Paul presents his case against the Fed to packed McGuire Hall

By: Tony Levero

Posted: 2/2/10

He has been portrayed as a gold-crazed anarchist by his opponents and as a relentlessly principled visionary by fans. Whatever his reception, Congressman Ron Paul never fails to draw a strong reaction, and he did just that when he spoke to a capacity-filled McGuire Hall last week.

The Republican representative from Texas' 14th District integrated his "Case Against the Fed" as part of the Moral Foundations of Capitalism lecture series led by Dr. Thomas DiLorenzo of the Sellinger School of Business which was funded by a contribution from the BB&T Foundation.

Dr. Paul stressed that he takes every opportunity to speak to young people: "I consider the idea of liberty to be a young idea. Dictatorships, authoritarianism, and kings and tyrants have been around for thousands of years. I feel that the college kids, the young people, are responding so well to this idea of liberty."

He recalled a crowd of 4,000 students that gathered to support him at the University of Michigan during his 2008 presidential campaign. The students began burning dollar bills in protest against the Federal Reserve's policy of inflating money and chanted "End the Fed!" which later became the title of Paul's latest book.

Not one to shy away from controversial topics, he took a surprising stance on same-sex marriage for some Republicans: "I don't think the federal government needs to tell me about marriage. In fact, I sort of like the idea that you don't even need a license to get married." He made the argument that economic liberty is akin to moral liberty.

The Congressman mentioned that he was the only member of the House of Representatives to vote against a measure to send troops and funding to Haiti following its earthquake. He reasoned that the danger of America becoming an occupying force was too great a threat to the struggling nation and that greater good could be accomplished with private contributions: "I believe in charity, and I believe the American people will do that. The best export we could send to a country like Haiti is to introduce them to the ideas of liberty."

While he spoke impromptu and digressed into other issues, Dr. Paul consistently came back to his main topic - the abolition of the Federal Reserve. He believes the Reserve, which functions as a branch of the federal government by controlling interest rates and minting new money, is responsible for much of the economic turmoil that the United States currently faces. He advocates a return to the gold standard, a monetary system in which each dollar is backed by some amount of gold or precious metal that each treasury note is redeemable for.

Each dollar under the current system only holds value in relation to the trust people hold in the U.S. government. This can fluctuate greatly, especially in times of economic trouble. The fault Paul finds with this is that it grants the federal government the ability to coin money in limitless supply to pay for programs "Everything we do in Washington today is dependent on the creation of new money," he explains. He reasons that in addition to granting the federal government dangerous power, it racks up debt and weakens the purchasing power of the dollar abroad: "The system has come unraveled, and all they're doing is transferring the debt. Where are they going to get the money - borrow more from China? Well, they're getting reluctant too."

Still, Congressman Paul is optimistic that there can be significant changes to the system. His bill to audit the Fed has passed in the House of Representatives and awaits a vote in the Senate. While the Fed has never been required to disclose specifically which groups receive funding - like bailouts - the bill would require some level of transparency.

Paul believes that it most likely will not pass the Senate. "But 80 percent of American people polled believe that we should audit the Fed. Still, the significance is that they can't ever get rid of this issue anymore. The people know that there's something terrible going on in this country. There's been an explosion of interest in the ideas of liberty."

Before his January 27 lecture at Loyola, Dr. Ron Paul granted The Greyhound an exclusive interview:

Q: Why did you make young people a central focus in your Presidential campaign?

A: Because they responded so favorably. Ever since the presidential campaign the college and high school kids have been very interested in the whole philosophy of limited government. Young people are starting to realize what they're inheriting - the debts, and that the jobs aren't readily available. They're excited about a different type of foreign policy, where we're not obligating our next generation to fight continuous wars.

Q: What was the greatest success of that campaign?

A: Two things: one being interest in a non-interventionist foreign policy and trying to get away from being the policemen of the world. That, and an interest in monetary policy. It used to be that no one talked about the Federal Reserve, but now everybody's talking about the Federal Reserve.

Q: With Fed Chief Ben Bernanke's reappointment imminent (he has since been confirmed), how do you rate his performance?

A: Compared to other Feds, he's rather typical, except he's a little excessive. He's an inflationist, he prints money at will, and he's a central planner. But he's like all the rest; if you didn't have Bernanke, someone else would be doing something very similar.

Q: What role did your experience as a physician play in your participation in the health care debate?

A: It gives you a little different perspective, but I think my understanding of economic policy, individual liberty and the Constitution has a lot more to do with what we should do with medicine.

Q: To what extent are economic textbooks to blame for people's misconceptions about the economy?

A: About 99 percent.