MSNBC "The Ed Show" - Transcript

Interview

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SCHULTZ: That was the story on Capitol Hill today from Federal Reserve chairman, Ben Bernanke, basically playing defense at his confirmation hearing. The chairman is trying to stonewall the Fed from being audited. Senator Bernie Sanders has pulled a hold on Bernanke"s confirmation.

Also, Congressman Alan Grayson told us on this program that he think that the audit would show secret bailouts to Wall Street. We know they gave Wall Street $700 billion with the TARP money. But Grayson thinks there could be hundreds of billions more dolled out in secret.

Joining me now who has been really going after this for many years, Texas congressman and former presidential candidate, Ron Paul.

You and I are on the same page on this one, so no shouting tonight, Ron.

(LAUGHTER)

REP. RON PAUL ®, TEXAS: That will be boring then, Ed. That"ll be boring.

SCHULTZ: Oh, no, no, no. We"re not boring. We don"t like that. OK, do you agree with Congressman Grayson? And I know he"s worked with you on this. Do you believe that there have been, quote, "secret bailouts"?

PAUL: I think so. But the trouble is, we can"t prove it. But yes, I suspect there is, because they doubled their balance sheet and where did--how did they do that? What did they buy? On their balance sheet, we still see that there"s $800 billion worth of mortgage securities they bought. That"s the derivatives.

And they call them illiquid, that they were worthless. And yet we don"t know whom they bought them from and how much they paid for them. So it literally could be in the trillions of dollars for all we know. But Bernanke said it was unpopular? Well, I think transparency in the Fed right now is getting to be very popular.

At least the congressmen now are getting the message and we have 313 co-sponsors of that. So I think he"s wrong in saying this is not a popular position. It"s unpopular with him. That"s for sure.

SCHULTZ: Congressman Paul, when are you going to ask the White House for support on this? How about directly asking the president of the United States how do you feel about auditing the Fed?

PAUL: Well, I thought you had more friends over there at the White House than I have.

(CROSSTALK)

SCHULTZ: Not recently . But.

PAUL: Maybe I"ll ask Alan to do that. Grayson probably has some friends over there.

SCHULTZ: But doesn"t that have some merit? I mean if you"ve got 313 people on board in the House who want to audit the Fed, it would seem to me that the White House might want to take a stand on this one way or another.

PAUL: Yes, I wish they would but I know where they would come down on it.

SCHULTZ: Where?

PAUL: I would think there"s less than 1 percent chance that he would support this, even if it overwhelmingly passes the Senate and the House, I believe it would be a veto on this because this is big stuff. I mean--and Bernanke, when you get him going, what he really, really doesn"t want us to know is all the agreements he makes with other governments.

He can literally go into like treaties with other governments like promise them money. They get involved in business transactions with companies. They can get involved in other central banks.

SCHULTZ: Well, you"re not.

(CROSSTALK)

SCHULTZ: Congressman, you"re not describing the president--or you"re not describing the United States of America when you say that. You mean to tell me that you think the Fed chair is going out and doing deals and putting us in a box without the Congress weighing in on any of this stuff?

PAUL: Yes, I think we"ve been very derelict in our duty. But I would have argued with many who argued in 1913, you know, they agitated throughout our whole history, I mean, from the time of Jefferson and--back in--

Jefferson and Hamilton argued this.

But yes, I would have argued it was unconstitutional to create it. And then the Congress creates it then they neglect it. But finally we"re getting their attention because people are looking at the right place for the source of the problem that"s at the Fed, they create the bubbles, they create the bursting of the bubbles, they allow that to happen.

They cause the unemployment. They"re responsible for the unemployment. So anybody who cares about poor people and the middle class should be very much concerned about the monetary issue and the Federal Reserve.

SCHULTZ: And I want to give you a chance in a different subject to go on the record tonight, Congressman. Afghanistan. The president"s decision the other night. I know you"re against international intervention. Where do you stand on this?

PAUL: Oh, I think it"s just terrible. You know, we had hearings on this yesterday, and Hillary Clinton was there, and secretary of defense.

SCHULTZ: You"re not impressed?

PAUL: And I asked them, I said are you in support of the Bush doctrine of preventative war? And they really didn"t give me a straight answer. I think they do support Bush"s doctrine on preventative war which I consider one of the most egregious policy changes in our history and I believe that principle is going to be used to expand the war into Pakistan.

They talk about Pakistan right now.

SCHULTZ: Yes.

PAUL: So I think it"s very, very dangerous. I think the principle here is the idea that we have this right--moral right and constitutional right to just assume that some day somebody might be our enemies that we have an obligation to invade them and occupy them.

That spells nothing but trouble for us in the political.

SCHULTZ: Yes.

PAUL: In the international and political sense. But it contributes to this deficit.

SCHULTZ: No doubt.

PAUL: I mean that"s where our money is going, so there"s a lot to be said about the deficit, the Federal Reserve and these unwise wars that we pursue.

SCHULTZ: Got to run, Congressman. Appreciate your time tonight. Thanks so much.

PAUL: Thank you.

SCHULTZ: Ron Paul from Texas here on THE ED SHOW.

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