Banking and the Fed as Enemies of Prosperity

0:00It's very nice to be here and nice to see so many friends and a nice crowd, and I understand part of the program occurred yesterday, and Lou tells me there were a lot of high school kids here, and that's very encouraging, because for me, reaching the next generation is important for all of us. But you know, one thing that we have said, many of us in this room have said it many times, we better straighten up our act, because you know, our kids and our grandkids are going The consequences are hitting us, of course the bills haven't been paid for but the problem of paying for them and the necessity of paying the bills, it's pretty clear to us.

0:47So it is a real delight to come today and visit once again and see the success of the and the Mises Institute, because it was what now, Lew, almost 30 years since Lew started the Mises Institute and Lew had been working at the Congressional Office. He does mention it once in a while, but you know, it's not the neatest thing in the world to mention it. You used to work for the government, but he does, and as a matter of fact, somebody else worked for me in the office and helped me on the Gold Commission report, and that was The Mises Institute has been fantastic in these past 30 years. It really laid the groundwork for so much as what has happened and changed the attitude of so many people. You can't measure it. You don't know what part exactly the Mises Institute was responsible for or somebody else that got interested and studied on their own.

1:53and you can't measure those kind of things but obviously the Institute has had a tremendous impact you know during the presidential campaign I got a lot of credit and continue to get some credit for you know stirring the interest and exciting people about the Austrian School and about freedom and the Constitution and limited government but the truth is is you have to have a The philosophy change, one individual can't do that. It may be that one person can ignite interest, but there has to be some groundwork done before that. And I think that is why the Mises Institute has been so important because it contributed so much to that. But that's continuing. We're winning at the grassroots level. We're winning outside of Washington.

2:43and, of course, we're waiting for the day we're going to win in Washington and really change that place, but we're a lot closer to that now than we ever have been, change in the right direction. We hear a lot of talk these days about members of Congress getting along together as a consequence

3:37I have a friend of mine and we sit right in the middle of the aisle and I think we're very bipartisan because we have Democrats talking to us more than the Republicans are talking to us in the middle there. So, but they're talking about this bipartisanship and I've come to the conclusion, yes, under certain conditions bipartisanship sounds very reasonable. And for the most part, I think we've had way too much bipartisanship over the years. What we've had is an agreement by the majority of those on the Republican side and the Democratic side that they endorse certain policies. I mean, is there really a division with Republicans and Democrats on the foreign policy?

4:24Does one really have a non-interventionist foreign policy and the other a militaristic foreign policy? No, both parties are very militaristic and very aggressive, and they have given us the conditions overseas and the problems that we face today because there's been too much bipartisanship. As a matter of fact, they have argued so often that in foreign policy, you always have to stand behind the president. They've always taught us that you don't have divisions over foreign policy. think about domestic policy is it been really any difference are Republicans really opposed to the welfare state you know they're complaining now they want to repeal Obamacare but I wonder if they're going to repeal Bushcare too and that's what we need

5:15so we have bipartisanship there and certainly there's been bipartisanship on on just about every attack on liberties that you can think of from the Patriot Act on down. Rarely are those programs passed solely by one party versus another. But philosophically, we have way too much bipartisanship. But what I would like to see is the coming together. The other day I had an interview on Fogg's Napolitano, the great Andrew Napolitano. But he had an individual on with me by the name of Ralph Nader, and I know that there's lots of things that we can find about the flaws of Ralph Nader, but Napolitano really ran a great interview because he brought out all the things that we could agree with on the people coming from the left, and then also pointed out how we strongly disagreed with who should deliver medical care.

6:22But there's nothing wrong with talking to people from different spectrums of the political system, especially we who are coming from the freedom philosophy, because there's bits and pieces endorsed by all factions. So our job is to pick the best of each party and those individuals who might agree with us on foreign policy and civil liberties and bring them together and understand it's one and the same thing. and that to me is, you know, in a way a bipartisanship, it is a compromised effort, but you know what they're talking now that what we need to do, we are in big trouble, so we need to compromise and get along with the other side, so what was the, what are the first challenges? Well yes, what we'll do is we'll compromise and they've been doing this for years in a bipartisan and Faction.

7:16What they do is they compromise and they raise the military spending and they raise the domestic spending and they call that the compromise. But there is a better compromise, why don't we compromise and say if we cut ten billion dollars out of this militarism, you cut ten billion dollars out of this welfarism and then maybe we'll get back down to a reasonable budget. But unfortunately, we're not about to reach that point because there's been a lot of talk. There's a change in the elections and certainly in the House there's a change and people ask me all the time, what do I expect? You know, the House is going to do better.

8:01Not so much that their beliefs have really changed, but the politics have changed. And the House members now do not have to take their orders from the President. That was where the problem was before. We had the House and the Senate, and there were so many things that we could have done if they half believed in what they preached. But now, that's not the case, and Obama's a good target, so they are probably going to do a better job in the House, but that's not going to translate into much improvement in the legislation, because the momentum is so great. I think the most important test will be here in the next month or so, and that will have to do with raising the debt limit.

8:53And already, it's a big political thing, and when they need something, like when they need to invade Iraq, or they need to invade somebody, or they need medical care, they drum up all these horrors and already the Secretary of the Treasury has already come to say the end of the world is coming if we don't raise the debt limit. So be prepared, we don't want the end of the world, we just want the end of that government we have up in Washington. But the scare tactics are building and they will scare people into it and just like remember when the the totally unanticipated nobody knew there was a bubble and finally there was a breakdown of the economy in 1907-08 and then that was an emergency and had to do or the whole world would end so in order to have great spirit of bipartisanship we had two candidates one Republican and one Democrat rushed back to Washington and hadn't cast neither had cast a vote for weeks

10:31And of course we knew that Saddam Hussein was on the verge of doing that, so it's always intimidation and fear, and it puts the pressure on the members of Congress, they capitulate, because the people get terrified too. But because we, it's surprising we don't have better results because we have this independent media, and they're always giving us the truth. You think we would figure this out a little sooner, but no, that doesn't happen. They continue, and the people do get frightened. They hear the government saying the end is coming, so this is what's going to happen. The national debt will be increased, but you can say, well, there'll be a victory anyway because they're going to promise, after they raise the national debt, that they're going to cut some spending, and they're going to cut the spending.

11:27You know, it reminds me of what happened in the 80s, and I know Ronald Reagan was a beloved president, but if you look at the statistics, things didn't all that much improve in the 1980s. But he had an agreement. He says, yes, you know, we remember him cutting tax rates, which was very good. I was all for that. But he raised taxes three times, maybe four times, that more than made up for the tax decreases. But on one occasion, he agreed to have a tax increase, and that bill was passed, it was originated in the Senate, came back to the House, was passed under the suspension of the rules, and it wasn't allowed to be amended, which sort of contradicts the Constitution, you know, they're supposed to originate in the House and then go to the Senate, but Reagan's agreement was this, for every dollar that we raise in taxes, you will cut two dollars worth of spending. You know, it just didn't happen.

12:24The deficit just deteriorated in the 1980s and so we can expect the national debt to be increased because nobody wants to end the world. Most of us are supportive of keeping the world going and they're going to be made fearful. So whether it's the fear of the foreign enemies or the fear of our neighbors because of all the scrutiny that we have to have of all our neighbors because there may be a terrorist lurking behind the bushes someplace so therefore we have to sacrifice our liberties, we have to pass the Patriot Act and secret prisons, threat of assassination, giving up the writ of habeas corpus and on and on and it's all based on fear because people for the most part are just so intimidated and can't believe that some of these problems could be solved without government.

13:25But the good news is that our numbers, who believe otherwise, our numbers are growing, and that's helpful. You know, one area that was really a pleasant surprise to me, occurring from the time of the presidential election up until now, the difference, the difference between three years ago or five years ago or ten years ago, as Lew mentioned, I got interested in politics after the obvious setting of the stage for the problems we have today and that was the elimination of any restraints on the secret Federal Reserve to create as much money and credit as it wanted secretly without any supervision of the Congress occurring on August 15, 1971.

14:24But we've had this come and now we are facing this great crisis, which is a financial crisis and a dollar crisis. But the people now are so much more interested. Back then, before 71, after 71, the Federal Reserve always got the credit. They got the credit for full employment and booming times. And then there was an automatic or a necessary slump, the market demanding a slump or recession or liquidation, it would occur and the Fed would get credit for getting us out of the slump. I mean, and they've had it, and nobody questioned them, but the Fed was there to provide and take care of everybody.

15:10The Congress didn't care about understanding it. They probably subtly knew, you know, we can spend money and we can tax a bit and we can borrow, but somehow or another the Fed takes care of it. and we don't want to know too much about it and they had a free ride for all this time until you know 2008 and they haven't and now because of the educational effort at the grassroots level because of the internet and by bringing this forward publicly the people are so much more aware of it and the Federal Reserve is now understood much better than ever before and I had the awakening moment which I mentioned in my book and the Fed, it occurred at the University of Michigan.

15:58You know, we went over to the University of Michigan after we had a debate in Detroit and it had to do with economic policy and that was where I said the economy wasn't doing all that well and that was a no-no because we were talking about a Republican administration and you're not supposed to do that. So we went over and the big surprise at the University of Michigan, there was a huge crowd and I was late because of the debates and traffic and that sort of thing. But they hung around and that was where they started chanting, end of ad, end of ad.

16:36So the name of my book wasn't very original. They gave me the title, but they were really disobeying the law because, you know, it's against the law to deface the currency. You can destroy its value, but don't deface the currency. So that was when they were destroying the currency. They started burning Federal Reserve notes right out in public. So no, it is different. And we've gotten their attention. Who would have ever dreamed that the Federal Reserve would have to hire PR people to go around and lobbyists to go around and explain to congressmen how good they were and get on national TV and the chairman of the Federal Reserve defending himself on, was he on John Stewart or some program like that?

17:24I mean, this is pretty amazing. We have them on the run. They're on the defensive, so that's keep the charge going. And you know, I don't know if you heard, but I have been made a chairman of a subcommittee on monetary policy. Now they tell me in Washington, I'm a very patient person. After 30 years and being denied the committee three different times, all of a sudden, you know, I'm the subcommittee chairman.

18:11The other day we had an organization meeting and a few things came to light. One was that subcommittee chairman cannot demand that the chairman of the Federal Reserve or the Secretary of the Treasury come before the subcommittee. It has to go before the full committee. But we'll still send out some invitations and see what the consequence will be. But they also had a little... We had all the Republicans, this was not the full committees, all the Republicans got together and we got, you know, the subcommittee chairman got to say a couple words about the committee. So my committee, my subcommittee is considered the smallest, most insignificant committee and it's always been it's very small and nobody's ever wanted to be on it and nobody ever paid attention in the past they would have two or three meetings a year and they would talk about what they're gonna do with the dollar bill it cost too much to keep printing them and how are we gonna get the American people

19:08to use gold you know coinage instead of paper and what should we do with the penny and what do we do with this commemorative total coin and even though that was pretty boring I always got on a subcommittee because I considered you You know, the monetary unit to be pretty important. So when they came to me down the line, last one, they said, Ron Paul is chairman of the Monetary Policy Subcommittee. So I said, well, thank you. And I looked around and I said, and I looked at our chairman and I said, is it true that this committee has charge of the Federal Reserve? And they admitted that it was and they knew exactly what was going on. I try to explain to them that you don't realize it, but this is the most important committee in the whole Congress.

20:08If it's the Federal Reserve that has the responsibility of dealing with the value of our currency and can create the business cycle, not only here but worldwide because we're the worldwide Reserve Currency. So that's pretty important. I said, just think about the monetary unit of the dollar. It's worldwide use. All of the currency related to it. And every single financial transaction is related to the dollar. 50% of the transaction is related. So everything everybody does, everything they earn, spend their money, and indirectly the world currencies is related to that. And I saw some people just sort of, wow, maybe that is. But I don't know what will happen, but I do know that I'm very determined to do my very best to do the job that should have been done a long time ago.

21:05So as soon as we were sworn in, I sent my staff over to get a day for a hearing, you know, when's our first hearing, what are we going to do? And they said, relax a bit, we have to get organized, and it was a legitimate argument. And matter of fact, even today, we do not have the names of the Democrats that will will be on that committee. But it is a small committee. There are eight Republicans and six Republicans. I saw, excuse me, it's the other way around. I think the Republicans are, yeah, they're in charge now. Eight Republicans and six Democrats. But it's going to be a different kind of committee.

21:50It's not going to be a committee to demagogue. It has nothing to do with political partisanship. It has to do with challenging Keynes. That is it. And we're going to challenge Keynes and his monetary system. One of the pieces of legislation that's been floating around by others who are anxious to take advantage of the interest in the Federal Reserve, a lot of people are interested in the Federal Reserve now, but they have made a proposal that we remove the mandate of the Federal Reserve to provide full employment. They have two mandates, stable prices and full employment. Well, they claim there are stable prices and they're doing an excellent job on inflation.

22:36Even though commodity prices last year went up 24%, they think inflation has been licked, you know. But the commodity price is, of course, going up, and the unemployment rate, now they've been very successful on unemployment rate. You know, they say, well, they're relatively successful. They only have 9% unemployment, 9.5% unemployed, but even the Bureau of Labor Statistics will admit that it's actually 17 when you talk about the people who are just barely employed that might be working on weekends. When you count them, it's 17%. And then if you look to John Williams from a private number, he comes up with between 22% and 23% unemployment when you count everybody who's given up on looking for work.

23:28I mean it's like the depression on how many people are unemployed and that's why no matter how much they pump up the statistics and the euphoria, no matter how much money the banks make by getting more money from the Fed and returning it to the Treasury and all that gimmickry and Wall Street is enjoying it and they're making money once again. There's still a lot of people suffering out there. And the one characteristic about destruction of a currency is you can't destroy a currency without destroying the middle class and tragically that's what we're involved in. That is why sound money should be the issue because if we care about the welfare of our people, the poor people, the middle class, you have to have sound money.

24:14He can't do it by printing money, spending money and having the Congress do it. So the answer to so many of our problems is to understand the business cycle and why we do need a sound commodity-backed currency. Now the proposal is to remove the mandate for the Fed to maintain full employment. and that I think is just sort of fluff but it's a bill and I could care less about what happens to that particular bill because what if you do remove the mandate? What difference does it make? How is it going to change monetary policy since they do what they want anyway?

25:01You know, and you can barely get the information out. We've gotten some information out about the funds they spent during the crisis but we didn't get a true audit so I'll continue to work on that, to audit the Fed. We're going to insist on that. But at the moment, the tentative plan is, as soon as they give me a date in February sometime, is to have a hearing. And the hearing will have to do with monetary policy and monetary policy as related to employment. And this means it introduces the whole notion of the business cycle. And instead of giving the Federal Reserve this mandate to keep unemployment low and getting credit when it is low, what we're going to do is show them how the Fed creates the unemployment.

25:59They're the ones who are responsible. So the format of the committees will be different. Too often, you know, they're just show hearings. They go in and they have two or three big guns and you go through the whole committee and everybody gets asked their question. Then you go on to the next panel. Sometimes there are three panels and you end up with eight or nine people involved and I never thought they accomplished very much. But my intention is to have smaller hearings. We have the majority, so we're going to gang up on them. We'll probably only have three people testifying at a time.

26:44We'll have two good guys against one bad guy. Now what I'd like to do is get Paul Krugman there on the first go-round. Then I'll go and find a few good economists that comes out of the Mises Institute and we'll put them and stack them against Paul Krugman. But the hearings will be as much to enlighten as to legislate because the main legislation And I am sure they'll give me a little bit of pressure because there will be some coinage bill that they'll want to pass and find out what percentage of zinc has to be removed because we can't afford zinc pennies anymore, that sort of thing, but it will be a serious discussion, it will be small in number, and there's not going to be strict limitation of time where you can barely get your questions in and if people are interested they're going to stay and we're going to debate this issue.

27:51If we do this right and we have the right people responding and I can get the right people to come with this age of the internet and with the age of communications, I think we can accomplish a whole lot by having these hearings. You know, Walter Jones, I mentioned, a good friend of mine, he's on the banking committee and he asked for only one committee, subcommittee, and that was the monetary policy. And he got put on there and he will be the vice chairman of the committee. And he told me, he says, Ron, he says, I want to get on your committee, he said, because, He says, I don't know anything about it and I want to learn something about it and he comes to my libertarian luncheon every week and he knows the speakers that we've had.

28:46So he's very interested, but he wrote me a little note the other day, he said, why don't you have a hearing and talk about the relationship of the price of food and the price of oil as related to monetary policy, which is great because prices don't go up because of monetary Policy, prices go up, you know, according to the establishment, because the farmers aren't doing the right thing, or the Arabs aren't doing the right thing, or something else. You know, I struggled with this holding about inflation and definition, and when I was reading Human Action carefully, Mises would keep talking about inflation isn't the prices going up, inflation is when you increase the money supply, you know, and it pushes prices up.

29:32And I kept saying, well, it's just semantics, forget it, why don't you just call it price inflation and this sort of thing. He said, no, it is very, very deliberate that everybody thinks about prices going up for something other than monetary policy and separate it because they don't want to attack monetary policy. If oil prices are going up, there's some type of strategic reason, geopolitical reason for oil prices go up. In the 70s especially, it had nothing to do with the inflation of the Federal Reserve. I told Warren, I said, this is a great idea, this is a great point to make and see how the dollar supply is related, and since he now is such an anti-war person, he tells me constantly how badly he felt.

30:30He had gut instincts against the Iraq War. And he voted for the war under pressure from the administration. And he's never forgiven himself from this. I mean, he punishes himself almost too much. He writes a letter, hand-signed letter, to every family who lost a person overseas. Thousands of letters that he have sent. But he is so dedicated to this effort. So I told him, I said, you know, also, the relationship of the Federal Reserve and when you worry about oil costs going up and food costs go up, I said, do you realize that in history it's very difficult to find a war that was not fought with inflation?

31:17It's always essentially fought with inflation. Maybe originally they could pay for the wars by stealing enough gold from somebody else, But later on, they started diluting the metal and clipping the coins. And today, at least in the last century or so, it's all been just by printing press money. And that was one of the things that happened right after 1913, World War I, finance that way, then the recession of 21 and on and on. So if our goal is to have more freedom, protection of civil liberties, protection of free markets, and also a more peaceful world. You cannot deal with that unless you understand the Federal Reserve because it can't be financed. There's always a limitation. As long as they can finance through the creation of credit and delay the pain and suffering from that, they're going to do it.

32:12So the real goal is of course to get people to understand why a free society is so much is much greater and so much better than an authoritarian society and why trade and friendship is so much better than, you know, aggressiveness and intervention and militarism. But ultimately it is connected to the monetary system. They just can't pay for it. And we have a major undertaking and right now I happen to be in a place where I can call attention to it, to it, but you're in a place where you can continue to call your attention. The Mises Institute has been doing it for years and years and everyone in this room can continue to do it. So many of you already have in your support of the Mises Institute and other individuals in support of good candidates. And this has been very helpful. But the monetary issue is key, is connected to freedom. I do not believe that you can really succeed at having a free society by tinkering around with a budget, not

33:13not changing the attitude of what the role of government ought to be and not looking at the system of money. The system of money we have today is corrupt, it's run in secrecy, it is evil, it's immoral, it's destructive, and it's confiscation of wealth, as Alan Greenspan admitted many years ago. So this is an issue, it's interconnected, and I think we're making great progress. One thing for sure is that this system will not continue. When I argue the case for non-intervention overseas, I look at them and say, you know, I know I'm not going to win this argument. I know that next year we will not have enough people that will vote and cut off the funding and tell the troops to come home from Korea and the Middle East and Europe and the whole place. It's not likely to happen.

34:04but it but it will end because the dollar will end and that is what we're facing so it is a major event that is a political event and it could occur quickly it could occur soon it could be a year or two or three but it will come and that is why I'm enthusiastic about the preparation that has occurred and the understanding of the young people on why this is so necessary and why self-reliance and and Belief in Taking Care of Ourselves and How the System Works. It is good to think theoretically why it's good to be free, but it's also good to realize that that is the system that provides the greatest amount of goods and services. I mean, if we care about humanity, if we're humanitarians, we have to believe in a free society.

34:52But the opposition so often wins the moral high ground. They say, well, we're the only ones who care about the poor people, so therefore we have to have a welfare state. And we're the only ones who care about those poor people People in Iraq and Iran, and we're going to give them liberty and take care of them. So they're always trying to grab the moral high ground, so we must grab the moral high ground and defend the cause of liberty. Our liberties and our right to our life comes from us in a way totally separate from government. It comes from our Creator. We're born with this. The job of any government, if you were to have government, should be strictly limited to that of guaranteeing and protection that your neighbor never takes your liberties that belong to you away from you.

35:43And if we had that size of government, that kind of government, that government would The people would be very small, the people would be very important, the country would be prosperous. Then, we would set an example for the world, people would want to emulate us and we wouldn't have to go around with guns and bombs and drones and threats and say live like us do because we're good people and we'll teach you how to be good people too. We live in revolutionary times, we're in the middle of this and the final conclusion is not there. I think we're gaining, I think we're winning, and I think in the next five years we'll know exactly what's happening. But it's crowds like this and groups like this that have to be energized because the masses of people never will automatically join. They have to come to the conclusion that it is in their best interest to fight for the cause of liberty and reject the notion that the government can take care of us from cradle

36:37to grave. Thank you very much.

37:06Now if I didn't talk too long, I'm allowed to take a few questions and I don't know how 2012

37:41Funding in 2012 or even in 2011, except in 2011 I know that I will be involved in the Monetary Policy Subcommittee. I have not made any decisions about exactly what I'll be doing in 2012. Basic research. I don't think the government should fund basic research but the argument the argument is going to be well some of this is very good and they've accomplished a lot of good by doing it but you don't know maybe they would have accomplished more if it would have all done by the private sector when the government gets involved sometimes special interest gets involved in drug companies and different companies get to spend that money it flows to the universities it's driven by by Special Interest.

38:38There could be an argument for some basic research or maybe for some military protection. But right now, I think we have all the weapons we need and we don't need a whole lot bigger weapon. And you know, one other thing about the smaller weapons and the smarter weapons and all these fancy little things, they're dangerous because they're allowable to get us into a big war. So no, other than that, theoretically, you You could justify some research for absolute defensive purposes, but no, all this R&D that we subsidize, it would get done and probably much better without the government politicizing it.

39:34He asked about what will happen when the interest rates go up and they will go up. Even this last go around, they didn't lower the interest rates like they really expected them to and although they have a lot of power and they do regulate and they keep interest rates lower than it should be, which is one of the basic flaws in the system, it doesn't can always work that way. Sometimes when they create new money and credit, interest rates actually go up instead of down. No, it'll be devastating when the rates go up. That'll be in the midst of the crisis. When you start seeing, if you see a 10-year Treasury bill at three something, if you see it at 5%, 1.5% jump from where it is, boy, I would think Boy, I would think that there's going to be, it could excite the rapid exit from the dollar.

40:33And because it wouldn't be so much that, oh, this is great, I'm making more money from my treasury bills as much as nobody wants our treasury bills. So, and then there, the 1% increase in the interest rates, I don't know the number offhand, but 1% increase in the interest rates for the national debt raises the national, you know, expenditure enormously. And that's out of control of legislation, and when you get to that point where even the Fed can't lower the interest rates, then we're in big trouble. I guess then, maybe then they'll turn on the printing presses just to print the money.

41:25He asked about could the gold not be there in Fort Knox and should we check on that? I said yeah I think we should. The audit bill said a full audit of the Federal Reserve and since they list that as an asset that would have meant that we could look at the gold. But you could go to Fort Knox, and they might show you a lot of gold, but that wouldn't describe the swap arrangements, the agreements, and whether they've loaned the gold out, and all the things that they have done. And I think the gold is in four different places. I think there's some in upstate New York, West Point, I think it's in New York, and Denver, as well as in Fort Knox. So a true audit is not easy.

42:18I remember, and Lew will probably recall this, because when we had the gold commission in the early 80s, I forced a vote in the commission to go on record for auditing the gold, and I think the vote was 15 to one against auditing the gold. They'll claim there is an audit going on every year, they count a little bit and all. But no, I think that would be very important to know. The one thing that I have in the past will continue to what I press them on is, you know, gold is not money, we're not, it's not important. Of course, the richer countries and those who are getting richer, they're buying up the gold like China and the people in the East, they're buying it and the West is selling the gold. So, but, you know, I've said to them, I said, if gold is not money, why don't you just return it to the people? You know, let the people have, let everybody go on their own gold standard.

43:16And my idea, of course, the solution of this is just allowing competition and freedom and making sure that gold and silver coinage never has sales taxes or capital gains taxes and it's legal to transact in it. I think that would take care of the problem. Do you hear it? Well, I don't think that is likely to happen, but maybe the best we can do is read Greenspan's speech in his article that he wrote for Ayn Rand, which would be pretty good, too.

44:14Do you comment on the use of federal dollars to help strengthen the borders?

44:44If you had fences and everything else, they'll still come in if there's an incentive. So we should reject our welfare state, both domestically and for, and at the moment, anybody who comes in, not qualify for any handouts, free school or free education, free medical care. But ultimately, you know, they wouldn't be, the immigration problem wouldn't be nearly is big. If we had a healthy, thriving economy, the resentment comes because people say, hey, they're stealing our jobs and they have to blame somebody. So I think we have to have a free market economy. There are so many other things, no benefits. But there's a legitimate expenditure if you want to spend money on the borders. But I think the money is there.

45:37I think it's these other policies that are more important than just beefing up the borders. But the borders, I mean, living in Texas, we hear about and know about what it's like down on that border. And it's getting worse and worse. But I would say 90% of that has nothing to do with some poor Mexican wanting to survive by coming up here. 90% of it is due to that drug war that ought to be ended. That's where the trouble comes from.

46:30I think I basically answered that question, yeah. You know, if you have a problem, declare war. Under war conditions, they can undermine our civil liberties, and that's what they do, no matter whether it's a war against illiteracy or a war against drugs or wars overseas. That's when you're supposed to compromise and give up your freedoms. So, yeah, we don't need a war on drugs. We need education. We need education. I do consider drugs very, very dangerous. I consider alcohol very, very dangerous. I consider prescription drugs very, very dangerous, and psychotropic drugs very dangerous, but I also assume that the responsibility falls on the individuals, the families, and the local community, and the churches.

47:27She's talking about, what has 20%? You won 20%? I wouldn't want to tax the American people, raise their taxes by 20%. If you have money in your pocket, and you've earned it, and your life is your own, the money you earn is your own, and you have a moral right to spend it any way you want. And if a poor person can't pay $100 for shoes and he can pay $10 for shoes and he can buy them from China, he should buy them from China. But our problems are much more complex than that, just buying goods cheap from China.

48:21in China, it's that we don't have a work ethic, we borrow, we're consumerists, and we have the benefit of the reserve currency, we get to print the money and spend it overseas, and that money comes back and feeds back into our economy, it's that system that has been so bad and encourages jobs to go overseas. Our export, we have a great export, it's money, dollars, and they're still taking them. As long as they will, believe me, the jobs are going to go overseas. Getting cheap products from overseas is not that bad, even if they subsidize. Let's say it costs them $50 to make an item and they're going to sell them to us for $25. Well, that's $25 you can stick in your pocket and spend it on something else. So an import tax is a tax on the people. Most of the time it's a tax on the poor people.

49:10One more question. Oh, we'll go over there.

49:19How did Alan Greenspan go from being too long-ranged?

49:49has said some things, you know, a little sympathetic to gold and the things that he once believed in. Anyway, it looks like Lew is calling this to a halt and I want to thank everybody for coming. I enjoyed it. Good luck.