11
What sets Ron Paul's economic philosophy apart?
Presidential hopeful Ron Paul has stood out for his throwback economic philosophy.
To view this content, Javascript must be enabled and Adobe Flash Player must be installed.
Jeremy Hobson: Well we're just a little more than a week away from the Iowa caucuses. And one GOP candidate who's been gaining steam in Iowa heading into the home stretch is Texas Congressman Ron Paul. As part of a series of conversations
about the candidates economic ideas, we're going to talk Paul-onomics now with Kevin Hassett. He's director of economic policy studies at the conservative think-tank the American Enterprise Institute. He's with us now from Washington. Good morning.
Kevin Hassett: Good morning.
Hobson: Well first of all, just give us an overview of Ron Paul's economic philosophy.
Hassett: Yeah. Ron Paul's economic philosophy is kind of a throwback philosophy -- he wants to go back to the 19th century of how we ran the country. So he wants to repeal the 16th Amendment of the Constitition; he wants to have free trade; and wants a really, really small government.
Hobson: How do you think that the economy would be different in this country if Ron Paul actually did the things that he wants to do? I can think of, for instance, he wants to get rid of the Federal Reserve, right?
Hassett: Yeah, that's right. And that's one of the things I have the most trouble with. Ron Paul is for going back on the gold standard, and that's a really cockamamie scheme. There's no government left on earth that thinks that way about monetary policy. And I think that going back to the gold standard would make it so that if all of a sudden somebody finds some gold somewhere, then we've got inflation; or you're shipping some gold across the ocean and the ship sinks, then you know, goes the other way. There are a lot of strange things that happen if you're on the gold standard.
Hobson: There are going to be some people who hear this interview and maybe they're Ron Paul supporters, and they will say, 'Oh listen to this Kevin Hassett; he's just an establishment Washington guy at the American Enterprise Institute. He just doesn't want Ron Paul, this outsider, to come in and make real change.'
Hassett: I think that that's really false. The fact is, Ron Paul has some good ideas -- I like the fact that he supports the fair tax. But he also proposes things that are really based on a misreading of modern economics, I think, and sometimes even a misreading of the Constitution. So that's a strong reason to oppose, I think, the really strange set of policies that make up the Ron Paul platform.
Hobson: Kevin Hassett is director of economic policy studies at the American Enterprise Institute. Kevin, thanks.
Hassett: Thanks a lot.
Hobson: And you can find the economic ideas of all the candidates. Check it out.
Pages
I’m all in favor of an outsider coming in and making real change; in fact, that’s what I hoped would happen in ’08. Unfortunately, it didn’t. And so people are flocking to the likes of radical ideologues and libertarians like Ron Paul, Friedrich Hayek, Ayn Rand, Milton Friedman, and Newt Gingrich? The anti-government ideologies of these people are the very source of the ‘08 financial crisis. What does it take, beyond global financial collapse, for people to recognize this? Even Alan Greenspan admitted to the failure of economic neoliberalism. Conservatives missed their chance to be concerned about the national debt—about two wars, three financial bubbles, and ten trillion dollars ago. They were too busy cutting taxes for billionaires and deregulating the financial industries to care. Not to let Democrats off the hook for their part through the decades since Ronald Reagan, but their crimes consisted primarily in caving in to supply-side economists’ lies about trickle-down economics.
Economist Joseph Stiglitz recently noted that, in the future, we may look back and see that “the ‘08 collapse of Lehman Brothers was to market fundamentalism what the fall of the Berlin Wall was to communism.” No, I’m afraid it’s going to take another one yet for people to get the picture, one that in no way can be blamed on “big government.” This half-truth misses the point that less government means more Wall Street and full-on oligarchy, and that is what Ron Paul, who wants to privatize Social Security, is peddling. There is no “liberal Washington establishment.” There is only government in the pocket of big business; complete, apparently, with a fairly large fan base that enjoys getting screwed by big business. The “Washington consensus” is anything but liberal. No, it’s going to take a crisis so severe that any more lying about the causes will be as futile, useless, and laughable as they were back in the eighties in the wake of the Savings and Loan “crisis,” except, this time, to everyone.
Greg, you need to distinguish between the free market purity espoused by Ron Paul and the Austrian/libertarian school (Hayek), and the corporatist garbage pushed by Gingrich, Greenspan, Bernanke, Bush, Clinton, Robert Rubin etc. In order for free markets to function, the ultimate regulator is the ability for a business to fail. The corporatists used the Federal Reserve and various other programs to eliminate the risk of failure and institute moral hazard to line their own pockets. The Austrian school opposes the "trick down economics" nonsense espoused by Reagan's Keyneisans.
It's refreshing to hear such an elevated discussion on the Marketplace Morning Report. Arguments like the gold standard is "a really cockamamie scheme" help me truly understand the issue in an in-depth way. Thank you for this interview.
Sarcasm aside, you ought to have someone on to counter this out-of-touch point of view from Kevin Hassett. I would recommend Larry Reed from the Foundation for Economic Education. It would be nice to hear it explained how the Federal Reserve system is actually the "cockamamie scheme" because the dollar is now worth five cents of what it was worth when the Fed was established (talk about inflation), and we've had a Great Depression and a dozen recessions under the current monetary system.
An unstable, inflationary currency is most damaging to the poorest people in society while it benefits the wealthiest—those who have large mortgages and bankers who make money off a depreciating dollar.
I'm glad to see there are other commenters on this story who are also disappointed in this interview. Please make an effort to improve your contribution to economic reporting.
I enjoy marketplace - one of my favorite shows on NPR. I have seldom if ever felt moved to make a comment such as what follows.
This morning on my drive into work, I was disappointed - nay disgusted - by the interview with Kevin Hassett and Jeremy Hobson. The dismay came from the quality of the interview - the disgust from its predictable tone toward Ron Paul. It was the second (negative) interview regarding Mr. Paul in the last week that I have heard on NPR. What is truly remarkable is the fact that not a single traditional media source that I know of has carried a story with a positive spin on Mr. Paul - and until a couple of weeks ago one was hard pressed to find ANY coverage whatsoever. Is there a complete lack of curiosity for how a candidate who was first ignored and now smeared can still be winning straw polls? How is it that Fox and NPR can agree with CNN, CBS, NY Times, Bloomberg, etc. that Mr. Paul deserves only ignominy but a significant chunk of the population resonates strongly with his message?
I would expect more from NPR, which I have come to think of as one of the last bastions of somewhat independent thought.
Is it not worth mentioning that someone running on the Republican ticket vehemently opposed the war in Iraq, as well foreign military engagements in general? How could this escape mention from a broadcasting service that is traditionally at least sympathetic to the peace movement?
Coming back to the interview itself, you chose to interview an establishment economist (co-author of "Dow 36,000" no less). Of all types of people out there who might feel threatened, a PhD economist is near the top of the list. But isn't ironic that you choose somebody whose profession is at the rotting core of what is wrong with America? A man who predicted Dow 36,000 in 1999, from a profession that thought housing prices could never go down nationwide in 2006, defending a monetary system that has produced perhaps the greatest fiscal imbalance in history complete with unsustainable debt loads that will soon cripple Greece, Italy, Spain, Ireland, Portugal, Japan, the UK, the US, etc. How mainstream economists are still allowed out on the street without being pelted by tomatoes is beyond me (and I have a Master's degree in said subject) as they have mostly become paid lackeys to the American oligarchic corporate and/or political machine (and I've seen that side of them now that I'm a hedge fund manager.)
As continuing evidence of Mr. Hassett's lack of qualification I provide a quote from this morning's interview:
"And I think that going back to the gold standard would make it so that if all of a sudden somebody finds some gold somewhere, then we've got inflation; or you're shipping some gold across the ocean and the ship sinks, then you know, goes the other way. There are a lot of strange things that happen if you're on the gold standard."
Really? Does Mr. Hackett know much of anything about gold? That the majority of it exists as a stock - not a flow - and that mine supply is well known years in advance? Does Mr. Hackett know how the gold standard works, or does he know details of Mr. Paul's opinion of the gold standard? My guess is "no" to all of these questions save the first one (a.k.a. "really?").
What is truly troubling to me is that the people and institutions (such as NPR, my parents, and other fine individuals) that I grew up believing supported the best qualities of open-minded discourse have chosen to first write off and then smear the only politician in more than a decade who presents a credible alternative to status quo thinking. This is particularly troubling as the tendency of this great country is a quickening slide toward fascism.
What's more, Kevin Hassett used to work directly for the Federal Reserve, an organization that Ron Paul has a well-publicized enmity for (and with good reason). As I posted, this would be akin to asking a Hillary Clinton supporter to comment on candidate Obama's economic plan. Biased journalism at its worst.
"He's just an establishment Washington guy at the American Enterprise Institute. He just doesn't want Ron Paul, this outsider, to come in and make real change."
...and you can tell because he says nothing descriptive or factual about Austrian economics or Dr. Paul's specific proposals, only that they are somehow "throwback" (which carries the connotation of "backward") even though the 19th century period in question was an era when laizze faire capitalism built the industrial might upon which the Imperial XXth century US fed.
There are endless fascinating debates to be had about Economics, about who Hassett means when he says "we" run the country, about what Money is and why the original US Mint was only empowered to coin the citizens' gold as legal tender for the money supply they ran quite well sans a Federal Reserve. You could actually discuss these things and be the kind of enlightening show that NPR listeners claim they're getting, or you can be a shill, who'll mention Ron Paul only when the stars have so aligned in his favor that AEI and the Establishment come calling in their favors for airtime to malign an honest candidate with an exciting vision for liberty-regained in our country. That is "What Sets Ron Paul's Philosophy Apart" - it is what the Establishment least wants to spread.
I love Marketplace.org. However, American Enterprise Institute is a total trash-ball right-wing corporatist company of propagandists, and Hassett is a perfect case in point. Just another corrupt corporatist attack on Paul, who wants to check their unproductive, regressive ideology and culture of corruption...the kind AEI's donors rely on for their very existence. I'm not a Paul-hater, and it's little hit-pieces like this that make me lean ever-closer to supporting Paul. If AEI, the so-called "free-market" think-tank is out to get Paul, the he must be doing something right. AEI is a fraud, helping suck the life out of the American middle class for decades now.
I must also add that Ron Paul has a far better understanding and record on economics than AEI's Hassett or the rest of the establishment. While the establishment candidates Romney, McCain, Obama and Clinton were lying to voters in 2007, claiming that the economy was fundamentally sound, Ron Paul was explaining that the false prosperity Fed-created bubble had already burst and we were in for a recession. Ron Paul predicted and explained that we would have an unsustainable housing bubble as far back as 2001 and 2002. Kevin Hassett and his cronies were too busy feeding at the establishment trough to rock the boat on these matters.
I was very disappointed to listen to this hit-piece coming from Marketplace, one of my favorite shows. Kevin Hassett is with the American Enterprise Institute, an organization that has implicitly endorsed Mitt Romney for president. Interviewing him about Ron Paul's economic plan is akin to asking a prominent Hillary Clinton supporter to comment on candidate Obama's plan, while introducing him as an unbiased observer. Marketplace would do well to retract this unfair "journalism" and instead interview someone with credibility, perhaps an Austrian economist (James Grant or Jim Rogers would be good) to explain Ron Paul's plan.
The centerpiece of Ron Paul's plan is not to repeal the 16th amendment or end the Fed as Hassett chooses to focuse on (Hassett worked as an economist for the Fed so his bias is obvious). Rather Ron Paul proposes to cut $1 trillion in federal spending by eliminating counter-productive overseas spending and reducing five departments through consolidation and attrition. Ron Paul acknowledges that his goals to end the income tax, the Fed and return to the gold standard are long term in nature, and thus he has offered long-term transition plans that are both reasonable and achievable.
Pages
