My Years With Alan Greenspan

0:00Thank you very much. It's real nice to be here. It's nice to see a nice crowd like this. On a nice day, we could all be out planting our gardens and raising our tomatoes and a few things like that. But I'm delighted to see everybody. I also would like to first introduce my wife Carol, who is sitting down here with me. And also today two other people came and they're from my staff. There's Penny Freeman and Susan Ashbrook. Are they in the audience? There they are, right here. They're probably going to hang around a little bit longer than Carol and I will because we have another engagement to get to.

0:46and we will be leaving shortly after I finish because we're in the middle of a hot campaign, you know, we have a primary on Tuesday and we did get an opponent in the primary as well as in the fall. Hopefully we're going to survive it all but we nevertheless try to stay on our toes. One of the goals that I've had over the years has been to take the philosophy of libertarianism and Austrian economics and present it as clearly as I could and straightforward as I could to the people that I'm looking for votes and then get elected. Not only that, to really test what we're trying to do in changing the course of the country is to not just talk about an issue, but then when one gets to Washington, have that individual vote accordingly, regardless and which on the surface, it seems to be very unpopular and challenging because, you know, on an occasion or two, I have to vote by myself to make that point.

1:54but the goal really is can an individual do that, stick to those principles and then get re-elected and so far we've been able to do that so the election serves two purposes, one to decide who's going to represent the district but two to decide whether or not this philosophy can be followed at the same time be endorsed by the people and this I think is a very important issue. You know not too long ago I had an invitation to travel to Europe which is something which is unusual for me I don't get too many of those invitations and Carol and I quite frankly we don't travel that much and I'm on international relations and most individuals get on international relations for one purpose they like to travel but I also I also have this personal principle that I follow that I don't take any junkets so So, that leads to very little traveling.

2:55But I was invited to go to Prague this spring, and we've agreed to go. And why that is interesting is that the University of Prague has translated human action into Czech. And they're excited about this. And when they told me about it, I got excited about it too, and found it just fascinating. They wanted to find somebody in the Congress that even knew or understood or cared about such a subject, so they didn't have much choice. They came and asked me, and I, of course, agreed to go and we will go. Now the reason why I find it interesting is that you all know that Mises left Europe and Austria under very, very dire circumstances, and he escapes the Nazis.

3:45He comes to America at the age of 60 and then at the age of 60 he learns English and then at the age of 60-something he writes Human Action in English and to me that just blows my mind I'm still struggling with English so this is a wonderful thing and now this book, this wonderful textbook that Lew has done so much to promote is such an important textbook on economics that The Czech Republic is next to Austria, so I'm going to be the emissary. I'm going back to that part of the country to celebrate something that Mises would have been very proud of, and since I've never been to Austria, I think I'm going to make the full round trip and I'm going to go to visit Austria as well.

4:41So to me, that's an exciting event. Another invitation I just received I think might interest you a little bit is last week a member of the Mexican Congress came to see me and flew up specifically into the Houston area and I met with him and he thought, well, maybe they're coming to talk about border security or something, but no, there was something much more specific and much more interesting. He wanted to come and talk about their plan and their scheming to reestablish a silver Silver Standard in Mexico, and they're very serious about it, and they have a bill that's passed the Senate, and they have 322 co-signers in the House to reestablish silver as a legal competing currency to the Mexican peso.

5:28And he came up just to talk about it and explain it to me, because he knew I was interested in it. Once again, he looked around the Congress to find somebody who might be interested in the silver standard, and he called me. But his real reason for coming up, which I found fascinating, is he invited me to go to Mexico City and go to their capitol and go to their congress and give a one-hour lecture on monetary policy to the members of the Mexican Congress. And I thought, well, you know, I've never heard of that. I said, are you sure that's what you want? And he says, yeah, that's what we want. I said, well, it wouldn't happen in the United States. I barely can talk about it in the United States, about hard money and sound money. But what they have proposed is a competing standard.

6:15And it's probably less than perfect, but boy compared to the continuation of fiat money without any competition whatsoever, this to me is a bit exciting. So I do plan to go down there and do that. But you know, the other day, just a very brief comment about some of the things happening in politics, the other day I was talking to somebody in our district and she was very despondent about what was happening because some of the Republicans haven't been all that pleased with my voting record. And they had a meeting and they brought another individual in that they were hoping would be a challenger to me in the primary. and they they just told him they said that they really needed somebody and this was a Republican organization they said we really need somebody to stand up and run against this Ron Paul we can't stand what he's doing because he won't vote with the president and and they said besides that he is so determined and so

7:22bullheaded he always votes for the Constitution no matter what it does to The Republican Party! And one lady got up and she said, but I thought that's what we sent them to do. But those are the kind of things that go on and we'll find out how deep that sentiment is. I'm hoping it's not too deeply felt throughout the district, but it will be a test on Tuesday on how important that is. And it is important to a lot of Republicans, you know, that you don't support our President. But the other question should be, does the President support the Constitution?

8:08That should be, you know, the better question. But I think that it's just great that we're able to get together here and talk a bit on this subject. And Lew suggested I talk a little bit about what it's like to have been in Washington for a period of time when we had the great Alan Greenspan, the great objectivist Austrian economist become chairman of the Federal Reserve. Of course, he became Federal Reserve Board Chairman when I wasn't in Congress. I had been in Congress from 76 to 84 and left and went back to medicine, and he became chairman, you know, in 1987, in August of 1987. And I think within a month or so there was a major stock market crash, so he ushered that in.

8:55Of course you can't blame him for that, there's no doubt about it, it was the previous inflation that set the standard and he tinkered when he shouldn't have been tinkering with interest rates and of course the stock made a minor correction of 25% in a day or two. But it has been interesting. I went back into Congress in 1997, and he has had to come before the banking committee twice a year to present the case for his monetary policy. Of course, today, in the last several years, nobody cares about monetary policy, and it's sort of just a stage for propagandizing Keynesian economics and whatever the administration wants, whatever their position is on taxes, he's there to promote it.

9:42But he has been coming in and out there and he also comes before the Joint Economic Committee on which I sit, so I've had quite a few encounters with him and have been able to ask him a question or two. And there was one time shortly after I got back that they had a little session with Greenspan before the committee meeting started and we went in and we just had a chance to get our I took a picture with the great maestro, and I knew this was coming, so I had come back and dug up the Objectivist newsletter, which was printed in the 1960s, I think it was 1966, and it was the original copy of his article in Golden Economic Freedom, Golden Freedom, and it was in Anne Rand's newsletter.

10:34So I took that with me, and so when I was getting my picture taken, I sort of flashed I stood out there and I showed him this booklet, it was a bit faded, and I asked him, Mr. Greenspan, do you remember this? And he said, yes, I do remember that. So I opened it up and I said, do you remember this particular article? He says, I do. I said, well, I'd like you to sign this for me. So he took out his pen and he said, yeah, I'd be glad to sign this. So he took his pen out and started signing it, and I said, do you want to write a disclaimer on this article? And he says, then the bizarre thing happened, he says, no, he says, no, I just read that recently, and he says, I wouldn't change a word of it. So what does that do? That raises more questions than answers, but at least he stuck to his guns on that one.

11:27and that one. But over the years that subject came up off and on and he always answered the questions in the usual way by not answering the question. But there were certain things that annoyed him more than other things because there were times when I would challenge him about the concept of what happens with the Federal Reserve and why they are participants in the runaway spending in government. He, like most Federal Reserve chairmen, whether it was Burns or Volcker or whoever, would argue, oh, it's your fault. It's the Congress. You need to cut back. We don't like deficits. You know, it's always Congress and the deficits. So I would point out to him, I said, well, you really are a participant in this.

12:13I said, you know, if we live within our means and we paid our bills and we didn't have the opportunity to print the money, don't you think Congress would have to live within their means and they wouldn't have this opportunity? I would throw it back in his lap and I said, you're a participant, you're part of the problem. That tended to annoy him. He did not like that. But at the last session that we had, I was much, much more specific. We don't have a lot of time. We have a total of five minutes. I get letters back and they'll say, well, why didn't you answer back and why didn't you ask this? This, and they would have all kinds of suggestions, but we're very limited, and if the five minutes is up, you're done, so I generally use my five minutes to try to make a point or two.

13:00But I actually quoted from his Golden and Freedom article, and he more or less said exactly what we all believe, that the monetary system is important, it's a confiscation of wealth, it destroys the middle class, I mean, it's just a great article. He became more annoyed than usual when I was much more specific, and he said, well, those are views I held 45 years ago, and I don't hold those views any longer. And so he was much more explicit than he was when we were off camera in the room and he was signing his little article. So the real question is, where does he really stand? There have been people theorize about this and I know Alan Greenspan is really with us.

13:47He is once a gold standard person, you're always a gold standard person, and they would argue that case over and over. And you know, when it's finally all over, it really doesn't matter what his deeply held beliefs are. There is an old saying that you never look to the Fed to what they say.

14:38and the type of central planning that always and inevitably fails or whether it's the central planning through manipulation of interest rates and money supply and all the things that the Federal Reserve does. But you don't have to worry. I mean, Greenspan's gone, so I guess all those problems that we had with Greenspan we don't have to worry about anymore because now we have Bernanke and he's going to take care of us, you know, with his new ideas. Bernanke has been before the committee just on one occasion so far, and the question I used to sort of get him on the record on his visit there, which happened a couple weeks ago, was the idea that the Federal Reserve would no longer relay to the Congress or to the people or to anybody who cared the money supply figures.

15:31They have dropped as of this month. The M3 will no longer be reported. Now there are shortcomings in M3. M3 is not a perfect number, but it's helpful. It's the total money supply. And you know, if it goes up, like this week, it went up $50 billion. That gives us a little bit of message on what's happening out there. $50 billion? Do you think we increased our wealth in this country by $50 billion? So there is an indicator. it's an indicator that's that's worth looking at even with its shortcomings so I asked him about that and he said oh nobody follows it anymore nobody cares about this and it's just so unnecessary but then he told me the real reason I finally got the information the real reason why they can't do this anymore if they cost too much money to accumulate those statistics he's saving I told him, I says, come on now. I said, save your money, you print all you want. I said, you have all this money, you're not even on the books, you're off the record, you're off budget, you get to print all the money, and you're telling me that this is the same money.

16:42I mean, that is, I didn't say this, but that is about the silliest explanation I have ever heard. I believe that the precise reason that they drop entry is because it's too revealing and it tells you what they're doing to the money supply. You know, Mises in Human Action argues that inflation has to always be thought of as a monetary issue and not a price issue, certainly not a government price issue. And in my mind, early on I used to argue in my mind with Mises, I said, no, you just This has got to go with it. This is just semantics. Inflation is when the prices go up. Just concede this fact. And his argument was no, that's what they want you to do. Think about the prices and then you tinker with prices and blame other things and then you usher in wage and price controls and all the other things. But you always have to hold their feet to the fire and say that you have the problems of inflation because the Fed creates it. I

17:46And I think the other important thing that Mises points out is that there's a lot more to look at than just the prices going up. Think about the malinvestment, the misdirected economy that we end up with and the deceit and the way it finances governments and all these problems. So then I decided that that is what has to be done. You don't ever want to allow them to take it away from the money issue and I think that's Precisely What They're Doing. And this is one of the reasons that we got into so much trouble in the 30s is they kept reassuring themselves in the late 20s that there was no problem. Even though they were inflating, they said, CPI is not going up.

18:32Everything is fine and dandy. Productivity is up. But they didn't look at the problem of accumulated debt and the malinvestment that occurred. And believe me, we have two problems today. We have a lot of the malinvestment. We have this horrendous debt way over what we had in the thirties and the productivity actually is lower than it was then. So not in numerical terms, but we have this problem of distortion and deceit and directing our attention the wrong way. So this was the reason why I happened to bring that subject up with him in order to try to To me, the money issue has always been very, very important.

19:20The money issue is important for a lot of reasons. I started talking about this in my very, very first race, which was in 1974, and I've continued to talk about it ever since. And although the dollar still operates, it's operating with less confidence than it has ever. I believe, quite frankly, that the experiment with worldwide fiat money that started on August 15, 1971 is coming to an end and that we need to be prepared and that is the reason why I am always so anxious and pleased to come to events like this because I haven't told you anything new, you already understood this, but I come to encourage you to study further and to promote these ideas and also to really compliment the Mises Institute because Because they are dedicated to promoting the principles of liberty, which means that you have to have honest money.

20:16And I believe long term that education is the answer, not politics. Politicians aren't much use. And the changes will not come with even, it would be sure nice to have two or three or four or ten more close allies in Washington, believe me. We could do some other things, but the change in the country will come when the people's attitudes change. Now the problems that are accumulating here, I see as an opportunity, because all of a sudden, you know, people are going to say, hey, who are those guys that were talking about this all along? That's more or less what happened to me in the 60s. I'd been reading and study and then starting to buy coins here and there, and I knew by The Austrian economist was right, I suspected it and believed they were, but I was totally convinced.

21:24That's what we have to do now, not have one or two or three or four people have their beliefs confirmed. We have to have thousands of people with these views confirmed. Delighted to see young people here, students here and teachers here. This is great because this means that we can reach out to more people and that they can be prepared because if we do have a crisis then we have to substitute it with something. Now the plan they have in Mexico is they're trying to head it off and I think this is a good plan. It was more or less the plan that we had at the Gold Commission and that was to have parallel currencies. Don't, even though it wouldn't be a too bad idea, don't close the Fed down tomorrow, totally and completely, but let's just legalize true competition, true hard money, where it does have a legal tender status, where it doesn't get taxed, and you don't have sales taxes on money and capital gains taxes, and allow currencies to compete.

22:23That to me would be a proper way for a transition, but in the meantime, this is an educational and we do have you know a few allies planted in the media John Stossel who's well known by the average person who watches only average television realize it you know he's out there talking our language quite frequently another friend that is a friend both to Lou and to myself is this Andrew judge Andrew Napolitano who's on Fox now if you have to watch Fox you got to be

23:28me talking to other members of Congress I mean I think that's just a small little thing but in in in a way it's helpful some people say well how in the world can you even survive up there I said don't you all don't you get awfully frustrated with with always standing up for certain things voting by yourself and never getting your stuff back I said no I never get frustrated I just have have low expectations. So I don't hold my breath, but in the same sense, you know, we do have allies on the war issue. There are two individuals in Washington that voted against the war for the right reasons. They come from the old right, the old Republican position, the original Senator Robert Taft who talked about non-intervention, staying out of NATO and these other things and never having a military draft.

24:23And they voted against the war and that's John Hosteller and Jimmy Duncan from Tennessee and Hostellers from Indiana. More liberal Democrats voted against it. So instead of me being alone and completely by myself, I figure everybody there is a potential ally and one day or another they are. So not too long ago there was a vote by a member of Congress who's a good friend and he's with me on civil liberties on the war issue. He ended up, it was an attack on Hamas. This was a difficult vote for me because the attack, I didn't feel like we should go and attack Hamas. I mean, I thought we were fighting and dying and spending all that money to promote democracy. And now as soon as we get it, oh, we don't like it, so we've got to get rid of Hamas. So our attack was to deny them foreign aid, and I deny everybody foreign aid.

25:10But when I vote against foreign aid for another country, neighbors of the Hamas group, I get in a lot of trouble. But I still, I vote against all foreign aid, so I ended up voting against it. But only one individual stood up and voted, you know, not to deny the foreign aid. He wanted the foreign aid still to go, I'm honest. So I saw him after, and I said, you're in trouble. I said, I have the record for voting by myself more than anybody else, and I said, I don't want you encroaching on my territory. So he was kidding me. He says, where were you? He said, you left me out there standing alone. So, but you know, another individual not too long ago sent me a note. I sent out a little script, and I gave it as a speech, and you may have read it on the internet.

25:57I think Lew had it on his website. It had to do with real reform. You know, how are we going to take care of the Abramov reform? Well, we're going to regulate you, put more restrictions on your right to petition and lobby Congress. Sure. That's going to solve the problem. Do you think there are enough laws in the books now to take care of corrupt congressmen? Yes, called theft and fraud. We also have elections, you know, a lot of ways you can handle these problems, but no, they're going to tinker with these rules and regulation. So I sent it on, I said, the real reform means A, B, C. One is to look into the money issue and look into the war policy issues, not allowing the president to go to war without declaration, you know, the whole list of things. And it was an academic exercise, but I sent it to every member of Congress, and four of them read it. Well, the one individual sent me a little note back, which is very interesting and very

26:46surprising that anybody would read it, but I was pleased and flattered, but he sent me a little note back and I thought I'd just read this to you and then we're going to pause and I'm going to get some questions because time is running out and I'm gabbing too much. But here it says, Ron, he says, many thanks for searching for a new direction, speech. I intend to steal liberally from it, while ignoring, of course, those parts which inconvenience my immediate political goals. He says, I'm not proud of this aspect naturally, but I'm working on paring down my own philosophical shortfalls, paring his shortfalls down.

27:36He says, you are a dangerous person, an honest man. And he signed it. I thought that was pretty nice. But anyway, I'd like to go ahead and conclude and tell you, I really want to thank everybody. Thank you, Lou, for inviting me. And thank you all, because there are so many supporters here. And I think we're going to be successful this year and make sure that this philosophy has a stamp of approval by the people of the 14th district. Thank you very much.