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Nov. 26, 2021 - Ron Paul Liberty Report
18:03
The “Strategic Petroleum Reserve” Boondoggle -- Abolish It!

It's not the business of the U.S. federal government to "stockpile" anything. But as usual with government, the "emergency" and "fear" cards are used as excuses for it to stockpile oil. However, we know not only from theory, but from practical experience, that in any emergency, the very last people that you want allocating resources are people in the federal government.

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Time Text
Oil's Political Role 00:13:46
Hello everybody and thank you for tuning in to the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, welcome to the program.
Dr. Paul, it's great to be with you again.
Very, very good.
You know, in the past week, one of the most interesting things going on in the economic field was this announcement by the president and the planned implication of releasing oil from the Strategic Petroleum Reserve.
You know, we know everybody knows there's inflation, which they don't define correctly.
Of course, the prices are high and people are worried and gasoline prices are going up.
So there's price inflation going on.
And of course, our argument is it comes from the Federal Reserve and the Treasury printing too much money, devaluing the currency.
That's what it is.
It's too much money in the devaluation of currency because we spend too much money.
So everybody knows that, but nobody wants to cut spending.
You don't, right near Thanksgiving time, you don't go out and say, we're cutting this and cutting this and we're bringing our troops home because you would be in serious trouble.
But anyway, Biden had to do something.
So he did what most politicians have done in the past, try to manipulate the prices.
The worst time in my lifetime, even though it's been done several times, is the wage and price controls.
The ones that Nixon put on in 71 was atrocious and caused a very, very difficult decade in the 70s.
Well, Biden has a long way to go to catch up to what Nixon did, but he had to do something.
So he said, well, the price of oil is too high.
We have to lower it.
And we have this oil stashed away in a hole in Louisiana and Texas.
But it's safe and secure there.
That's in case there's a strategic emergency.
We're at war and we can't produce enough oil.
We can always have this as our backup.
But no, it dawned on Biden and his friends that we could have a political stunt.
What we'll do is we'll just announce that we're going to release this and release some of this oil, and then that'll increase the supply, and the price will go down, and everybody can go back to driving and never think about it again.
Chris, for some reason, that's a little bit simplistic, but in a way, that's how they think.
And now we have the evidence that they tried it.
Hasn't worked out so well.
No, and you know, Dr. Paul, that oil is a political commodity, you know, kind of like medicine.
Government is intertwined.
It's a web of government and big corporation cronyism.
So that's unfortunately how oil is in our world.
And when that's the case, it is used primarily for political purposes.
You know, they shut down pipelines, prevent drilling here.
You know, it's all politically, these decisions are made.
And, you know, at the root of it, bureaucrats like having the power over your gas tank.
That's a great power for them to, you know, a great lever for them.
And as Dr. Paul mentioned, you know, and we hear this, you need this strategic reserve.
What if we're invaded?
Well, first off, the chances of that are minuscule.
You know, nobody is coming to get us here.
And even if that, let's even grant that and say that that was possible and was to happen.
You still don't want government allocating resources.
The market allocates resources in a far superior way than government.
You don't want Nancy Pelosi allocating oil or Mitch McConnell.
So the strategic so-called reserve should be abolished.
Get that oil into the market, into private hands, because if there ever was an emergency, we definitely don't want politicians allocating resources.
Well, that's for sure.
And there's two prices that should never be manipulated, and it causes more harm than good.
One is the price of goods and services, and what they do is they go and have wage and price control.
But the other thing is interest rates.
And those two things have been regulated over a long period of time, especially the interest rates.
And that's why we're in the mess that we're in.
But the price of oil, the one thing is, is they were so naive.
They said, we're going to put out 50 million barrels of oil.
And it sounds like a lot of oil.
It turns out it would last about two or three days in world consumption.
So it was really not relevant.
But the markets did what Biden wanted them to do and hoped it was going to last longer because oil dropped sharply.
Oh, all this extra oil.
But that was just an emotional reaction to it because it didn't take too long for the oil prices to start creeping up again.
And they're almost back up to where they were before.
But I'm predicting that they're going to go up a lot more over the next year or two.
This inflation of goods and services has really just begun.
And oil, of course, is going to be a very important factor there when prices do go up.
And that's why they thought if they could keep the price down, but they can't do it.
It interferes.
And on long term, it's going to be much worse by them messing around because the supply should be dealt with by prices.
And if the prices are going up for various reasons, if there was a market reason, it'd be different.
But if it's going up for political reason, that's a bigger problem because they want everybody assumed, well, it's the government's fault, and the government has to do something about it.
Yes, and this is good for them to, it's good that they have this supply there.
But you know, it was never meant for that.
This was meant for strategic security of the country.
So it's all a force.
But back then, it was beneficial to the oil producers.
And quite frankly, I don't think that our safety in the world of nuclear weapons and all this other stuff is going to depend on taking oil out of a hole in one ground and spending a lot of money pumping it out, then pumping it in another hole.
And then if you need it, you have to go down and pump it out again.
There's other ways that can be done.
We achieved a lot of that activity, economic activity, during World War II, and they didn't have to have a strategic reserve.
But anyway, it's there.
I don't think it really adds to our security.
And it's become a political tool, which we don't need another political tool.
So long term, I suggested, and I actually voted against it when I was in Congress.
And we have a storage area here not too far from where I'm speaking.
It is in the congressional district.
And they go and carve big holes in the salt dams and pour the oil in.
But it's a political tool only right now.
And it should be sold off.
and maybe someday we will wake up.
But we will expect that these kind of conditions are going to continue because inflation is going to be with us.
And this is the one that just hit home.
But what about meat?
Prices of meat's going sky high.
And I saw the other day where somebody was proposing that we kill all the little piglets because the farmers, not that there's a shortage of meat for poor people, but the farmers are having trouble.
And if they kill some pigs, the prices will go up.
They did that in the Depression.
So it's all this intervention.
They get obsessed with intervention.
They don't even care about the market.
They don't know how the market works.
So that's why the greatest danger, just as I argue by COVID, is the reaction to something, some things that are natural, is the real danger.
And that's what happens when the, but in this case, it's when the government creates an economic problem, or they give a solution and they create two new problems.
That's what happens.
And believe me, there's going to be a lot of demands.
This is going to be a big deal.
And it's going to be very political.
Right now, it's serving the interests of the Republicans over the Democrats.
But eventually, though, people are going to be very, very upset.
Just more fuel for the fire or for the culture of Marxists when the shortages really come, which is usually what happens under these conditions.
Yes, Dr. Paul made some great points about the Fed adding to this, you know, because they're not mentioned very often, but they played a huge part in the rising oil prices.
And it is a political tool.
And what I wanted to move into is the grand political totalitarianism that so many of these people that are so-called elites want.
And that's this totalitarian system based on climate.
And oil obviously plays a very big part of that.
And you could go back decade after decade after decade.
They have been trying to scare people with climate.
You could go back to predictions from Paul Ehrlich, Al Gore, to even AOC saying we have seven or 12 years.
It's just been a constant barrage of trying to scare the American people.
And it never worked.
You know, thank goodness.
But you know what came along that did work is COVID.
And now the fear has been accepted.
The totalitarianism is piling on on keeping track of everybody, your movements.
You're going to have to show your passes.
And they're trying to transition this.
You're already starting to see it in the headlines.
I saw a headline that babies may have heart problems because of climate change.
I mean, which is so outrageous.
But, you know, you could see them trying to shift it now to this climate religion and zero carbon.
And you know what?
It's the same thing that they're after, totalitarian control.
And it's the same people that are doing it, both the COVID and the climate.
So, I mean, it's right in our faces.
And they're using the same excuse, the science.
You know, and what we've seen in the last two years, it has nothing to do with science.
That's just their magic carpet that they ride in to impose their tyranny.
So, you know, we have to keep a big picture overview, what they want, how they're going about it.
And they're going to fail at this.
It's already failing.
But, you know, we just have to keep our eyes open and keep strong with the words of liberty.
Very good.
The conditions we have today are very frustrating and getting the average consumer and the American citizens very upset and nervous, which they should be.
But the economic system we have here sometimes is blamed on Biden and his socialism.
Well, Biden doesn't have a concise philosophy, but it's not, in a sense, socialism.
It has socialistic attitudes because there's more government control.
But we're seeing the end results of excessive interventionism, where special interests get political influence and get certain regulations and benefits coming from the government.
So this interventionism leads to problems like this, and it leads to excessive spending and inflationism, and then you have the inflation, and then you have to react to that.
But the big problem there is the inflationism also invites corporatism and money and financing going to corporations.
So the corporations become very, very powerful, and COVID has proven what kind of relationship there is between large corporations and, for instance, the pharmaceutical industry.
The pharmaceutical industry was always a political tool and a special interest group.
But now with COVID, it is a big deal.
And they work in collusion.
They work together, which means that it will not be stable because this opens up the door to what we're seeing.
And the aggressiveness of what we have today is the aggressiveness of cultural Marxism.
And because they want chaos, and they're getting chaos with no matter how it happened, you know, getting rid of the police and saying that the police can do anything they want and people have a right to steal because they need stuff.
Anything that causes chaos fits into the scenario of the cultural Marxists because they want to have total chaos so they can remake the world in the image of really serious Marxism, which would be socialistic where the government controls everything.
Conditions Worsening 00:04:06
We're not there now, but if we wake up enough people, I think we can shift the gears to moving in the direction of a freer society because what we're having now, if we don't change, conditions are going to get worse a long time before we will improve ourselves.
Right, Dr. Paul.
I'll finish up by saying, yes, our problem and this strategic reserve stuff fits into it is hyperinterventionism.
And, you know, the best advertiser for liberty, I wish it was libertarians, but it isn't.
It's the government itself.
You know, what it does and all of its failures as it just keeps piling on one on top of another, on top of another.
Ultimately, the people reach a point where they won't take it anymore.
It just comes too close to home, and that's it.
They've had enough.
You know, and it's tough as libertarians, especially Dr. Paul, since he went into Congress in the 70s, telling people, you know, we don't have to go down this road.
You don't have to be okay with this, with the money printing, with the wars, with the interventions everywhere.
But, you know, it is part of human nature to be trusting, which in and of itself is a good thing.
We have to trust when we go to eat in a restaurant.
We have to trust who's cooking it.
We have to trust in the products that we buy that they're not going to fall apart.
So it's a good thing, but it's never a good thing to trust people in power because it's very different than when you're dealing with people voluntarily.
And people in power, they will deceive you, just as they have done.
Look at what they have said over these two years, and they just keep going.
One deception after another, one lie after another, without stopping, with no regrets on what they said in the past, just go on to the next one.
So ultimately, the misery will hit so hard that people will have enough.
And at that time, the time will be ripe for the ideas of liberty to take hold and gain the upper hand.
And, you know, let's all do our part to help bring that about.
Chris, great, great statement.
You know, we chose this item because it's an example to point out the kind of system we have now, how we got to this point, and now we're seeing all kinds of price inflations and the people getting very nervous, demanding more government.
And I've always argued to case, and I've said it many times, is that unfortunately the immediate reaction to whether it's the business community or any special interest group or the average citizen, prices go up, so they don't have enough money.
So they assume incorrectly, well, what we need is more money.
No, you need more value is what you need.
You need more purchasing power, and you don't need a system that systematically undermines the value of the currency and causes prices to fail, giving us the information that we need.
So, yes, we see this consequence of this here, but there's nothing that says that we can't change our tune.
Most people, you know, at least give a little bit of lip service to, oh, yeah, I guess we ought to cut back.
Even Republicans, we need to do this.
We need to follow the Constitution.
But they don't do it.
And I think that as conditions get worse, this hope they wake up and say, you know, maybe those libertarian free market people have it right.
Maybe excessive government is the culprit.
And I would say it certainly is.
And the culprit is excessive spending and believing that you can get very well-to-do bureaucrats like Fauci and pay them a lot of money and they will solve all our problems.
Well, it doesn't work that way.
So this is the opportunity for us to think about where we came from and what we can do.
And I say we should move in the direction of personal liberty because I am quite confident that is the system that will provide the maximum opportunity for us to promote peace and prosperity.
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