Ask ten different people, and you’ll get ten different answers.

Ron Paul speaks softly and carries Mises. The eccentric, famous, and infamous Texas congressman has a frail frame and a frailer voice. “I am not powerful, but my ideas are powerful,” he says.

Everybody knows his name. Everybody talks about him. But nobody can agree as to who he is.


He’s America’s most prominent libertarian, and he has the college and yuppie fans — fond of styling themselves “fiscally conservative but socially liberal!” — who come along with that. But it’s not that simple; for example, Paul strongly opposes abortion rights. Many are surprised by that. But Paul continually tries to convey — despite the confusion of the mainstream media — that his pro-life advocacy is consistent with, indeed bound up with, his libertarianism: Both protect the right to self that every person (and Paul considers the unborn to be persons) possesses. The congressman is also surprisingly vociferous in his opposition to illegal immigration, which might be considered a turn away from laissez faire economics. On same-sex marriage and the death penalty, Paul’s political priority is to protect states’ rights to decide for themselves, but he personally leans right.

So does that mean Paul is another typical conservative? If you believe establishment Republicans, definitely not. During the 2008 Republican presidential primaries, Rudy Giuliani took offense to Paul’s claim that the September 11 hijackers were motivated by American aggression and meddling abroad. Paul spent the rest of the campaign answering the question, “Are you in the right party?” Paul maintains that he presents the essence of true conservatism — that he is the voice crying out in the wilderness, reminding American conservatism it had gone astray under the influence of “neoconservatives.”


And to hear Paul talk about American imperialism, our military-industrial complex, and the nefarious influence of Leo Strauss, you might think he was a commentator for Democracy Now!


Some say he’s an isolationist. He says non-interventionism is different. Some say he is a corporate tool and shill for the rich. He says his libertarian opposition to corporate welfare is just the opposite. Some called his 2007 proposal to cut size of the federal government by 40 percent radical and dangerous. He asked whether 1997 — when federal spending was 40 percent lower — was really such a radical and dangerous time. Some say he’s a bigot, pointing to the notorious newsletters bearing his name. He says his brand of individualism — and its attendant politics — is the only curative to group-hatred (and his supporters maintain that Paul was not responsible for the content of the newsletters). Some say his tendency to earmark bills he knows will pass — and then vote against them — is hypocritical. He calmly explains that insofar as government is going to spend so much, better congressmen control it than administrators.

Paul’s preference for abstractions and philosophical pronouncements over canned and screened reactions has made him something of a Rorschach politician, his many words an inkblot into which others may read their dreams or nightmares. Hence, perhaps, the enthusiasm of both Paul’s fans and his detractors.


Paul, however, says his political philosophy is quite simple: “I’m a constitutionalist.” And he takes it as a sign of the times that his faithfulness to an originalist reading of the Constitution — which he claims forbids the existence of the Federal Reserve, among other government creatures — engenders such confusion, so many accusations of both radicalism and reaction.


Two things about Ron Paul are for certain. The first is that he’s quixotic — unquestionably a little weird, and probably unelectable to higher office — but a necessary gadfly reminding us of our lost constitutional liberty. The second is that Paul, the author of End the Fed, among other books, has been selected as the new chairman of the Subcommittee on Domestic Monetary Policy. The man who wants to end the Fed will now be overseeing it (as far as Congress can oversee the Fed). NRO’s Matthew Shaffer talked to Paul about that oversight, his economics, the presidency, and more.

NATIONAL rEVIEW oNLINE: What new powers will you have as chairman of the subcommittee on domestic monetary policy?


RON PAUL: I won’t have many new powers. It’s not about power for me. I’ll have a better position from which to publicize and get attention for my ideas.

nro: Speaking of ideas: Yours are considered strange and radical by some, but now there seems to be an uptick in interest.

PAUL: Before two or three years ago, this could have never happened. It was only because of the crisis that the Austrian economists predicted came about, and people said, “Hey, maybe these guys are on to something.” I think that helped me get the job, because I’m really not mainstream in the House here. But now people are looking for alternative answers.

nro: Even people like Michele Bachmann are showing up to events on the Austrians now. Do you expect cooperation in your agenda from the full committee and Republican leadership?

PAUL: I don’t expect them to agree with every single thing, but I think they’ll be cooperative in letting me run my hearings, propose alternatives, and so on. And I expect them to support the effort to get more information from the Fed. The new people coming in certainly should be very supportive, because a lot of them ran on these issues — more transparency in the Fed.

nro: Are you going to try to use your influence there to, as per your book title, “End the Fed”?

PAUL: Not directly. Indirectly, though, yes. The Fed will end because the system we have is not viable. All printing-money systems always end. So my goal in the book as well as in the committee is to expose the Fed for what they do, how important it is economically, why they don’t achieve what they pretend to achieve, and why they need to have more transparency. I would just like to legalize competition, legalize the Constitution, and allow people to use gold and silver as legal tender. And then if people don’t like the paper money, they can start using gold and silver in savings accounts or spending or whatever. Today if you do that, you go to prison.

nro: So your goal is to end the federal government’s monopoly over currency, essentially.


PAUL: That is it. It has monopoly control over supply of money and credit. And it was never meant to be that way. Under the gold standard, the supply of money is dependent on the market and the interest rates are dependent on savings rather than the Fed dictating the interest rate.

When I first came to Congress in the Seventies, gold wasn’t even allowed be owned. It was ’75 or ’76 when it became legal again. And some people used gold as a protection back then. It was $35 an ounce and now, look, it’s $1,400 an ounce. So it’s a system that deserves our attention.

nro: You’re pretty confident in your economics. So why do you think the Austrian school of economics has been so outside of the mainstream, not always respected by the academy or board members of the Federal Reserve?

PAUL: It’s the failure of their views. Not many people think there’s going to be a wave of Communism in the world in the near future, because the collapse of the Soviet Union was a major historical event that proved that radical socialism does not work. And I think what we’re witnessing now is the conclusion that Keynesianism doesn’t work either, that the money, inflationism, corporatism, regulatory systems run wild, spending, and deficits — all that stuff is failing. And that means that now people are looking to the Austrian school that says we should have sound money and balanced budgets and no government regulation of interest rates or regulation of the money supply.

nro: But there are conflicting narratives. A lot of people say that deregulation was responsible for irresponsible investments and the financial crisis.

PAUL: That’s a really important issue. That’s what always happens. That’s more or less what they said in the Thirties. We had inflation in the Twenties, then the collapse of the financial bubble, and then the depression. But they said, “If only we had had a lot more regulation . . . ” So they added regulations and prolonged our depression. I think it was when Long-Term Capital failed, Sarbanes-Oxley came in and said we needed more regulations. We already had the Securities Exchange Commission and everything else, but they wanted more. And many companies went along with it.

I see the opposite. I see the arbitrary regulations of government as a major cause of our problems. Many people ask me, “If you’re not for regulations, how do you control things?” Well, in the marketplace, there are a lot of market regulations — and you don’t have the moral hazard of a government guarantee. If you mess up, you go bankrupt. In free-market banking, for instance, the directors who set up the bank would be personally liable if it went bankrupt. Can you imagine how much more cautious they would be? They wouldn’t be making all these wild loans and responding to the regulators saying you must make certain bad loans to people who don’t qualify.

So regulations are very negative when they come from government. What we need are more private-property regulations, more market regulations. So far, we’re doing exactly the wrong thing. We had the recession come because of too much spending, too much debt, too much taxing, and too much regulation. And so we’re trying to solve the problem by spending like crazy, regulating like crazy, printing money like crazy, and taxing. And then they wonder why things are getting worse.


nro: It seems like that carries over to the moral hazard introduced by the implicit guarantee of banks that are “too big to fail.”

PAUL: Sure. And one of the things that I complained about for eight years or so about the housing bubble is that Fannie Mae and Freddie Mac had a line of credit to the Treasury. It had only $2 billion, and that wasn’t very much, because it was hundreds of billions or trillions that got involved with these derivatives. But the idea that the Treasury was supposed to come to their rescue implied that they can run roughshod. And then there were all these regulations and affirmative actions that said you must make these loans. That was really the basic problem, but the Fed accommodated by creating all this credit and that’s how we got into this mess. But it was the line of credit that created the moral hazard.

nro: Were you prescient about that in the early 2000s?

PAUL: Oh, yeah, that was my motivation to run for Congress 30 years ago. I thought interest rates were always too low. Nobody wants to make interest rates very high, deliberately. But the low interest rate misleads the businessman and makes him think there’s been a lot of savings, and therefore it’s proper to have more capital investments. And that’s why they overbuild in various areas. And these moneys flow into the various areas — sometimes into asset bubbles, sometimes into housing, sometimes in raw property or whatever. They help create bubbles that have to pop at some point.

I want market interest rates. We don’t have enough confidence or understanding of how the market works in this country to set interest rates, and thinking we do is how we’ve gotten ourselves into trouble.

nro: What do you think about QE2?

PAUL: It’s more of the same. That is what caused our problem. It was the low interest rates at 1 percent under Greenspan that really helped build the bubble, and then QE1 and the promise that Bernanke will do whatever is necessary and print as much as he wants and he will rescue us. But all of a sudden it doesn’t lower interest rates. At the beginning, QE2 was supposed to lower interest rates, and now the interest rates are going up.

nro: One thing that matters to you and a lot of disciples of Austrian economics is inflation. Some think it’s necessary and good because, with sticky prices, it helps to stimulate growth. Can you explain your problems with steady inflation?

PAUL: It’s the worst thing any government could deliberately do. It’s counterfeit. It means some people will benefit at the expense of others. People who saved money and are living off their savings get cheated. It’s a moral issue: They might make 1 percent on their certificates of deposit, and they can’t live on that. And the government practically gives the money to the banks and then they turn it over and buy Treasury bills and bonds and make 3 or 4 percent. So they make billions of dollars after having just been rescued from their bankruptcy.

It’s wrong to deliberately devalue the currency, because prices go up and if your purchasing power goes down, then somebody is stealing from you. So to me, it’s theft. And they should never be allowed to do that. And the responsibility of government is to guarantee the value of currency. The Founders understood it clearly, they had had runaway inflation of the continental dollars, that’s why they said you cannot admit bills of credit, no paper money — we totally ignored that and it’s one of the major reasons we’re in the mess we’re in.

nro: So inflation transfers wealth?

PAUL: Inflation goes from the middle class to the wealthy, and it is a tax, and the people don’t know about it. It’s invisible. That’s why they get away with it. Eventually the people wake up, and then it’s too late, and you get rampant inflation. Bernanke brags that he can turn off inflation in 15 minutes. He can’t. There’s so much money out there, which is going back into use — commodities are going up. This idea that there is no inflation is absurd. One thing they do is they want everyone to talk about inflation as the CPI. Austrians say that inflation is when you increase the money supply — sometimes some prices go up, sometimes it starts out in land, but eventually it can be everything.


nro: If you don’t trust the Fed, as an unelected “fourth branch of government” . . .

PAUL: Yep, they’re bigger than the Congress now.

nro: . . . but if you don’t trust smart bankers to control the currency, why would you trust Congress?

PAUL: Well, how could it be any worse? At least with Congress, people would know what they were doing. But I don’t want Congress to do it. People who we call Greenbackers are the ones who say Congress should print the money and pass it out and help the people they want to help. But that’s not what I want, that’s not what is in the Constitution. Nobody is supposed to regulate the money and set interest rates. I want the marketplace to set interest rates, and that means the market decides how much gold and silver circulates.

nro: But would you prefer Congress to the Fed?

PAUL: Well, you know, I probably would, just to shake up the system. But that would not be my priority. My first step is to expose the Fed for what they’re doing, because they do it in secret. People say that “Congress will politicize the Fed.” Well, how could they get more political? When they help out their buddies at Goldman Sachs, that’s pretty political.

nro: Enough of the dismal science. A few scattershot questions now. I’ve always wondered, is your son, the senator-elect, named after Ayn Rand?

PAUL: [laughter] No, his full name is Randall. It had nothing to do with Ayn.

nro: You two are living together outside D.C. now, right?

PAUL: He has high-school kids, and one is going to graduate this year. He doesn’t want to take him out of high school in his senior year and does not want to set up housekeeping here [in D.C.]. So he asked if he could stay at my place for six months while he makes a decision. I said, “Okay, as long as I don’t have to cook.” So he’ll stay. I think he’d like to bring his kids here more often than I brought my kids at that age.

nro: Do you consider yourself well-aligned with the Tea Party?

PAUL: Well, the Tea Party is so big, and they do have different views. But most Tea Party people come together for one issue, and that is government’s too big, they spend too much, the debt’s too big. I think when you get down to the fine points of foreign policy, there may be differences about what to cut. I think the Tea Party people are pretty good on the Federal Reserve. So it is big and broad, but I don’t think it’s a monolith. I think there’s some disagreement — but the biggest disagreement is with Washington, that’s what they agree on.

nro: You’ve had some conflicts with the Republican party. Do you feel more comfortable with the incoming Republican class than with the so-called establishment?

PAUL: Absolutely. A lot are not politicians, a lot have run their first races, like Rand did — that was his first race, he didn’t work his way up the system. I think it will be a lot of people like that who will be very independent-minded, and that’s what we need.

nro: Can the Tea Party maintain its energy?

PAUL: I think they’ll stay organized, and if this Congress does what the Republicans did when they held all three branches — if they don’t do a better job — I think they’ll hear from the Tea Parties.

nro: What about from you? Running for president in 2012?


PAUL: Don’t know, too early to tell.

nro: We know what that means. Anyways, another change in direction: How do you square your hard line on immigration away with your libertarian philosophy?

PAUL: Well, I just think that it’s unsustainable without having some border protection, mainly because of the welfare state. The welfare state encourages our people not to work, and so then we need workers. And when immigrant workers come in, there are welfare benefits, education, and Medicare for those who come who are not legal. If there wasn’t that, I’d be pretty generous with illegal immigration.

I’m writing a book for next year, and I’m going to say I support neither amnesty for everyone nor guns and shooting people when they come over. I want immigration to be legal, but I would argue that there should be no federal mandates to provide services for illegal immigrants. Maybe immigrants would go back, then, to their families, on their own. I think it’s virtually impossible to send back 12 million people, but I don’t think we should give them citizenship. So the Left will be unhappy because they want immediate citizenship, and the Right will be unhappy because they want to send them all home. But the other day, we had that DREAM Act vote — a lot of things there I was sympathetic to. But they wanted to give them tremendous welfare benefits. I don’t like that kind of stuff.

nro: You caused controversy recently defending WikiLeaks founder Julian Assange. Do you stand by your comments?

PAUL: I feel stronger about it than I ever have. This can’t be allowed to go without a full debate. If you don’t protect the rights that we have to broadcast and print — as well as for individuals who want to tell the truth about our government — we’re in big trouble. Others say I’m letting people undermine our security, but the truth is, the lies told by our government that have gotten us into wars are the biggest danger. I lived through the ’60s in the military, and Iraq was all based on lies. Just think how many people have died and are wounded and are still being wounded. And the war’s going to go on forever.

nro: Do you extend that defense to Pfc. Bradley Manning?

PAUL: Well, that’s different. The real problem is that with the $80 billion we spend for national intelligence, we can’t even protect what we have. That might even be the biggest scandal of all. But even if he did this with good intentions, he has to recognize that he is practicing civil disobedience. But in my speech, I differentiated between treason — which is deliberately helping the enemy — and a foreign correspondent putting something on the Internet, embarrassing our government, because they say something embarrassing about our lies in Afghanistan.

nro: Will you try to get Republicans on board with cutting defense spending?

PAUL: Yeah, I always do. We hear rumblings of that now. I don’t think that will be achieved until we change our foreign policy. As long as the American people encourage Congress to have a military-industrial complex, we’re going to further bankrupt us. But I believe we cannot deal with the budget deficit without dealing with the excesses of the military.

— Matthew Shaffer is a William F. Buckley Fellow at the National Review Institute.