Myth-Busters! Things Are Not As Government Makes Them Seem
On this episode of Myth-Busters, Ron Paul tackles The Fed, dispels the ISIS fear-mongers, catches the terror opportunists red handed, and even throws in some economic wisdom. Don't miss it!
http://www.ronpaullibertyreport.com for more libertarian commentary.
On this episode of Myth-Busters, Ron Paul tackles The Fed, dispels the ISIS fear-mongers, catches the terror opportunists red handed, and even throws in some economic wisdom. Don't miss it!
http://www.ronpaullibertyreport.com for more libertarian commentary.
On this episode of Myth-Busters, Ron Paul tackles The Fed, dispels the ISIS fear-mongers, catches the terror opportunists red handed, and even throws in some economic wisdom. Don't miss it!
http://www.ronpaullibertyreport.com for more libertarian commentary.
Hello everybody and thank you for tuning in to the Liberty Report.
Today we will talk about myth-busting.
And with me is Chris Rossini, who is the editor of the Ron Paul LibertyReport.com.
Chris, good to see you today.
Great to see you again, Dr. Paul.
Thank you.
Well, are there any myths rolling around out there that we might address and see if we can clarify things?
Yes, we have some good topics to cover today.
I'm looking forward to today's show.
Let's start with the great enabler of many of our country's major problems, the Federal Reserve.
If there's one thing that our viewers should always keep in mind is that when inflation occurs, it's always, you know, you always want to point to the source, which is the central bank, the Federal Reserve.
And that's despite what happens with the media.
They try to blame everybody else and everything else under the sun.
But inflation is always a monetary phenomenon, and blame should always go to the Federal Reserve.
Now, what happens when prices go up is the government, in its desire to help, quote unquote, often comes in to institute price controls.
And the combination of central bank inflation and price controls are like a one-two punch on the public.
The government takes a bad situation and makes it worse.
So please, Dr. Paul, talk about price controls and how if inflation hits in our country, that people should not look to that direction.
You know, one of the reasons why there's a lot of confusion about where inflation comes and what we should do about it is the fact that not everybody agrees with the same definitions.
On my going back and forth with Paul Krugman, I argue the case that his definition of inflation is different than mine because he says inflation is when the CPI goes up, which is a government statistic which they can alter at will.
If it goes up too fast, they just change it.
But Austrian economics teaches that inflation really is the increase of supply and money and credit, especially when it's artificial and comes from the Federal Reserve.
You can have an increase in the supply of money in a natural way when it's a commodity like gold.
And that, of course, doesn't cause the problems of the malinvestment and prices going up.
So the price inflation is what people think about and they're concerned about.
And the unfairness of it all is the fact that if wages went up equally and prices went up equally and the cost of living went up equally for everybody, it'd be no big deal.
Increase the money supply by 10%, everything goes up by 10%.
But that never happens.
Some people get hurt more than others.
Some people get rich, other people get poor.
So it's a vicious cycle.
But when it gets out of control and prices are going up too quickly, the interest in people who want to regulate and say, well, it's going up and the people don't know what they're doing.
They're charging too much.
We have to regulate labor and regulate prices.
So we have wage and price controls.
And some people who like to control wages and push wages up like the minimum wage up don't realize that they're endorsing the principle of keeping wages down when they think they're going up too fast.
So they reject the marketplace.
And wage and price controls have been used for like thousands of years because they've, for thousands of years, have artificially increased the supply of money.
And they won't accept the fact because I think they realize it, but they don't want to admit the truth.
Because if they admitted the truth, governments would have to quit spending and not have debt that people won't buy, and they don't need a central bank, or they don't need to clip coins, or whatever happens.
But today, inflation is a serious problem, and it's not because the consumer price index is going up, even though it is much more than the government admits, it's because it's caused so much distortion in the marketplace, and there's so much malinvestment that there has to be a correction, and controls won't solve the problem.
A lot of people from the liberal side argue that, well, all we need, yes, we know the Fed's involved, but we just have to have better regulations.
No, the market should regulate it.
We should have the money supply dictated by the marketplace, and we would avoid a lot of harm and injury.
So, there's a lot to be said about understanding the basics of inflation.
And if you did understand that, you would come to the conclusion that we don't need a Federal Reserve System, we don't need central banks.
What we need is free markets and sound money to solve the problems.
Right, and I hope that people remember that because we may have inflation in our future, and please don't look to government to solve it.
Let's move on to, I'd like to refer to our friend now, Tom Woods, who likes to call, he's coined the term a three-by-five index card of allowable opinion.
Foreign Policy's Deadly Consequences00:08:54
And these days, on that index card, Americans are supposed to choose which problem the government should concentrate on.
Which is the bigger boogeyman?
Is it climate change or is it radical Islam?
So, for obvious reasons, radical Islam wins and because it generates the most fear, and it's very scary to look at some of the things that they do.
But our argument is always that it's a matter of foreign policy, that a bunch of radical religious people are able to do a lot of what they do because nation states are able to fund them and give them weapons and to carry out a lot of these atrocities.
And we could go all the way back and even further in this, but we could start during the 1980s when Ronald Reagan decided to intervene and back the Mujadeen with Osama bin Laden to get the Soviets out of Afghanistan.
Of course, that was none of the U.S.'s business.
And Osama bin Laden then went on to start al-Qaeda, and Al-Qaeda branched out into ISIS.
Please, Dr. Paul, talk about how the big worry is U.S. foreign policy and other governments too in funding and creating these monsters that now the government is asked to solve.
Okay, I'll do that, but first I'll list, I'll put my priority where I think the biggest problem is, and that's the size and growth of our government and the undermining of our personal liberties.
But that's very much connected to your question about what's going on with our foreign policy, how that is a source of many of our problems, and why ISIS is not the sole cause of the problem.
Yes, our policies have encouraged the growth of radicalism, but what has happened is because there are some radicals that actually turns out that we support.
You indicated that, you know, the Mujahideen and the Taliban we've supported in the past.
We've encouraged Hamas, the growth of Hamas, along with Israel's support for this.
And now we're very much involved in pushing ISIS, mainly because we think ISIS, or we pretend that ISIS will go after Assad.
And so the whole effort of our allies right now in NATO and Israel and Saudi Arabia, everybody wants to get rid of Assad and they're willing to subsidize and push ISIS.
But then for them to turn around and say the whole problem is not our foreign policy contributing to the rising up of people who want to be radicalized.
The whole thing is they say radical Islam.
If you don't say radical Islam, then you won't admit the truth.
So they want to say that Islam is the problem.
To me, that's sort of like saying, you know, Christianity is the problem because we have the Ku Klux Klan that claims they have Christian ideas and principles and that they only follow those principles.
Well, how many people would be willing to accept the fact that the Ku Klux Klan states the religious principles of Christianity?
And that's sort of what is going on here.
And if there is a danger, and I believe there is a danger of what we're doing there, but it's not, if we don't understand it, what the candidates are saying so often is that what we need to do is bomb and kill more people rather than saying, how did we contribute to it?
How can we back off?
How can we moderate this a little bit and not say that it is all Islam?
Maybe the fact that our policies have led to the killing of 400 Muslims in the past 14 years.
So that has to play a role in it.
But they say, oh, no, that really isn't.
You're ducking it.
You're un-American.
You don't want to, you know, you want to blame America and this sort of thing.
But the foreign policy that we have is deadly.
It's deadly for us because it costs a lot of money.
It kills a lot of people.
It causes a lot of friction.
Just look at the results.
The results are disasters.
Look, there's chaos continues in Afghanistan, in Iraq, and look at what's going on in Syria.
Look how we've contributed to the mess in Ukraine.
And look at where Libya has been.
And it's only when we get involved that these conditions just deteriorate.
And a lot of people believe that, no, we're well-motivated, and we're the exceptional nation, and it's our personal moral responsibility to be the policeman of the world.
So if there are any infractions on our standards overseas, we have this obligation to correct it.
That's absolutely wrong.
It costs too much money.
It destroys our liberties here at home, and it makes us very unsafe overseas.
So I think it's time the American people wake up and say, let's change our foreign policy because it's nothing but trouble for us.
Yes, and the trouble that it often produces and an interventionist foreign policy breeds is blowback when people fight back against being attacked and bombed.
And after blowback occurs, politicians, the opportunists, come out and look to increase their power.
So for example, after the recent blowback that occurred in Paris, tragically, American politician opportunists have been tripping over themselves in seeking to capitalize on what happened.
For example, the FCC chairman is suggesting expanded wiretap laws.
I saw Chris Christie come out and it was complaining of how the CIA was defanged by this president.
And even Ben Carson, this quote that I'm going to read caught my attention.
He says, I think we should have a database on everybody who comes into this country.
Hopefully, we already have a database on every citizen who is already here.
If we don't, we're doing a poor job.
Please address the opportunism that occurs after blowback.
So we have the problem of blowback, which means that when people feel like we've done them harm, invaded their country and killed a lot of their people, they don't have tanks and planes and navies to come and attack us and try to throw us out of their country.
But they can use the technique which people refer to as terrorism, and that is just go and put bombs in places that get our attention.
And that just means that the answer by those who believe in neoconservatism, the Dick Cheney types, is that we just need to kill more.
They're still crying that losing 60,000 people in Vietnam wasn't enough if we'd have only kept doing it.
And people say the same thing, you know, about Iraq.
We left too soon, and we should have more troops in there, and we should put more troops in Syria.
But your point is, is that it also affects us here at home, and the candidates can't wait to attack our civil liberties.
Why should attacking our liberties and the problem magnifies?
You know, it keeps getting worse.
So we lose our privacy.
Just after 9-11, we had the Patriot Act passed within days, and the greatest threat becomes domestic.
Now, our oath of office is we'll protect against all enemies, foreign and domestic, but we haven't had a threat of a foreign invasion in a long, long time.
And we haven't had a declared war since World War II, but we've been suffering a whole lot.
But we have been suffering as a consequence of our misinterpretation by the politicians who want to be tough.
And believe me, there's a race, except for Iran.
Everybody in the Republican primary are arguing the case for more and more militarism and dropping more bombs, which is precisely the problem.
It reminds me about the Fed.
The Fed gets into trouble by creating money out of thin air and running up debt and spending.
And then they run into problems.
They say, well, we have to print more money, spend more money, and have more debt.
And then they wonder why it doesn't help.
So I would say we need to wake up, look at policies, and use a little bit of common sense so that our safety will reflect a free market and a system of liberty here in this country rather than depending on the size and scope of government and us playing the role of world policemen.
Can't Create Capital Out of Thin Air00:04:09
Right.
Okay, Dr. Paul, today is Black Friday.
So we're going to switch to a little bit of basic economics.
And this is a good topic for people who are spending their money today.
We live in an upside-down Keynesian world where savings is considered like the bane of civilization.
And fortunately, we've had the works of Austrian economists like Ludwig Vagnis and my personal favorite, Murray Rothbard, who pointed out that savings are the bedrock of civilization.
They're really the starts the advancement of humankind.
And today, however, we have so many that believe that a Federal Reserve official going and typing into a keyboard can create capital out of thin air by just creating money.
This is the opposite of the truth.
And so please let's discuss savings.
Yes, and this is the issue of capital.
Where does capital come from and the issue of savings?
That you can't create capital out of thin air.
You have to earn it and you have to save it.
If you think of it in a more primitive economic system, I think you can have a true understanding of what happens.
So if we're living in a primitive society and we don't have a central bank and we don't even have a lot of exchange, even though in a primitive society you would probably have silver and gold exchanging.
But what if you were producing just enough to live on?
You'll survive, you will.
But what if you have a tool and you're able to produce more than what you use to live on?
And if you take that and you're able to use it in a primitive society, trade it or use exchange, and you can even buy more tools or you can invest in other things or buy more land or whatever.
But you can't do that if you have this more primitive society and say, okay, you know, here we are.
We're just under subsistence.
We need some help.
So we're going to elect a board who's going to declare what money is.
We'll use beads or rocks or stones or pieces of paper.
And then all of a sudden we'll be rich.
And they claim, that's what they claim they're doing.
And it makes no sense whatsoever.
All it does is it gives people power.
Now you say, well, if it doesn't make any sense, how did it happen?
Well, all money, according to Austrian economics, has to originate in the marketplace.
So what about the Federal Reserve note?
That didn't originate in the marketplace.
Originally it did.
It originated with the dollar.
So we had the dollar historically was backed by currents, by metals.
Even in my lifetime, up until 1965, you could still go in and buy a silver dollar with a Federal Reserve note.
But it's long gone.
It was certainly the last linkage.
It was eliminated in 1971.
So you cannot create wealth.
You cannot create capital.
Capital is the excess of what you consume.
And the more productive you are, the more you have to invest or save or protect for your future or allow somebody else to use it.
You might just be a saver and then let somebody else invest.
But what about the conditions today?
If you want to be frugal and you want to save the money and protect your future, you don't make any interest and prices are still going up.
So it's the worst system that you could conceive of.
And then they wonder why there's no economic growth.
Well, if people who are in charge and the people of this country don't look to the monetary standard and look to the Federal Reserve, believe me, we're going to be in the doldrums for a lot longer.
But it's not that complicated.
It's common sense.
We've had a taste of it and we can do a much better job than we've ever had before in devising an economic system based on free markets, property rights, and sound money.