Ron Paul’s Heroic Struggle to End the Fed

(Lew Rockwell)—Everybody knows Ron Paul’s heroic battle against the Fed. The Fed is at the center of all of the plots of the deep state to destroy us. Without its financial empire of fiat money, the deep state would not be able to function. But do you know how the slogan, “End the Fed,” forever associated with Dr. Paul, became popular?  After Dr. Paul spoke to a student group at the University of Michigan, the audience was so charged up that a number of them took out Federal Reserve notes from their wallets and burned them. The demonstration attracted quite a bit of attention at the time. After that the slogan took off. Everybody was saying “End the Fed!”

Dr. Paul gave a succinct summary of the case against the Fed in 2009.

“What unprecedented anti-Fed days these have been! We had our Audit the Fed Congressional hearing, in which the central bank — for the first time in 96 years — was put on the defensive. End the Fed was chosen as a Main Selection of the Conservative Book Club; this book, the first anti-central banking bestseller in American history, debuted at #2 on Amazon.com and #6 on the New York Times and Wall Street Journal bestseller lists.

End The Fed — which the Mises Institute’s Lew Rockwell calls “readable and persuasive beyond belief” — can climb up the NYT and WSJ lists week by week, eventually reaching #1, if you help me. Please, buy a copy. Buy one for a friend or family member. Spread the word. One businessman bought copies for all his 23 employees. Others have given them to students, a favorite use of mine.

Since 1913, the Fed has had it all its own way: booms and busts, dollar depreciation, redistribution to the government and the big banks from the middle and working classes. But just as Andrew Jackson abolished the predecessor of the Fed, we too can knock over this dangerous institution. End The Fed teaches all the fascinating history, and tells us what we can do for the future. It gives the constitutional, economic, moral, and libertarian arguments against what Jackson called “the Monster.”

Ever seen the Fed’s marble palace in Washington, DC, on Constitution Avenue (of all streets!)? That bunch sure knows how to live. I’ve long had a dream of being the auctioneer when the Fed is sold off for private offices, or maybe a Museum of Sound Money! Help me dull its scissors and then break them, so the Fed can’t cut down our dollar’s value. Indeed, I believe that people ought to be ashamed to work at such a place; an institution that has done so much damage to American prosperity and freedom, as well as to the freedom and prosperity of the whole world. For example, I want no more bowing and scraping to the Fed chairman when he goes to Capitol Hill to peddle his nonsense. He is just a bureaucrat, albeit a disastrous one.

Together, you and I can change things. Indeed, we must. Buy End The Fed. Get copies for those you love. Certainly get copies for those who disagree with us. For all our futures, nothing is as important as cutting the Fed down to size. Join me: let’s End the Fed.”

Dr. Paul gave a brilliant account of what is wrong with the Fed’s bailout policy in an article he wrote in 2019.

“Since September 17, the Federal Reserve Bank of New York has pumped billions of dollars into the repurchasing (repo) market, the first such intervention since 2009. The Fed has announced that it will continue to inject as much as 75 billion dollars a day into the repo market until November 4.

The repo market provides a means for banks that are temporarily short of cash to obtain short-term (usually one day) loans from other banks. The Fed’s interventions were a response to a sudden cash shortage that caused interest rates for these short-term loans to climb to 10 percent, far above the Fed’s target rate.

One of the factors blamed for the repo market’s cash shortage is the Federal Reserve’s sale of assets it acquired via the Quantitative Easing programs. Since launching its effort to “unwind” its balance sheet, the Fed had reduced its holdings by over 700 billion dollars. This seems like a large amount, but, given the Fed’s balance sheet was over four trillion dollars, the Fed only reduced its holdings by approximately 18 percent! If such a relatively small reduction in the Fed’s assets contributed to the cash shortage in the repo market, causing a panicked Fed to pump billions into the market, it is unlikely the Fed will be continuing selling assets and “normalizing” its balance sheet.

Another factor contributing to the repo market’s cash shortage was a major sale of US Treasury securities. Sales of government securities leave less capital available for private sector investments, increasing interest rates. This “crowding out” effect provides one more justification for the Federal Reserve to pump more money into the markets.

The crowding out effect is just one way federal debt increases pressure on the Fed to keep interest rates low. Increasing federal debt increases pressure on the Fed to maintain low interest rates to keep the federal government’s interest payments from reaching unsustainable levels. The over one trillion dollars (and rising) federal deficit is the major reason the Federal Reserve is likely to keep interest rates low or even adopt the insane policy of negative interest rates.

The American people are not even allowed to know what banks benefited from the Fed’s intervention in the repo market, or what plans the Fed is making for future bailouts — even though the people will pay for those bailouts either through increased taxes, debt, or the Federal Reserve’s hidden inflation tax when the next crash occurs. Of course, the average people who will lose their savings and their jobs in the next crash will not be bailed out. This is one more reason why it is so important Congress takes the first steps toward changing monetary policy by passing Audit the Fed.

The need for the Fed to shove billions into the repo market to keep that market’s interest rate near the Fed’s target shows the Fed is losing its power to control the price of money. The next crash will likely lead to the end of the fiat money system, along with the entire welfare-warfare state. Those of us who understand the Fed is the cause of, not the solution to, our problems must redouble our efforts to educate our fellow citizens on sound economics and the ideas of liberty. This way, we can create the critical mass necessary to force Congress to cut spending, repeal the legal tender laws to restore a free market in money, and audit, then end, the Fed.”

I firmly believe today what I said about the great Ron Paul last year:

“Many people wish they could have met a great figure in history. What would it be like to talk to Newton, to Tesla, to Shakespeare? Those of us lucky enough to know Dr. Ron Paul don’t have to speculate. We know one of the truly great figures in American history, the best Congressman we have ever had. I have known him for decades, and I’d like to tell you something about him as a person and about his achievements.

I had the rare honor of serving as Ron Paul’s congressional chief of staff, and observed him in many proud moments in those days, and in his presidential campaigns. People today sometimes compare Ron Paul with Bernie Sanders. The comparison of Bernie to Ron goes like this: both launched insurgent, anti-establishment presidential campaigns while in their 70s, shook up their respective party establishments, and attracted large youth followings. But Bernie is no Ron.

Just on the surface: Bernie is a grump and difficult to work with; Ron is a kindhearted gentleman who always showed his appreciation for the people in his office.

More importantly, Ron urged his followers to read and learn. Countless high school and college students began reading dense and difficult treatises in economics and political philosophy because Ron encouraged them to. Ron’s followers, meanwhile, were curious enough to dig beneath the surface. Is the state really a benign institution that can costlessly provide us whatever we might demand? Or might there be moral, economic, and political factors standing in the way of these utopian dreams?

It’s not hard to cultivate a raving band of people demanding other people’s things, as Bernie Sanders does. Such appeals arouse the basest aspects of our nature, and will always attract a crowd. It’s very hard, on the other hand, to build up an army of young people intellectually curious enough to read serious books and consider ideas that go beyond the conventional wisdom they learned in school about government and market. It’s hard to build up a movement of people whose moral sense is developed enough to recognize that barking demands and enforcing them with the state’s gun is the behavior of a thug, not a civilized person. And it’s hard to persuade people of the counter-intuitive idea that society runs better and individuals are more prosperous when no one is “in charge” at all.

Yet Ron accomplished all these things.

As the person who reached more people with the message of liberty than anyone in our time, Ron has also taught us how that message can and must be spread. I want to talk about some of these lessons.

First and foremost, Ron is a critic of the warfare state. The subject of war cannot, and should not, be avoided.

Ron is not a pacifist – an ancient charge against those who oppose constant war. He believes in the right to self-defense, but he does not believe in the initiation of violence, whether by private criminals or the state. The state has recently taken more than a million lives in its imperialist anti-Muslim wars. Ron Paul has opposed them with all his heart and soul. He is a man of peace and the golden rule, in his private life and his policy.

The war in Iraq, which was still a live issue when Ron first ran for the Republican nomination, had been sold to the public on the basis of lies that were transparent and insulting even by the US government’s standards. The devastation – in terms of deaths, maimings, displacement, and sheer destruction – appalled every decent human being.

Yes, the Department of Education is an outrage, but it is nothing next to the horrifying images of what happened to the men, women, and children of Iraq. If he wasn’t going to denounce such a clear moral evil, Ron thought, what was the point of being in public life at all?

Still, this is the issue strategists would have had him avoid. Just talk about the budget, talk about the greatness of America, talk about whatever everyone else was talking about, and you’ll be fine. And, they neglected to add, forgotten.

But had Ron shied away from this issue, there would have been no Ron Paul Revolution. It was his courageous refusal to back down from certain unspeakable truths about the American role in the world that caused Americans, and especially students, to sit up and take notice.

Worried about the budget? You can’t run an empire on the cheap. Concerned about TSA groping, or government eavesdropping, or cameras trained on you? These are the inevitable policies of a hegemon. In case after case, Ron pointed to the connection between an imperial policy abroad and abuses and outrages at home. While still in his thirties, Murray Rothbard wrote privately that he was beginning to view war as “the key to the whole libertarian business.” Here is another way Ron Paul has been faithful to the Rothbardian tradition. Time after time, in interviews and public appearances, Ron has brought the questions posed to him back to the central issues of war and foreign policy.

Inspired by Ron, libertarians began to challenge conservatives by reminding them that war, after all, is the ultimate government program. War has it all: propaganda, censorship, spying, crony contracts, money printing, skyrocketing spending, debt creation, central planning, hubris – everything we associate with the worst interventions into the economy.

But Ron Paul permanently changed the nature of the discussion on war and foreign policy. The word “nonintervention” rarely appeared in foreign-policy discussions before 2007. Opposition to war was associated with anti-capitalist causes. That is no longer the case.

In exposing the fraudulent American foreign policy debate, Ron exposed an overlooked truth about American political life. The debates Americans are allowed to have are ones in which the real decisions have already been made: income tax or consumption tax, fiscal stimulus or monetary stimulus, sanctions or war, later war or war right away. With debates like these, it hardly matters who wins. Ron pulled back the curtain on all of it. Ron kept insisting that there was no real foreign policy debate in America because all we were allowed to do was argue over what kind of intervention the US government should pursue. Whether intervention itself was desirable, or whether the bipartisan assumptions behind US foreign policy were sound – this was not even mentioned, much less debated

Of course, Ron applies his wisdom to the current war between Russia and the Ukraine. In contrast to brain-dead Biden and his gang of neo con warmongers, he urges us to stay out of it. Likewise, he wants us to avoid a confrontation with China. We can have friendly relations with both China and Russia, and neither country threatens us. Why provoke a war that could lead to the nuclear annihilation of the world? As Ron said in a recent article, ““War is a racket, wrote US Maj. General Smedley Butler in 1935. He explained: ‘A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.’

Gen. Butler’s observation describes the US/NATO response to the Ukraine war perfectly.

The propaganda continues to portray the war in Ukraine as that of an unprovoked Goliath out to decimate an innocent David unless we in the US and NATO contribute massive amounts of military equipment to Ukraine to defeat Russia. As is always the case with propaganda, this version of events is manipulated to bring an emotional response to the benefit of special interests.

War is a racket, to be sure. The US has been meddling in Ukraine since the end of the Cold War, going so far as overthrowing the government in 2014 and planting the seeds of the war we are witnessing today. The only way out of a hole is to stop digging. Don’t expect that any time soon. War is too profitable.”

Let’s look at the other key issue in Ron’s congressional career. After he suspended his 2008 campaign for president, he gave an extraordinary speech. No focus groups urged Ron to talk about the Federal Reserve. No politician had made an issue of the Fed in an election in its 100-year history. Stick to the script, the professionals would have said: lower taxes and lower spending, the monotonous refrain uttered by every Republican politician, who typically has no interest in carrying through with either one anyway.#5 The Fed cannot be ignored.

Here again, had Ron adopted conventional political advice, he would have forfeited these historic moments and the Ron Paul phenomenon would have been greatly diminished, if not compromised altogether.Yet Ron pointed to the Fed as the source of the boom-bust cycle that has harmed so many Americans. His dogged insistence on this point got a great many Americans curious: what, after all, was the Fed, and what was it up to? An unlikely issue, to be sure, and yet it was his willingness to talk about it that in my view helps to account for much of his fundraising success. There was a small but untapped portion of the public that responded with enthusiasm to Ron’s very mention of the Fed, and they wanted more.

Only a few months after Ron officially suspended his 2008 campaign, the financial crisis struck. Just as Ron had said, there was something indeed wrong with the economy.

Because he hadn’t hesitated to say what he believed, even if it meant dealing with an issue no political operative would have encouraged him to discuss, Ron was a prophet. That point alone opened countless more people to Ron’s ideas: here was the only guy in Washington who warned us of what was to come. (And incidentally, has there been a time in American history in which more people were reading – and writing! – anti-Fed books?)

People could see, too, that Ron hadn’t just gotten lucky in 2007 and 2008. In 2001, Ron said on the House floor that the Fed-fueled bubble in tech stocks, which had just burst, was being replaced by a Fed-fueled real-estate bubble, which would burst just as surely.

Of course, it’s not enough just to get rid of the Fed, essential as that is. We need sound money, and for Ron, following Mises and Rothbard, this means the gold standard. Once, when our Ron was invited on the other Ron’s Air Force One for a flight to Houston, Ron Paul commented on Reagan’s watch, which was made from a $20 gold piece. “I wish we still had that monetary system,” said Ron Paul. “You know, no nation that abandoned the gold standard has remained great,” said Reagan. Don Regan told the president to drop the subject.

In 1982, Ron Paul served on the U.S. Gold Commission to evaluate the role of gold in the monetary system. In fact, the Commission was his idea. It was carrying forth a promise made in the Republican platform.

Ron couldn’t pick the members, so from the beginning, the deck was stacked. The majority was dominated by monetarists, who saw gold as too scarce and paper as just fine. Ron Paul’s team was ready, however, with this marvelous minority report.

Rarely has a dissent on a government commission done so much good!

The result was The Case for Gold, and it was the greatest result of the commission. It covers the history of gold in the United States, explains that its breakdown was caused by governments, and explains the merit of having sound money: prices reflect market realities, government stays in check, and the people retain their freedom.

The scholarship and rigor impressed even the critics of the minority. Ron and Lewis Lehrman worked with a team of economists that included Murray Rothbard, who was the main author, so it is hardly surprising that such a book would result.

I am convinced that historians, whether or not they agree with him, will continue to marvel at Ron Paul for many, many years to come. Libertarians a century from now will be in disbelief at the very notion that such a man actually served in the US Congress of our time.

One of the most thrilling memories of the 2012 campaign was the sight of those huge crowds who came out to see Ron. His competitors, meanwhile, couldn’t fill half a Starbucks. When I worked as Ron’s chief of staff in the late 1970s and early 1980s, I could only dream of such a day.

Now what was it that attracted all these people to Ron Paul? He didn’t offer his followers a spot on the federal gravy train. He didn’t pass some phony bill. In fact, he didn’t do any of the things we associate with politicians. What his supporters love about him has nothing to do with politics at all.

Ron is the anti-politician. He tells unfashionable truths, educates rather than flatters the public, and stands up for principle even when the whole world is arrayed against him.

Of course, Ron Paul deserves the Nobel Peace Prize. In a just world, he would also win the Medal of Freedom, and all the honors for which a man in his position is eligible.

But history is littered with forgotten politicians who earned piles of awards handed out by other politicians. What matters to Ron more than all the honors and ceremonies in the world is all of you, and your commitment to the immortal ideas he has championed all his life.

It’s Ron’s truth-telling and his urge to educate the public that should inspire us as we carry on into the future.

Little did he know that those thankless years of pointing out the State’s lies and refusing to be absorbed into the Blob would in fact make him a hero one day. To see Ron speaking to many thousands of cheering kids, when all the while respectable opinion had been warning them to stay far away from this dangerous man, is more gratifying and encouraging than I can say. I was especially thrilled when a tempestuous Ron, responding to the Establishment’s description of his campaign as “dangerous,” said, you’re darn right — I am dangerous, to them.

Even the mainstream media has to acknowledge the existence of a whole new category of thinker: one that is antiwar, anti-Fed, anti-police state, and pro-market. The libertarian view is even on the map of those who despise it. That, too, is Ron’s doing.

Young people are reading major treatises in economics and philosophy because Ron Paul recommended them. Who else in public life can come close to saying that?

No politician is going to trick the public into embracing liberty, even if liberty were his true goal and not just a word he uses in fundraising letters. For liberty to advance, a critical mass of the public has to understand and support it. That doesn’t have to mean a majority, or even anywhere near it. But some baseline of support has to exist.

That is why Ron Paul’s work is so important and so lasting.

Let’s do everything we can to help our greatest living American, Dr. Ron Paul, End the Fed Ron Paul for President!

About the Author

Llewellyn H. Rockwell, Jr. [send him mail], former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com. He is the author of Against the State and Against the Left. Follow him on Facebook and Twitter.