How Ron Paul Won the Debate — Again

Congressman Ron Paul won the Republican debate last night, and not for the first time, by holding his fire and saying almost nothing until, almost in unison, the whole group of candidates and questioners turned to him, and cheerfully so, for wisdom. It became clear that they understand it is Dr. Paul who has the grasp of the central problem at the bottom of our economic troubles — the lack of sound money.

The first glimpse of this came nine minutes into the debate. It followed Speaker Gingrich’s tirade against the chairman of the Federal Reserve’s board of governors, Ben Bernanke. “I don’t see anybody in the news media demanding the kind of transparency at the Fed that you would demand of every other aspect of the federal government. And I think that it is corrupt and it is wrong for one man to have that kind of secret power.”

“So, Congressman Paul,” interjected Karen Tumulty of the Washington Post, “where do you come down on this?”

It is fascinating to watch the appreciative laughter that greeted her question. Everyone at the table understood that Dr. Paul was way out in front of them, and the Texas libertarian gave his first glimpse of why. “One thing I might say is that we have made some inroads on the Federal Reserve. We passed a bill last year, we got a partial audit of the Fed. We’ve learned a whole lot. They were dealing in 15 trillion dollars, five trillion went overseas to bail out foreign banks.”

Dr. Paul then credited key news organizations, including Bloomberg News, one of the hosts of the debate, and Fox News, for pressing law suits to force disclosures by the Fed. And he expressed the view that to make progress on the issue coalitions could be built, “without sacrificing principles.” It was an allusion to his effort to get Congress to force a Fed audit, which he started as a lone voice and which eventually gained broad, bipartisan support.

The second Ron Paul moment was again set up by Speaker Gingrich, who was railing about how the Treasury Secretaries Paulson and Geithner and Mr. Bernanke “didn’t have a clue.” At that point Charlie Rose, who did a marvelous job as moderator, turned to the question of housing and asked Dr. Paul whether he would get the Federal government out of housing. “Absolutely,” Dr. Paul replied. “No credit?” Mr. Rose asked. “No Freddie Mac, Fannie mae, no nothing?”

“No. That’s where the distortions come,” Dr. Paul replied. “That’s where the moral hazard comes from, that’s where the mal-investment . . . It was predictable. You talked about what economists we should look to. And unfortunately we’ve been living with Keynesian economics for many, many decades, and everybody who was right about predicting the bubbles were Austrian economists.”

Continued he: “ . . They said [the bubbles] were coming, and yet they’re also saying, and I agree with them, that everything we’re doing right now is wrong. So what we did with the housing bubble, yes, we had too many houses, it was glaring in our face, the bubble was doomed to burst. It came because of Fannie Mae, Freddie Mac, easy credit, and also Community Reinvestment Act. So who got into trouble? The people who did the speculating — Wall Street, the derivatives market, they got the bailout, they got the privileges.”

“So what happened to the middle class. They lost their jobs, they lost the houses. This whole system is all messed up, and what I hear here is just tinkering with the current system, and not looking at something new and different and it’s a free market economy without a Federal Reserve System. With Sound money. If you don’t have that, you’re going to continue with the bubble. . . . You need the correction. You need to get rid of the mal-investment. And the debt. The debt is the burden on the economy.”

It was a Ron Paul classic. He came back to the issue again, when the candidates were given the chance to question one another directly. Dr. Paul turned to Herman Cain, a former director of the Federal Reserve Bank at Kansas City, and asked him about his past opposition to an audit. He was met with denials and the advice that one has to be careful about what one sees on the internet. The Paul campaign promptly put up on the Web clips that made it clear that Dr. Paul had not misquoted him.

We don’t mean to suggest that there were not some fine moments delivered last night by some of the other candidates — Senator Santorum on manufacturing, say, or Congressman Bachmann on government spending. Governors Romney and Huntsman had a lively difference of opinion on China, and Speaker Gingrich backed up Governor Palin — who wasn’t there and is not running — on the death panels. What was struck us, though, was the degree to which the others were “tinkering,” as Dr. Paul put it, while Dr. Paul kept his eye on the main issue bedeviling the economy today, which is the lack of a sound and stable dollar. It was a winning performance.