Empire, Blood, and Banking

A transcript of the Lew Rockwell Show episode 356 with Ron Paul.

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ROCKWELL:  Good morning.  This is the Lew Rockwell Show.  And what an honor it is to have as our guest, Dr. Ron Paul.  What do we say about Dr. Paul?  Because I could take up the entire podcast just describing — (laughing) — his qualifications and his achievements and not even begin to go over them.  I’ll just simply say he’s the great leader for liberty and for free markets, Austrian economics, who has influenced millions of people all over the world, young people especially.

So, Ron, it’s great to have you with us.  And I thought we’d get started by talking about your wonderful last column where you discussed the Neo-Cons, the people who seem to want perpetual war, the role of Bill Kristol and similar intellectuals in promoting the warfare state and the empire.

PAUL:  Yeah, Kristol had written this recent article and he was lamenting the fact that the problem with Americans is they get war weary.  Yeah, after 10 years or more –


— and many, many deaths and hundreds of thousands of people suffering and an epidemic of suicides.  Yeah, and people getting sick and tired of it, and he’s crying about it.  But he goes in and tries to expand on this that we didn’t even end World War II right.  You know, we didn’t fight Vietnam long enough; 60,000 lives lost weren’t enough.  So he goes on and on.  But, hopefully, he’ll lose credibility.  Unfortunately, the Neo-Cons have a lot to say about the war propaganda that gets out and converts the people into a pro-war stance.  But maybe he’s over the top this time.  But I’m not holding my breath because, so often, the American people start off being quite opposed to a war.  I mean, just look at the Iraqi War.  You know, 60% to 70% of the people were opposed to it and then the war propagandists, the Neo-Cons came in and changed that.  Even before World War II, most Americans were opposed to us getting involved until things were orchestrated in a certain way that the people more or less had to join in.

But, no, I think the Neo-Con should lose credibility, which means that he doesn’t want us to ever leave Iraq, ever leave Afghanistan.  He wants us to continue to build up in Syria.  And he’s the kind of guy that’s anxious for us to march on to Iran.  And it’s scary.  I wish the people would wake up.

But I’m sort of subtly optimistic that this will have to end, in a sad sort of way, in one sense, in that this country will be bankrupt and will have to quit.  More of less, how the Soviets had to give up their empire.  So maybe some good can come out of a bit of a financial crisis that will come.  And we have to admit that this financial crisis has been perpetuated and accentuated by the fact that we spend all this money on the military and on all these useless wars.

ROCKWELL:  You know, it’s interesting, the Kristols of earlier times, of course, used to complain about war weariness, too.  But it began much earlier, before the Federal Reserve, because people were simply being taxed.  So they got sick and tired of the high taxes for wars as well as all the other reasons that, of course, they should have been against the wars.  So it’s very difficult for governments to maintain these long-term wars.  With the coming of the Fed, they can just print up the money for the defense budget.  There’s not even — I mean, I remember when they were going to war against Iraq or whatever, except for you, nobody was raising the question of costs.  I mean, how much was this thing going to cost in addition to the moral and other issues having to do with war?  Because, you know, they just phoned Greenspan and he turned on the printing presses.

PAUL:  That’s what’s so sinister about, you know, the Federal Reserve accommodating the warmongers is that the payment is delayed.  There’s no doubt it’s a benefit to those who want to perpetuate and promote big government, whether it’s for welfare or the warfare.  A direct tax to make people pay for these wars would bring it to a halt a lot sooner.  But it’s very convenient to put it off.  Then nobody knows exactly who the victims are.  Even the victims don’t realize it, you know, that their cost of living is going up.  And then they’re convinced, oh, it’s those rich people, it’s the oil people; they’re gouging us, everybody is gouging us with high prices.  It’s never the government’s fault, nor is it the fault of the mentality that supports these endless wars and endless spending and the printing of money.  So they’re interconnected.

And you know me well enough to know that, when I first started, I talked a lot more about — you know, economics motivated me, you know, during the ’70s and the Bretton Woods and that sort of thing.  But as years went on, I became more and more convinced of the interrelationship with financing these wars, how it’s related to the financial system, not only because of taxes and every penny you spend on militarism comes out of the peoples’ hide here at home, it hurts the economy.  At the same time, the ability to do this and hide the cost I think is what’s been so detrimental to this country.  But it’s all interconnected.

And that’s why I think the philosophy of liberty and the things that we have talked about brings us all together.  Whether it’s personal liberty on how people should run their lives or allowing other countries to solve their own problems, it all comes together once an individual understands what the concept of personal liberty is all about.

ROCKWELL:  And, Ron, don’t you think — or at least it’s certainly my impression that the young people that you’ve attracted to these ideas don’t like the wars.  I mean, they don’t like the Fed and they don’t like other things, too.  They don’t like the wars.  And maybe they’re realizing as you’re explaining it to them that, in addition to everything else wrong, they’re being ripped off.

PAUL:  I think that is the case.  But, you  know, at times, I get praised for doing such and such with young people and all, but one thing that I hope I’ve contributed to and that is get conservatives and limited-government people, Libertarians and people who like the military and supporters of America in general — have been taught that we should not feel guilty about not being pro war.  And I think this is what the propaganda has achieved.   You know, how many times have they accused me of being un-American and unpatriotic and I don’t support the troops and this sort of thing?  But there’s no reason in the world why we can’t feel good about taking this position.  And the young people seem to be very receptive to that.  Their instincts, like the instincts I think of most people initially, is against the war.  Then they’re told, well, if you’re not for the war, you’re not a good person.  And I think if they hear the truth, then they might feel more comfortable.

Sort of like when I discovered Austrian economics.  You know, when I naturally thought free markets were good, I kept hearing the story, well, no, that’s not good; you have to have a fair society; you have to have a little redistribution and all that.  So I was delighted when I came across Mises and Hayek and Rothbard because they were able to explain this to me, that there’s nothing to feel guilty about if you believe in freedom.  And they say, oh, no, you’re just a selfish person and you just want to — you know, you don’t care about other people, this sort of thing.  But I finally came around to the point where if you do have an instinct to care about other people, you ought to care about freedom because that will help the maximum number of people, and the best chance for us to achieve peace and prosperity.

ROCKWELL:  Ron, do you think that the whole drone warfare business — I guess Obama’s and the Pentagon’s plans to have eventually thousands of drone bases all around the world.  Is this the way that they’re attempting to counter the fact that Americans don’t like all the American causalities?  Unfortunately, they tend to care nothing about the foreign casualties.

PAUL:  Yeah.

ROCKWELL:  But they don’t like the American casualties.  And this is a way to — you know, some guy in a basement in Virginia is sending in the drone in Pakistan, he’s not going to get hurt.

PAUL:  No, I think what they’re trying to have is a neat little system that promotes the empire without getting their hands dirty.  But, you know, it’s not going to work because we’re in a different system.  We’re not fighting World War II.  We’re in a fourth-generational warfare time where wars are fought differently.  And they’re fought differently because it’s not going to be against government against government.  So what could warrant, incite a people to rebel against certain individuals than being hit with a drone by somebody who, in many ways, in their eyes, they don’t even have the guts to look at us in the face and — they do it in secret from thousands of miles away.  And when the individuals are killed, when there’s the collateral killings and families are killed, how many tens of thousands if not millions of people are affected like that?  You know, the torture goes on.  The pictures have been there.  And this just, you know, builds up the enemy.  So the sterile wars with the drones will not solve the problems of the Neo-Cons who want this world occupation.  In many ways, it’s just going to bury the issue in the sense that it’s going to be more terrorism and more attacks in this way.  But the world will certainly be less peopled.

And I also predict that all these individuals who run the drones, they will not be — they will not be able to avoid some of the backlash on them.  Like, we have now a suicide epidemic because of people going over and doing wars, that they realize they were killing kids and doing a lot of other things they shouldn’t be doing.  Well, I think the operators of the drones will suffer in a similar way.  I don’t know if there’s any statistics that bear that out yet, but I think eventually, if they’re a human being and they know, well, I did shoot that missile and it killed 10 extra people, you know, it can’t help but eventually bother these people.  And they bury these thoughts into their mind.  They’re told it’s OK.  They’ve been conditioned that war is wonderful and good.  But deep down inside, there’s a conflict.  And I think that’s why people are struggling and they’re suicidal.

ROCKWELL:  Ron, in support of your position, there was a recent item that the drone command, or whatever it’s called within the Pentagon, was assigning chaplains specifically to counsel the drone killers and, of course, to convince them that everything they were doing was perfectly OK.  So obviously, they are having — as you say, if they have consciences, if they’re human beings, they can’t feel good about this, unless you’re, of course, a serial killer and a monster.

PAUL:  You know, they say about 5% — and I don’t know if this is true.  They say about 5% of the people who go into the military are psychopathic, you know, to begin with because, you know, they just like guns and shooting, and it’s excitement and all this.  Most people go in for different reasons.  But if they withstand — if they are exposed to battle and these kinds of conditions of killing, after a while, some theorize that they all become, in a way, psychopathic or, you know, it’s very difficult to handle their emotions.  But I think it’s much more difficult when you’re trying to adjust to an aggressive war, when we’re the aggressors and not the defenders.  I think it would be a lot easier to adapt to some of the horrors of World War II because of Pearl Harbor and this sort of thing; and they adjusted better.  But I think people are starting to realize we don’t have a noble cause over there.  You know, it’s just not noble to send our young people 6,000 miles away.  And quite frankly, I’m convinced some of these young people who didn’t get very far in school and for economic reasons they resort to going into the military — and they probably don’t even know their geography that well, and I wouldn’t be surprised if some of them end up in some of these countries they’ve probably never heard of or exactly knew what was going on.  And they’re sent over to kill these people.  And then we wonder why there’s a down side to this.

ROCKWELL:  Ron, speaking of down sides, tell us what you think the effects of the whole Cyprus situation is going to be from the standpoint of the banking industry in Europe and, for that matter — and, of course, governments, and governments and banking systems in this country, too?

PAUL:  Well, you know, in a way, it’s hard to take it and say that’s exactly what’s going to happen to us, but something similar to that will happen.  How it evolves, we don’t know.  But in Cyprus, they didn’t do what they did in Iceland.  Iceland allowed a lot of bankruptcies to occur and, evidently, they’re back on their feet again.  So they liquidated debt, which is what should be the goal of the correction.  In Cyprus, you know, there’s a lot of bailouts.  They’re not allowing the real liquidation so it looks like some of the big guys are going to get bailed out.  And the bondholders of the Greek bonds and different things like this, they’ll get the bailout.  But there was still some liquidation of debt and confiscation of wealth.  But my prediction will be, when you’ve worked all that out, it will be unfair.  It’ll be that — just like our bailouts occurred.  There was some liquidation of our debt in ’08 and ’09.  Some people did lose some money.  And it usually was, you know, people that might have had a mortgage and lost their job and they got the bad part of the deal.  And yet, the wealthy were bailed out.

So I think this is going to continue.  I think the pyramid of debt is still huge.  And there’s no stomach for allowing the liquidation of debt to occur.  Politically, it just won’t be acceptable.  It’s always going to be more acceptable to keep the printing presses running.  And as long as the world takes our dollars, we’re going to keep printing them until the trust is lost.  And when that day arrives — nobody knows exactly when.  But I see no foundation to our system.  And each day, like what went on in Iraq, that steadily undermines confidence.  And one day, that’s going to happen worldwide with the dollar, and that’s going to be really bad news for a lot of us.

ROCKWELL:  Well, I thought it was interesting when that European official announced that there would be similar haircuts, as they put it, for big depositors in Italy and Spain.  And then, of course, they’re shocked to find out that people are taking their money out of the banks.  And then he’s backtracking, oh, no, no, no, he didn’t really mean it.  But probably not smart to keep huge amounts of money in a bank account whether you’re an American or a Spaniard or an Italian or anything else.

PAUL:  Yeah, but weren’t there some reports also in Cyprus that a few of the big depositors were tipped off — (laughing) — you know —

ROCKWELL:  Yeah, that’s right.

PAUL:  — a little bit early?

ROCKWELL:  That’s right.

PAUL:  And they got their money out.  That always seems to happen.

But it’s a very, very fragile system.  And anybody who understands Austrian economics understands that permanent prosperity cannot be achieved by inflating a currency and pyramiding debt.  And that once it happens and it quits functioning and producing anything, then you have to clear the market of that.  And you have to get rid of this bad debt so you can start building again.  And that has not been permitted.  I guess the last time that truly has happened on any significant downturn was probably in 1921 here in this country where we allowed the liquidation to occur.  And it wasn’t a prolonged depression.  It’s only been since the Keynesian-type mentality has taken over that has prolonged these depressions and recessions so long.  It’s been going on in Japan.  And they still, right now, believe, well, if we just print more money, you know, it’s going to happen.  But if that were the case, we wouldn’t have to really work for a living.  You know, we could just print dollars and —


— and export dollars.  So right now, that’s our best export.

ROCKWELL:  Well, Ron Paul, thanks so much for coming on the show today and sharing your wisdom.  And great to hear from you.

PAUL:  Great to talk to you, Lew.

ROCKWELL:  Bye-bye.

PAUL:  Bye.

ROCKWELL:  Well, thanks so much for listening to the Lew Rockwell Show today. Take a look at all the podcasts. There have been hundreds of them. There’s a link on the upper right-hand corner of the LRC front page. Thank you.

Podcast date, March 26, 2013

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