CNBC "Kudlow & Company" - Transcript
MR. KUDLOW: Texas Congressman Ron Paul who is also a Republican presidential candidate has not only raised a quick 7 million bucks over the Internet in just a couple of days, but earlier today he took Fed Chief Ben Bernanke to the woodshed and administered a relentless attack. Look at this.
REP. PAUL: (From videotape.) There's a dollar crisis out there, and people's money is being stolen. People who have saved, they're being robbed. I mean, if you have a devaluation of the dollar at 10 percent, people have been robbed of 10 percent. It's going to lead to higher interest rates and a weaker economy.
MR. KUDLOW: All right. Joining me now is the aforementioned presidential candidate Texas Congressman Mr. Ron Paul.
Mr. Paul, welcome back to the program. Sir, seldom have I seen such a licking applied to a Fed chief, and I have been around a while. I see you grinning. Let me just ask you first of all, what was the major part of your beef with Ben Bernanke?
REP. PAUL: Well, my big beef is that nobody looks at the cause of our problems. And the cause comes from the Federal Reserve creating too much credit and distorting the markets. And everybody bugs the Fed, all the congressmen and everybody else, and Wall Street says, you know, what we need is more money, lower the interest rates. And nobody asks, how do you lower interest rates? Well, you do that by creating more money. And we have to get back to the sound fundamentals of finding out why you have inflation, why you have malinvestment and why you have bubbles. And it comes from the Federal Reserve creating too much credit.
MR. KUDLOW: What specifically would you like to see Mr. Bernanke do right now?
REP. PAUL: Well, I said he was between a rock and a hard place, and he is. What he does is going to be wrong, because we need a new monetary system. But in the mean time, you know, if he inflates, he destroys the value of the dollar. He destroys the value of the dollar, we get inflation, we get a weak economy. So there is no easy answer. But we certainly have to talk about the causes and move away from this monetary system. If anything, he should be more careful with the amount of new money he creates out of thin air, because eventually this will just lead to loss of confidence in the dollar on the international exchange market, and that's exactly what's happened here in the last month or so. The dollar is going down sharply, and it's because we're resorting to inflation.
MR. KUDLOW: Well, you're quite right about the dollar going down. Let me ask you, in terms of the new monetary system -- and without question, you are the only presidential candidate delving into these issues which are, of course, of great interest to investors everywhere. What kind of new monetary system would you like to see? Do you want the dollar to be gold-backed again? Would you like to go back to fixed exchange rates? Give us a sense of where you'd like to go.
REP. PAUL: Well, we should follow the law, and the law is the Constitution. And the Constitution said only gold and silver should be legal tender. We don't really have clear authority to have a central bank. Jefferson and Jackson got rid of a national bank, because they didn't like it. We've only had a central bank for a relatively short period of time. But we can't get rid of the Fed in a day or a week, but we could legalize competing currencies. I mean, we compete with currencies around the world all the time. Why can't we have gold and silver competing as a currency and let people save. Get the taxes off currency. You can't tax money. So there's a way to develop a competing currency under the current situation. And if people don't like the fiat currency that continues to lose its value, they can opt out and start dealing in gold and silver.
MR. KUDLOW: Are you going to make that part of your plank, part of your argument, the competing currency? Which I think, sir, correct me if I'm wrong, was raised years ago by Friedrich Hayek. I think he raised that -- Nobel Prize winner. Are you going to make this part of your campaign?
REP. PAUL: I have in the past, and I will continue to do it. Hayek actually would allow the marketplace to develop the competing currencies, and I think that's not a bad idea, either. So I sort of support the Hayekian viewpoint. But even with the government involved, they could change the tax laws and allow the competing currency to develop more smoothly.
MR. KUDLOW: Am I the only interviewer with you, sir, who has raised Friedrich Hayek's name?
REP. PAUL: No, but it's good to hear his name. It's very rare that anybody does. But I have to say that "The Road to Serfdom" had a lot of influence on me in my early years.
MR. KUDLOW: Indeed, "The Constitution of Liberty" as well for me. Let me go to your phenomenal fundraising story in our remaining moments, sir. It is reported that you've raised up to $7 million in the new fiscal quarter, almost all of that on the Internet. It is a huge amount of money. What can you tell us about this?
REP. PAUL: Well, it sometimes is bewildering, because we didn't organize it. It was spontaneous. It's a real grassroots effort. Some individual in Florida I have not met nor have I talked to -- I surely need to thank him. But he's 37-years old and never been in politics in his life, read what I stood for and said he needed to help me. And he organized it himself on the Internet. And he did it on November 5th, and he was disappointed he didn't raise more, but on that 24-hour period, he raised, what was it, 3.4 (million dollars) or whatever. I mean, a huge amount of money. And it means that the people are very unhappy, very disgruntled and that we've tapped into this uneasiness with a message of freedom and the Constitution and sound money and balanced budget and also a foreign policy that makes a lot more sense than what we have.
MR. KUDLOW: Where are you going to put this money?
REP. PAUL: It's going into what the people sent it for me to do and that is to campaign, buy television ads and radio ads. We've been very skimpy on the way we hire people, and we will remain skimpy, but we will be hiring more people, and we are going to run a very well- organized campaign.
MR. KUDLOW: In these upcoming ads with all this money, what would your central message be, sir?
REP. PAUL: The message in the campaign -- actually, the overall message is freedom and the Constitution, limited government, free markets. You know, I am for free trade. I'm for less taxes. I want to get rid of the income tax. I want to let young people out of Social Security. And the kids on campuses applaud loudly for that. But I tell them the only way we can do that is we have to save money somewhere. And I would, you know, do something about our American empire, because it's not being run very well. We're wasting a lot of money, and we should be taking care of our people here at home.
MR. KUDLOW: If you don't get the Republican nomination, will you consider running as a third-party candidate, either as an independent candidate or, as you have in the past, run as a Libertarian candidate?
REP. PAUL: I have no plans to do that, no intention, and it's an overwhelming task. And I have to just continue to pursue what I'm doing right now.
MR. KUDLOW: All right. Congressman Ron Paul, sir, we thank you very much for coming back on "Kudlow & Company."
REP. PAUL: Thank you.