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Ron Paul's Freedom Report
A publication of the Foundation for Rational Economics and Education
VOLUME 3, NO. 4 May / June 1999
Editors note: this special double issue is the first to feature Rep. Paul's official statements
from selected legislative days. This representative selection is offered
so the reader might see the principled arguments that are consistently brought
directly to the Floor of the House, or into committee hearings, as part of
the educational process by which each Member can inform himself before
making a decision on legislation. With this understanding, the reader may
better evaluate the legislative outcome on important issues.
WEDNESDAY, MAY 5, 1999
[Dr. Paul addresses the House]
We Must Not Fund This Senseless Bombing
Mr. Speaker, how many innocent civilians must die before we stop bombing Serbia?
We rightfully cherish the lives of our three servicemen and rejoice in their return. But how many Serbs will never rejoice because of all the death and destruction we have rained down upon them as we casually dismiss as "necessary mistakes of war" a war that is not real to us, yet is only too real to those who are needlessly killed.
Serb victims are people, too, who love their families and hate the war, yet become the victims of this ill-conceived policy of NATO aggression. It is a strange argument, indeed, that the capture of our three soldiers was illegal and yet our bombing of civilians is not.
Violence, when not in one's own self-defense, can never be justified, no matter how noble the explanation. It only makes things worse.
The goal of peace and harmony can never be achieved by bombs and intimidation. That goal can only be achieved by honest friendship and trade when permissible, and neutrality when armed conflict prevents it.
We must not fund this senseless bombing.
[Wednesday, May 5 continued ...]
Opposing National Teacher Certification or National Teacher Testing
Mr. Speaker, I rise to introduce legislation to forbid the use of federal funds to develop or implement a national system of teacher certification or a national teacher test.
My bill [H.R. 1706] also forbids the Department of Education from denying funds to any state or local educational agency because that state or local educational agency has refused to adopt a federally approved method of teacher certification or testing. This legislation in no way interferes with a state's ability to use federal funds to support its chosen method of teacher certification or testing.
Having failed to implement a national curriculum through the front door with national student testing, ... the administration is now trying to implement a national curriculum through the back door with national teacher testing and certification.
National teacher certification will allow the federal government to determine what would-be teachers need to know in order to practice their chosen profession. Teacher education will revolve around preparing teachers to pass the national test or to receive a national certificate. New teachers will then base their lesson plans on what they needed to know in order to receive their Education Department-approved teaching certificate. Therefore, I call on those of my colleagues who oppose a national curriculum to join me in opposing national teacher testing and certification with the same vigor with which you opposed national student testing.
Many educators are already voicing opposition to national teacher certification and testing. The Coalition of Independent Education Associations (CIEA), which represents the majority of the over 300,000 teachers who are members of independent educators associations, has passed a resolution opposing the nationalization of teacher certification and testing; I have attached a copy of this resolution for insertion into the Congressional Record.
As more and more teachers realize the impact of this proposal, I expect opposition from the education community to grow. Teachers want to be treated as professionals, not as minions of the federal government.
Legislation has already been introduced in the Texas State Legislature prohibiting the use of any national certification or national examination to determine if someone is qualified to teach in Texas. While I applaud this legislation, I wonder if Texas would change its policies if the Department of Education threatened to deny Texas federal funds if Texas failed to adopt the Department's chosen method of teacher certification and testing. It is up to Congress to see that the Department of Education does not bully the states into adopting the method of teacher certification and testing favored by DC-based bureaucrats.
...Training and certification of classroom teachers is the job of state governments, local school districts, educators, and parents; this vital function should not be usurped by federal bureaucrats and/or politicians.
The licensure of teachers should remain the responsibility of each state's Board of Education and any attempt to authorize the federal government to govern this process should be opposed. Secretary of Education Richard Riley's proposal (February 16, 1999) to empower a teacher panel to grant licenses for teaching would remove the separate states' authority to protect the welfare of the general public.
Teaching is a public enterprise and not a private profession. Such high stakes licensure decisions must be controlled by a body that is responsible to the public and has accountability for the quality of the decision.
The current education reform movement has compelled state boards of education to revamp and improve teacher licensure programs. This right should be left to the states to best determine how they license state teachers.
Congress should oppose any movement toward federalizing educator licensure, teacher appraisal, and employment contracts.
[H.R. 1706 was sent to the Committee on Education and the Workforce where its language prohibiting national teacher certification was incorporated into H.R. 1995, the Teacher Empowerment Act, which passed out of Committee June 30 on its way to the Floor.]
[Wednesday, May 5 continued ...]
[The gentleman from Texas is recognized for 5 minutes.]
Kosovo War Is Illegal
Madam Speaker, it is time to stop the bombing. NATO's war against Serbia [has] left the Congress and the American people in a quandary, and no wonder. The official excuse for NATO's bombing war is that Milosevic would not sign a treaty drawn up by NATO, which would have taken Kosovo away from the Serbs after the KLA demanded independence from Serbia.
This war is immoral because Serbia did not commit aggression against us. We were not attacked, and there has been no threat to our national security.
This war is illegal. It is undeclared. There has been no congressional authorization, and no money has been appropriated for it. The war is pursued by the U.S. under NATO's terms, yet it is illegal even according to NATO's treaty, as well as the U.N. charter. The internationalists do not even follow their own laws and do not care about the U.S. Constitution.
The humanitarian excuse for the war is suspect. Economic interests are involved, as they so often are in most armed conflicts. NATO's vaguely stated goals have not been achieved. For the most part, their opposite has. Let me give my colleagues a few examples:
Number one. Milosevic is now more powerful than ever; the Serb's more unified.
Number two. Russia is now alienated from the West. Their hold on a nuclear arsenal is ignored. Along with Russia's economic desperation and political instability, NATO is pushing Russia into a new alliance against the West.
Number three. Innocent Serbs and Albanian citizens are routinely being killed by our bombs.
Number four. Civilian targets are deliberately hit, including water, power and sewer plants, fuel storage and TV stations.
Number five. An economic embargo is now being instituted to starve children and prevent medications from reaching the sick, just as we have been doing for a decade against Iraq.
Number six. This war institutionalizes foreign control over our troops. Tony Blair now tells Bill Clinton how to fight a NATO war, while the U.S. taxpayers pay for it.
Number seven. Greater instability in the region has resulted.
Number eight. We are once again supporting Osama bin Laden and his friends in the KLA.
Number nine. We have bombed Bulgaria. By mistake, of course. Sorry.
Number ten. Our weapons are being depleted and our troops spread too thin, resulting in further undermining of our national defense.
Number eleven. Billions of dollars are thrown down a rat hole, and Congress is about to vote for more.
Number twelve. The massive refugee problem, which is essentially a result of NATO's bombing, continues.
Until now, general defense funds have been spent to wage this war without permission. The President wants to catch up and is asking for $6 billion, but Congress, in its infinite wisdom, wants to give him $13 billion for a war Congress rejects. Once we directly fund the war, we will be partners in this misadventure. The votes last week were symbolic. They had no effect of law, but appropriations do.
Saying the new appropriations will be used to beef up a neglected defense does not make it so. Defense funds are fungible. The President has proven this by waging war for a month without any authorization or appropriation. Congress will no more control the next $13 billion than the money the President has already spent on the war.
Appropriating funds to fight a war, even without a declaration, provides a much more powerful legal and political endorsement of the war… . Declaring war and funding war are two powerful tools of the Congress to restrain a president from waging an unwise and illegal war.
Only chaos can come from ignoring the strict prohibition by the Constitution against a president unilaterally waging war. If a president ignores the absence of a declaration, ... the only option left to Congress is the power of the purse, which is clearly the responsibility of the Congress.
We should not fund this illegal and immoral NATO war.
THURSDAY, MAY 6, 1999
During Debate On Kosovo and Southeast Asia
Emergency Supplemental Appropriations Act
Mr. Chairman, I rise in support of the Istook Amendment [blocking deployment of ground troops]. ... [T]his would send a strong message that we do not endorse this war. It was said that this is the same vote that we had last week, but last week's vote is sitting on the table, and it is going to sit there. This one may well go someplace and have an effect.
I think ... we have an interesting constitutional question here, because I agree with the chairman of the committee and the gentleman from Wisconsin (Mr. Obey) that it is not the prerogative of the Congress to micromanage a war. That is correct.
It is the job of the Congress to declare the war. But here we have a Congress involved in diplomacy and micromanaging a war that has not been declared. That is the issue. The issue is not the micromanaging.
I can support this amendment because the war has not been declared. ...[H]ow do we permit the President to wage a war without us declaring the war? Once we declare the war, it is true, we should not be talking about whether or not we use airplanes or foot soldiers or whatever. We do not micromanage. We do not get involved in diplomacy maneuvers.
But today we have things turned upside down. We have the President declaring war and we say nothing, and the Congress micromanaging the war that should not exist. We need to consider that. ...[W]e can straighten this mess out by rejecting these funds.
It is suggested that this amendment would go a long way to doing it, but I'm not all that optimistic. For us to [now] say to the President "thou shalt not use these funds for the ground war," when he has not had the authority to wage his air war ... why would he listen to us now?
[The President] has set the standard, but not he alone. All our presidents from World War II have set the standard that they will do what they darn well please.
This is why I have been encouraged in the last couple of weeks that this debate has been going on, because it is an important debate. I have finally seen this Congress at least address the subject of whether or not they should take back the prerogatives of war, and not allow it to remain in the hands of the President.
I have come to the House Floor on numerous occasions since February, taking the position that we should not be involved. [W]e have ... maybe three dozen Members in this Congress who signed on a bill in February, ... before we even saw the bombs dropping in Yugoslavia, that would have prevented this whole mess if we would have stood up and assumed our responsibilities.
It is said that we must move in now to help the refugees. Have we looked at the statistics? How many refugees did we have before the bombing started?
Others say, well, we must move in because Milosevic is so strong. Prior to the bombing, Milosevic was weak.
Talk about unintended consequences. They are so numerous. What about the unintended consequence of supporting the KLA who are supported by Osama Bin Laden? How absurd can it get?
Osama Bin Laden was our good friend because he was a freedom fighter in Afghanistan. We gave him our weapons and supported him. Then we found out he was not quite so friendly, so we captured a few of his men and he retaliated by bombing our embassies. We retaliated by bombing civilian chemical plants, as well as innocent people in Afghanistan that had nothing to do with it.
So where are we now? We are back to ... deliberating over whether we should give weapons to the KLA. The whole thing is absurd.
There is only one thing that we should do, and that is stop this funding and stop the war. My colleagues say, oh, no, we are already too far in that we cannot. It is not supporting the troops. Well, who wants to get down here and challenge me and say that I do not support our troops? I support our troops. I served in the military for 5 years. That is not a worthwhile challenge. We all support our troops.
They say, well, no, they are in a quagmire, and we have to help them and this is the only way we can do it. So the President comes and asks us for $6 billion and then, in Congress' infinite wisdom, we give him $13 billion. And yet, we do not declare war.
This appropriation should be defeated.
[Thursday, May 6 continued...]
During debate on Providing for Consideration of
H.R. 1664, Kosovo and Southwest Asia
Emergency Supplemental Appropriations Act
...[T]here is a fallacy, that floats around this House that says if we increase the funding for the military, we will have greater defense. That reminds me of the accusation from the Right that always challenges the Left saying, if there is a social problem, all you ever want to do is throw more money at it. The worse the problem gets, the more money the Left wants to spend on the social problem.
It seems like the worse our defense gets, the more we get into quagmires around the world, and the more we accept the policy of policing the world, all we seem to do is come back and say, well, if we just put more money in it, everything would be okay.
But if we are in a quagmire, if we are following a policy that is unwise, the money might just make conditions much worse. [T]his is why we must defeat the spending on this program. [T]he problems with what is happening in Bosnia and Kosovo and Iraq will be compounded as long as the administration has the money to fund the war.
Yes, I am for a strong national defense, but if the policy is wrong, it will undermine all the spending. The money will actually be wasted. Funding encourages a policy that is in error. Funding is an endorsement of the war. We have not declared this war. If we fund it, we essentially become partners in this ill-advised war.
[H.R. 1664 passed by a vote of 311 to 105, and was sent to the Senate]
THURSDAY, MAY 13, 1999
[The gentleman from Texas is recognized for 5 minutes]
No Billions in Appropriations Can Make Our Present Foreign Policy Effective
Mr. Speaker, I have come forward in the past to suggest that the history of this century has shown us that the foreign policy of so-called "pragmatic interventionists" has created a disastrous situation.
Specifically, I have pointed to the unintended consequences of our government's interventions. Namely, ... how World War I helped create the environment for the holocaust and how it thus helped create World War II and thermo-nuclear war. I've mentioned how the Second World War result-ed in the enslavement of much of Europe behind an iron curtain, spreading international communism, and setting off the cold war and our own disastrous foray into Vietnam. Yes, all of these wars and tragedies, wars hot and cold, were in part caused by the so-called "war to end all wars."
Today I do not wish to investigate yet again the details of this history but rather to examine, at a deeper level, why this sort of policy is doomed to fail.
The base reason is that pragmatism is illogical and interventionism does not work. The notion that we can have successes without regard to the ends to be sought is absurd. It should be obvious to practical people that you cannot have "progress" (for example) without progressing toward some end. Equally as apparent ought to be the fact that human effectiveness cannot occur without considering the ends of human beings. Peace, freedom, and virtue are ends toward which we ought to progress, but all reference to ends is rejected by the so-called pragmatists.
Because of this lack of clarity of purpose, we come to accept an equally unclear contortion of our language. Our military is "too thin," it has been "hollowed out" and is "unprepared." But for what are we unprepared? What policy is our army "too hollow" to carry out?
If we remain unprepared to conduct total warfare across the globe, we should be thankful of it!
If we are unprepared to police the world or to project power into every civil war, or "to win two different regional conflicts," this is good.
We are distracted by these dilemmas, which result from unclear thought and unclear language. We convince ourselves that we need to be effective without having a goal in mind. Certainly we have no just end in mind because our pragmatic interventionists deny that ends exist.
"Preparedness" is a word that has been thrown around a lot recently, but it begs the question "prepared for what?" No nation attacked ours, no nation has threatened ours. No sane leader would do so as it would be the death warrant of his own nation, his own people, and likely his own self. We are prepared to repel an attack and meet force with force, but not necessarily to protect our nation and the populace. We are still vulnerable to a missile attack and have done little to protect against such a possibility.
Thus our contortions and distortions, that have led to dilemmas in our thoughts and dilemmas in our policy, have also led to real paradoxes. Because our policy of globaloney is so bad, so unprincipled, and so bound up with the notions of interventionism, we now face this strange truth: we ought to spend less on our military but we should spend more on defense.
Our troops are underpaid, undertrained, and poorly outfitted for the tasks we have given them.
We are vulnerable to missile attack, and how do we spend our constituents' money? What priorities have we set in this body? We vote to purchase a few more bombs to drop over Serbia or Iraq.
Our policy is flawed. Our nation is at risk. Our defenses are weakened by those people who say they are "hawks" and those who claim they "support the troops."
…Our Constitution grants us the obligation to defend this nation, and the right to defend only this nation. I should hope that we will never be prepared to police the world. We should not be militarily prepared nor philosophically prepared for such a policy.
We need to refocus our military force policy, and the way to do that is clear. It is to return to the constitutionally authorized role of defending our country.
Again, this is not simply a question of policy, and not merely a political question. No, Mr. Speaker, the source of our quandary is in the minds and hearts of human beings. Bad philosophy will always lead to bad policy precisely because ideas do have consequences.
Here the bad idea to be found at the source of our malady is absurd pragmatism, a desire to be "effective" without having any idea what the end is that we are trying to affect. It becomes evident in our policy and in our language.
"Now we are in it, we must win it." But we know not what "win" means, other than "be effective." But we are "unprepared," but unprepared for what? Unprepared to be effective! But what is it, we are ineffective at achieving? "Well, winning," is the reply.
Without ends our policies become tautological. With wrong policy, our execution becomes disastrous.
We must reject this absurd pragmatism and reestablish a military policy based on the defense of our nation. Only then will we be able to take the steps necessary for effectiveness, and preparedness.
No billions in appropriations can make our present policy effective.
TUESDAY, MAY 18, 1999
During debate on Waving Points of Order Against Conference Report on H.R. 1141, 1999 Emergency Supplemental Appropriations Act
[H.R. 1141, an earlier emergency supplemental appropriations bill, was passed by the
House on March 24 and later passed by the Senate with changes.]
Mr. Speaker, ... the President came to us and asked us to fund the NATO war [with] $7.9 billion, but we in the conservative Congress have decided that not only would we give it to him, we would bump that up to $15 billion. [That] does not make a whole lot of sense, especially if Congress has spoken out on what they think of the war. And Congress has.
... [T]he President has spent a lot of money. They are hoping to get a lot of this money back from the European nations, but all that makes us are professional mercenaries fighting wars for other people, which I do not agree with.
We are giving more money to the President than he asked for in a war...that we are not even determined to fight. So in order to get enough votes to pass the bill, of course we put a little bit of extras on there to satisfy some special interests in order to get some more votes.
But the real principle here today that we are voting on is whether or not we are going to fund an illegal, unconstitutional war. It does not follow the rules of our Constitution. It does not follow the rules of the United Nations Treaty. It does not follow the NATO Treaty. And here we are just permitting it, endorsing it by funding it further. This does not make any sense.
We should not vote for this supplemental funding.
[The Conference Report on H.R. 1141 was accepted by a vote of 269-158]
[Tuesday, May 18 continued ...]
Introduction of H.R. 1789 [The Market Process Restoration Act of 1999]
Mr. Speaker, I rise today to enlist support for a bill I have introduced to repeal statutes which have now resulted in more than 100 years of government intervention in the marketplace.
In 1890, at the behest of Senator Sherman, the Sherman Antitrust Act was passed, allowing the federal government to intervene in the process of competition, inter alia, whenever a firm captured market share by offering a better product at a lower price. The Market Process Restoration Act of 1999, H.R. 1789, will preclude such intervention.
Antitrust statutes governmentally facilitate interference in the voluntary market transactions of individuals. Evaluation of the antitrust laws has not proceeded from an analysis of their nature or their necessary consequences, but from an impressionistic reaction to their announced gain.
Alan Greenspan, now chairman of the Federal Reserve, described the "world of antitrust" as "reminiscent of Alice's Wonderland: Everything seemingly is, yet apparently isn't, simultaneously." Antitrust is, according to Greenspan:
"...a world in which competition is lauded as the basic axiom and guiding principle, yet, `too much' competition is condemned as `cutthroat.' A world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as 'enlightened' when initiated by government. A world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict - after the fact."
And, of course, obscure, incoherent, and vague legislation can make legality unattainable by anyone, or at least unattainable without an unauthorized revision which itself impairs legality.
The Sherman Act was a tool used to regulate some of the most competitive industries in America, which were rapidly expanding their output and reducing their prices, much to the dismay of their less efficient (but politically influential) competitors. The Sherman Act, moreover, was used as a political fig leaf to shield the real cause of monopoly in the late 1880s - protectionism.The chief sponsor of the 1890 tariff bill, passed just three months after the Sherman Act, was none other than ... Senator Sherman himself.
One function of the Sherman Act was to divert public attention from the certain source of monopoly - Government's grant of exclusive privilege. But, as George Reisman, Professor of Economics at Pepperdine University's Graziadio School of Business and Management in Los Angeles, explains:
"... everyone, it seems, took for granted the prevailing belief that the essential feature of monopoly is that a given product or service is provided by just one supplier. On this view of things, Microsoft, like Alcoa and Standard Oil before it, belongs in the same category as the old British East India Company or such more recent instances of companies with exclusive government franchises as the local gas or electric company or the U.S. Postal Service with respect to the delivery of first-class mail. What all of these cases have in common, and which is considered essential to the existence of monopoly, according to the prevailing view, is that they all represent instances in which there is only one seller. By the same token, what is not considered essential, according to the prevailing view of monopoly, is whether the sellers' position depends on the initiation of physical force or, to the contrary, is achieved as the result of freedom of competition and the choice of the market."
Microsoft, Alcoa, and Standard Oil represent cases of a sole supplier, or at least come close to such a case. However, totally unlike the cases of exclusive government franchises, their position in the market is not (or was not) the result of the initiation of physical force but rather the result of their successful free competition. That is, they became sole suppliers by virtue of being able to produce products profitably at prices too low for other suppliers to remain in or enter the market, or to produce products whose performance and quality others simply could not match.
Even proponents of antitrust prosecution acknowledge this. In the Standard Oil case, the U.S. Supreme Court declared in its 1911 decision breaking up the company: "Much has been said in favor of the objects of the Standard Oil Trust, and what it has accomplished. It may be true that it has improved the quality and cheapened the costs of petroleum and its products to the consumer."
It is the dynamic model of competition under which only free entry is required that insures maximization of consumer welfare within the nature-given condition of scarcity, and reconciles the ideal of pure liberty with that of economic efficiency. The free market in the world of production may be termed "free competition" or "free entry," meaning that in a free society anyone is free to compete and produce in any field he chooses. "Free competition" is the application of liberty to the sphere of production: the freedom to buy, sell, and transform one's property without violent interference by an external power.
As argued by Alan Greenspan, "the ultimate regulator of competition in a free economy is the capital market. So long as capital is free to flow, it will tend to seek those areas which offer the maximum rate of return."
The purpose of my bill is to restore the inherent benefits of the market economy by repealing the Federal body of statutory law which currently prevents efficiency-maximizing voluntary exchange.
[H.R. 1789 was sent to the Judiciary Committee where it remains.]
THURSDAY, MAY 20, 1999
Architecture of International Finance
Selections from the proceedings (edited, emphasis added) before the Committee on Banking and Financial Services involving Rep. Paul questioning chairman of the Federal Reserve Bank, Alan Greenspan, with final remarks by Treasury Secretary Robert Rubin.
Mr. PAUL. I have a couple of questions about real money - not the kind that central bankers can create out of thin air - that I will address to Mr. Greenspan.
The subject of the trade deficit came up, and we certainly are running a huge current account deficit. You have expressed concern about this.
You have also acknowledged in the past and in your writings, that under an international gold standard, we don't get these disequilibriums - they are self-adjusting - that was one of the trademarks of the gold standard. I do think though, that, even though we express mild concern about these huge deficits, we cannot carelessly dismiss them by saying so far so good, because in monetary history we know that inevitably, a country that runs huge deficits eventually has to pay. They pay by that country's currency going down in value, by interest rates rising, and through price inflation hitting the domestic economy.
I think that if we don't face up to this strong possibility, we are putting our head in the sand.
But let me address my questions on gold to what the central bankers as well as the IMF are doing with gold. The IMF has announced that they are planning to sell gold. They seem to do this in a way that affects the market. The gold price usually goes down.
Now, the purpose of the IMF selling gold is, so they say, to help the Third World nations' debt problems. Yet, the money the IMF will be getting from these gold sales really isn't going directly to help these countries, because it is being put into an interest-bearing account, and I would think the interest will be a very small amount of help.
So, it seems the announcement might have been the most important event.
Central bankers around the world have systematically announced loans or sales [in advance] for the last six years. If they sell gold, they usually make the announcement and then, several months later, sell the gold for a lot less than the market was when they announced their decision to sell.
We saw the best example of this just recently with the British making an announcement - yes, indeed, they will sell 400 tons of gold - and the gold price promptly dropped.
Compare this to individuals who are considered to be rather astute in the marketplace, like Warren Buffet. He buys a large amount of silver at $4 an ounce rather quietly, the market discovers this purchase in his next report, and silver shoots up - and he then quietly sells his silver. So we see central bankers, who are usually considered pretty smart people, doing exactly the opposite to what the marketplace does, and we wonder why this happens.
I have a couple of specific questions.
One: Why will central bankers loan gold at one percent? That seems like a pretty good deal for whoever is receiving it.
Two: Why do they announce their decision to sell gold and then sell it after the price drops? There may be some who benefit from this, for instance, those individuals who have been borrowing gold from central bankers over the past six years, who would be in big trouble if the price of gold were to go in the other direction. These borrowers would be hit with a short squeeze, and there would be major trouble.
Could there be a relationship behind these announcements that drive down the price for the benefit of those who would really be in deep trouble if the price of gold were to turn around?
Mr. GREENSPAN. Congressman, it is fairly evident that central bankers are acutely aware of the fact that if they announce they are going to sell gold, the price will go down, and then if they sell it, they will be getting the lower price. And it is true no self-respecting private trader would ever think of doing such a thing.
The reason they do it; they believe it is appropriate that they not take advantage of the market, in the sense that to the extent that they are a public institution - it is my suspicion, although I have never discussed it with them directly - that it would be inappropriate for a public institution to take advantage of private market participants and effectively sell to the market, and the private people who are buying at those prices would be the losers.
I can assure you it is not because they are dumb. They know full well what they are doing.
On the issue of trying to react to some of the holdings of gold on loan, I know of no instance in which the motive of selling or not selling gold in any way was related to that phenomenon.
Mr. PAUL. One quick follow-up. Gold essentially has been demonetized, the process is proceeding, and even the Swiss are now talking about selling half of their gold. If this is the case, would you advise that we seriously think about getting rid of our gold, getting rid of it at the IMF, and out of our Treasury? Why hold it if we have demonetized it? Milton Friedman would agree with this, and he is pretty good at monetary policy.
Mr. GREENSPAN. I agree with virtually everything that Milton Friedman usually says. This is one of the few times I don't.
Mr. PAUL. Why do we need gold?
Mr. GREENSPAN. This is a very interesting issue. This issue was debated, incidentally, in the Untied States in 1976, and the conclusion was that we should hold our gold, and the reason is that gold still represents the ultimate form of payment in the world. It is interesting that Germany in 1944 could buy materials during the war only with gold, not fiat, money paper. And gold is always accepted and is the ultimate means of payment and is perceived to be an element of stability in the currency and in the ultimate value of the currency, and that historically has always been the reason why governments hold gold.
But I can wax eloquently on this issue. It is the Secretary of the Treasury and the Treasury which owns it. So I am just really a side commentator. He has the real answers.
Secretary RUBIN. It is always good to hear from a citizen, though. Dr. Paul - I do think it is correct, I do think the IMF selling of gold is sound and sensible for their purpose. I do not think the United States should sell their gold, for a whole host of reasons. It is a complicated subject. But I agree with the conclusion of the Chairman.
Mr. PAUL. A pretty good statement for the gold standard.
Secretary RUBIN. That would not be one of my reasons.
Mr. PAUL. I am sure.
Secretary RUBIN. That would actually not be one of my reasons.
[Committee chairman, Rep. Leach]. Thank you Dr. Paul.
MONDAY, JUNE 7, 1999
H.J. RES. 55, The Mailbox Privacy Protection Act
Mr. Speaker, because this is small business appreciation week, I would like to remind my colleagues of the importance of enacting H.J. Res. 55, the Mailbox Privacy Protection Act.
H.J. Res. 55 repeals recently enacted Post Office regulations requiring
Commercial Mail Receiving Agencies to collect personal information about their customers, such as their name, address, social security number, and photograph. These regulations not only force small businesses to intrude into their customers' privacy, but they could impose costs as high as $1 billion on small businesses during the initial six-month compliance period. The long-term costs of this rule are incalculable, but could conceivably reach several billion dollars in the first few years. Some small businesses may even be forced into bankruptcy.
Businesses like Mailboxes Etc. must turn the collected information over to the Post Office. Mr. Speaker, what business in America would not leap at the chance to force their competitors to provide them with their customer names, addresses, social security numbers, and photographs? The Post Office could even mail advertisements to those who use private mail boxes explaining how their privacy would not be invaded if they used a government box.
It is ironic that this regulation comes at a time when the Post Office is getting into an ever increasing number of enterprises not directly related to mail delivery. So, while the Postal Service uses its monopoly on first-class mail to compete with the private sector, it works to make life more difficult for its competitors in the field of mail delivery.
Mr. Speaker, Congress must do more than talk about how it appreciates small business, it must work to lift the burden of big government from America's job-creating small businesses. Passing H.J. Res. 55 and protecting Commercial Mail Receiving Agencies from the Post Office's costly and anti-competitive regulations would be a great place to start.
[H.J. Res. 55 was sent to the Committee on Government Reform, Subcommittee on Postal Service, where it remains.]
Next issue ... continuation of remarks from June 7 and following days, including statements on campaign finance reform, a national ID card, asset forfeiture, gun control, moral society, juvenile justice and more...
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