After years spent as an outsider in his own party, Rep. Ron Paul will finally have a perch from which to advocate his central policy goal: shutting down the Federal Reserve. When Republicans take over the House in January, the 75-year-old Texan will assume chairmanship of the Financial Services Domestic Monetary Policy Subcommittee, which has jurisdiction over the central bank. Paul talked about his plans with National Journal. Edited excerpts follow.
NJ Have you mapped out the subcommittee’s agenda? How much interest are you getting from members?
PAUL It’s a subcommittee that nobody ever wanted in the past, and now that I have it, everybody’s fascinated. Two freshmen called me, and they want to get on the subcommittee. We will have plenty of hearings to go over transparency of the Fed. To me, that is the big issue.
NJ What are some other agenda items?
PAUL I’m looking at a bigger picture—why I don’t think anybody should be doing central economic planning through monetary policy. How do they know what interest rates should be? I want to talk about how the Federal Reserve contributes so much to the detriment of the economy. Unfortunately, in the past the Fed has gotten a free pass. If we had good times, they said the Fed was doing a great job. If they monetized government debt when it was more modest, Congress loved it because they didn’t have to raise taxes. When a recession came, the Fed always got credit because they were going to pump it up, and they got us out of a recession. I want to talk about why monetary policy is a major contributing factor to unemployment.
NJ You are a proponent of returning to the gold standard—a view that is outside the thinking of mainstream economists. Will you explore that issue?
PAUL Absolutely. I think the markets are starting to demand it. When you hear people like [World Bank President Robert] Zoellick talking about using gold in a reform package, you are getting closer and closer. History is on my side.
NJ So your aim is to give a better airing to these unconventional views in the hope that they could become more mainstream?
PAUL That may be one of my major responsibilities. Things change in Washington after attitudes change. I didn’t get all those members to sign off on the “Audit the Fed” bill, but the grassroots did once they became aware of what the Fed was doing and that Congress didn’t know anything about it. So I think education has a major role to play.
I try to depersonalize everything. When they want me to say really bad things about [Fed Chairman Ben] Bernanke—a lot of my supporters would like me to say bad things—but it is usually policy I want to talk about. He comes at it from a Keynesian viewpoint, and I come at it from an Austrian viewpoint. I want to impeach the Federal Reserve, not Bernanke. [The schools of economic thought] are completely different. They deserve to be debated. I would love to have Paul Krugman come before the committee and explain himself, because he has a lot of influence.
NJ Do you think you will get any help from Democrats?
PAUL I’m always looking for allies. People like Dennis Kucinich, who’s been an ally with me on some of our foreign-policy things, is very much in favor of more transparency of the Fed. There are a lot of people from the Left who agree with me.
NJ Has the GOP leadership spoken with you about your subcommittee agenda and whether it is uncomfortable with any of it?
PAUL No. It hasn’t come up. The only person I have talked to is my chairman [Spencer Bachus of Alabama]. He more or less said he’s going to allow me to do pretty much what I want, within reason.
NJ Why are those in the financial sector concerned about you taking the gavel?
PAUL It’s because they are addicted. I have been in medicine for a long time, and I know what it is for people to have withdrawal symptoms who have been addicted to drugs or alcohol. So if you are addicted to big spending, and Big Government, and protective types of regulation such as the lender of last resort that will always come to your rescue—if you turn that off and face bankruptcy? No, they don’t want that. They want to dump the bad assets on the people. That’s what happened before. The big guys got the bailout and the little people lost their houses.
NJ Are you going to run for president in 2012?
PAUL I haven’t decided that yet.
NJ Will your son, Rand, be echoing the same anti-Fed themes once he is sworn in as the new senator from Kentucky?
PAUL There will be obviously a lot of overlap. We haven’t planned any strategies. He will have his personal interests, and his whole campaign was based around the debt. The debt is the culprit. I would imagine he is going to be talking about that and overall spending cuts, which I support too. I don’t think we have any disagreement about monetary policy.
This article appears in the December 18, 2010, edition of National Journal Magazine.