at this Obama campaign. 531 00:53:47.740 --> 00:53:54.740 I mean, to get close to a billion dollars in donations, you think it all came from poor people? 532 00:53:54.740 --> 00:53:58.740 How can he be the poor man's candidate? 533 00:53:58.740 --> 00:54:21.740 Do you care to comment on legalizing competing currencies? 534 00:54:21.740 --> 00:54:31.740 Legalizing competing currencies, you could just summarize that by saying this legalized freedom, and that would take care of the currencies. 535 00:54:31.740 --> 00:54:37.740 But no, we should repeal the legal tender laws, and that would be helpful. 536 00:54:37.740 --> 00:54:40.740 You could devise maybe some transitional programs. 537 00:54:40.740 --> 00:54:50.740 The case for gold, which was the minority viewpoint of our gold commission report, was designed to allow competing currencies. 538 00:54:50.740 --> 00:54:53.740 I don't think it would be technically that difficult. 539 00:54:53.740 --> 00:54:55.740 We have competing currencies on the world every day. 540 00:54:55.740 --> 00:54:58.740 They fluctuate by the second sometime. 541 00:54:58.740 --> 00:54:59.740 They're up and down. 542 00:54:59.740 --> 00:55:02.740 And you could have a domestic parallel currency. 543 00:55:02.740 --> 00:55:10.740 But the biggest thing we need to do is just, you know, 544 00:55:10.740 --> 00:55:12.740 legalize freedom by limiting government, 545 00:55:12.740 --> 00:55:16.740 making government very small and no need for taxes and all. 546 00:55:16.740 --> 00:55:30.740 It seems like you're alone more, it seems, in Congress. Are there those around you who are coming on to this kind of thinking? 547 00:55:46.740 --> 00:55:49.740 Have you ever noticed that? 548 00:55:49.740 --> 00:55:55.740 But the other members of Congress would come over to me and they would be sympathetic. 549 00:55:55.740 --> 00:55:57.740 Boy, I agree with you on that, but I couldn't vote that way. 550 00:55:57.740 --> 00:55:59.740 How would I explain that? 551 00:55:59.740 --> 00:56:02.740 They think politically it would be suicide. 552 00:56:02.740 --> 00:56:09.740 But it turned out that it was the fact that I took those votes that gave me the credibility with the young people. 553 00:56:09.740 --> 00:56:15.740 Because they would go and say, well, we heard you say this and we wanted to check it out to find it was true. 554 00:56:15.740 --> 00:56:18.100 Wow, you actually voted that way. 555 00:56:18.100 --> 00:56:25.900 But the numbers of people, there's more sympathy there than they express. 556 00:56:25.900 --> 00:56:32.340 They're, but you know, it's going to be overwhelmingly democratically controlled, 557 00:56:32.340 --> 00:56:35.540 which in a way is helpful. 558 00:56:35.540 --> 00:56:39.700 You know, when the Republicans are in charge, it was a real disaster. 559 00:56:39.700 --> 00:56:45.700 The disaster because the party leadership in the House did everything that Bush asked them to do. 560 00:56:45.700 --> 00:56:50.020 and Bush never asked him to cut anything, you know, it was a welfare-warfare state. 561 00:56:50.020 --> 00:56:55.540 So they were carrying the water for Bush and therefore I was the bad guy because I was voting 562 00:56:55.540 --> 00:57:00.260 like I'm supposed to vote whether it was a Republican or Democrat. But now all of a sudden 563 00:57:00.260 --> 00:57:07.300 there has been a shift where if you look in this last year, I imagine, I don't know whether I'm 564 00:57:07.300 --> 00:57:11.460 voting with the Republicans now or the Republicans are now voting with me, but they vote against the 565 00:57:11.460 --> 00:57:15.460 the Appropriations Bill, because they're a Democratic appropriation bill. 566 00:57:15.460 --> 00:57:22.460 And this is the thing that is pretty disgusting, because Republicans were actually pretty decent 567 00:57:22.460 --> 00:57:29.460 in opposing going into bombing in Kosovo and Serbia, as well as Somalia. 568 00:57:29.460 --> 00:57:33.460 I mean, Bush ran on a... he said some decent things in 2000. 569 00:57:33.460 --> 00:57:38.460 We don't want to be in nation-building and policing the world. 570 00:57:38.460 --> 00:57:54.460 Do you think there's any time in the foreseeable future when Congress will limit what the Supreme Court could rule on? 571 00:58:08.460 --> 00:58:13.460 my ways of trying to deal with the abortion issue, taking it out of the hands of the federal government, 572 00:58:13.460 --> 00:58:21.460 but the Right to Life groups opposed that because they liked the thing to go on and on, 573 00:58:21.460 --> 00:58:27.460 and they wanted to wait till we could change the Supreme Court and also have a constitutional amendment, 574 00:58:27.460 --> 00:58:32.460 which, you know, they have a right to work in that direction, but why couldn't we just take away jurisdiction 575 00:58:32.460 --> 00:58:49.460 How do you see your relationship with Russia? 576 00:59:02.460 --> 00:59:32.460 and they have problems now but I think our responsibility is to deal with our problems here at home if we have complaints about Russia or China all these times they bring up these resolutions dealing with you know condemning human rights abuse in the various countries around the world and a lot of times they're very true and I'll vote against all of them and if you how could you vote against the condemning of human rights in China I said well when we take care of Guantanamo 577 00:59:32.460 --> 00:59:47.460 No, I think it's a disaster what we're doing. We're just looking to stir up trouble. 578 00:59:47.460 --> 00:59:54.460 What in the world would we think if Russia was putting some anti-ballistic missiles in Mexico? 579 00:59:54.460 --> 01:00:00.460 But it isn't that I want to treat Russia in a special way. They ask about Israel. 580 01:00:00.460 --> 01:00:15.460 How do we treat Israel? Well, I treat Russia like I treat Israel and I like I treat Egypt like I treat everybody, you know, with an open mind and with a willingness to talk to people and trade with people and do your best to get along with them. 581 01:00:15.460 --> 01:00:26.460 And it's much more beneficial. But this idea that we have to be so confrontational and in their face this whole idea of what we've done in Georgia. 582 01:00:26.460 --> 01:00:31.160 But once again, is there a difference? Are we going to have a change in policy because we have Obama? 583 01:00:31.160 --> 01:00:38.160 No, when the skirmish broke up in Georgia, both Obama and McCain said they'll send, you know, a billion dollars 584 01:00:38.160 --> 01:00:40.160 and they're going to get more than a billion dollars. 585 01:00:40.160 --> 01:00:42.160 But I would treat everybody equally. 586 01:00:42.160 --> 01:00:48.160 They wouldn't get one red cent from us and they would get an open door and we would be friends. 587 01:00:48.160 --> 01:00:51.160 But none of your money would go to any of those countries. 588 01:00:51.160 --> 01:01:12.520 Okay, I'm not getting all, I know you're talking about 401Ks and what else? 589 01:01:21.160 --> 01:01:34.160 The paltry purchase of Treasury securities in 401Ks, would the government be forced to hold them in 401Ks? 590 01:01:51.160 --> 01:01:54.160 New New's having a bit of a problem up in New Hampshire. 591 01:01:54.160 --> 01:01:57.680 And one of the things that's hitting him has to do with Social Security. 592 01:01:57.680 --> 01:02:01.280 You know, he supported the revamping of Social Security. 593 01:02:01.280 --> 01:02:05.840 So his, you know, I want people to have all their own investments in control and spend 594 01:02:05.840 --> 01:02:09.380 their money the way they want, but if the government has a Social Security thing and 595 01:02:09.380 --> 01:02:13.160 then they perceive that they're going to invest in the stock market and tell them what to 596 01:02:13.160 --> 01:02:17.840 do, and he had a tough time defending that, and the Democrat used that against him because 597 01:02:17.840 --> 01:02:26.840 Considering what we know about the executive branch of powers and emergencies, and the 598 01:02:26.840 --> 01:02:41.840 behavior in government camps and the expansion of police and surveillance, do you think there's 599 01:02:41.840 --> 01:02:52.840 Do you think there's a chance that the executive branch might use the financial crisis as an excuse to expand the police state? 600 01:03:11.840 --> 01:03:41.840 I'm not sure that they, two years ago, designed this crisis as it's unfolding, I don't think they have that much control, it just is a flawed policy, but they, you know, go with the punches, and they, yeah, they'll use it, a 9-11, you know, that introduced a chance, they gave them a chance to increase the police state, what did the Depression do, look at what they used that for, 601 01:03:41.840 --> 01:03:47.840 He was always to blame freedom and capitalism and sound money, and that of course is what's going on right now. 602 01:03:47.840 --> 01:03:51.840 That's why this Greenspan thing was so bad. 603 01:03:51.840 --> 01:03:57.840 He was willing to blame freedom and capitalism, lack of regulations, and we just need more government. 604 01:03:57.840 --> 01:04:05.840 So the worse the financial crisis gets, the more likely they are going to use this to further intimidate us and control us, 605 01:04:05.840 --> 01:04:07.840 because the government has to take care of us. 606 01:04:07.840 --> 01:04:23.840 We have to, you know, financially take care of us if there's a financial crisis, but after 9-11 it's physical security, and unfortunately the large majority of the American people have gone along with it, and we are now less free. 607 01:04:23.840 --> 01:04:33.840 Unless we reverse that in a few years, we're going to be a lot less free, but what we're hoping to do is make sure that our views prevail and that trend won't continue.