Sunday, January 6, 2008

Confessions of "Dr. No's" Dr. No

This is reproduced from one of Gary North's newsletters. Mr. North, I have enjoyed your newsletters. Please leave a comment if you would like this post to be removed or modified.


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Issue 715 January 1, 2008


The media call Congressman Ron Paul "Dr. No," because he is a physician who votes "no" on most spending bills. "Dr. No" is still remembered fondly as the first James Bond movie (1962). If you search Google for "Dr. No," you get three articles on the
movie. The fourth is a "Washington Post" article on Dr. Paul, published a year before he launched his presidential bid.

I was the original Dr. No. (The abbreviation for "north" is "No.")

In June, 1976, I was hired as the research assistant for the newly elected Congressman Paul of Texas. He had been in office for about two months, the member of Congress with the least seniority. He had been elected in a mid-term election after the district's congressman resigned to take a bureaucratic post.

On my first day on the job, a Friday, I was given a unique assignment. The House Banking Committee had been debating the re-financing of the International Monetary Fund (IMF). The committee was about to publish its final report. Naturally, the
committee was strongly in favor of putting more taxpayers' money into the relic of the Bretton Woods monetary conference of 1944. Congressman Paul was the only member of the committee who was opposed to the bill.

The committee would publish its report the following week. He was told that he had until Tuesday to prepare a minority report. He was tipped off by a committee staffer that the Tuesday deadline was a fake. The deadline was really Monday. The committee wanted no minority report, and so the chairman told Dr. Paul that the deadline was Tuesday.

It was my task to write the minority report on Saturday, so that he could hand it in on Monday. Dutifully, I came into the office on Saturday and wrote the report. As I recall, it was about 10 pages, double spaced.

I can still remember my main points. First, the official advent of floating exchange rates in late 1973 had made the IMF superfluous. It no longer had to issue SDRs (special drawing rights -- "paper gold") to nations that were caught in a temporary foreign exchange crisis: outflow of foreign currency reserves at the legally fixed exchange rate. Rates were no longer fixed by an international agreement. The free market would continue to settle the matter of the value of every currency, as it had ever since August 15, 1971, when Nixon closed the gold window and floated the dollar "temporarily." Second, it is not a legitimate function of civil government to lend funds to central banks.

As Dr. Paul had been warned, the deadline was Monday. He met the deadline. The full report, with his minority report, was published that week. This minority report so completely amazed the bipartisan Establishment that Dr. Paul was invited to testify to the Senate Banking Committee on his reasons for opposing the funding. I had never heard of this before: a freshman Congressman invited to share his views with a Senate committee. I have not heard of it since.

The Ford Administration was outraged at his report. The plan was being hawked by Treasury Secretary William Simon as being vital to the nation's interests. He was an Insider, a true "team player" for the Establishment. I recall attending a session where Simon came before House Republicans to promote the IMF bill. I have not forgotten his response to one critic: "I do not share your theology of gold." He became famous -- after he had left office -- as a conservative. He signed his name to a book -- a very good book -- ghost written by the magnificent Edith Efron, "A Time for Truth." He followed this with an even more blatantly titled book, "A Time for Action." The time for truth and action is when you're in office, not after. He went on to make tens of millions of dollars as a merchant banker with connections.

Simon had no use for "the theology of gold," as he called it. This is an outlook which rests on a confession of faith: "Relying on full gold coin convertibility is safer than relying on central banks." This is not a theology of gold. It is far more comprehensive than a mere theology of gold. It is a theology that denies the central premise of all statism: salvation by law -- specifically, civil law.

Ron Paul understands this theology and votes in terms of it. William Simon denied it, and was rewarded handsomely for his services.

It was my job to publish a weekly newsletter. Newsletters are major re-election tools for Congress. They are sent out postage-free: the franking privilege. You will see "not printed at government expense" on them. It's true, but printing costs are minimal compared to postage costs.

I wrote two newsletters, one every other week. As with all journalists, I wrote it on Friday, to be mailed out over the weekend. Nobody writes a day in advance.

I knew what Dr. Paul wanted, and he trusted my judgment. He did not edit what I had written.

I had one column, published every other week, called "Where Your Money Goes, and Goes, and Goes...." It was a version of Senator Proxmire's "Golden Fleece Award." Those awards got a lot of free publicity in the media.

I found that the best source of incomparable boondoggles was the National Science Foundation. It still is ( So, I had the NSF send over its daily list of the latest funding projects. Each list always had two or three gems.

I noticed that after the letter went out, our office would receive letters. Time after time, the letters said this:

While I usually agree with your views, I think the decision of the NSF to fund [specific boondoggle] was a good one. The nation needs more information about [boondoggle].

By the way, I work for [Boondoggle].

Joe Blow, Ph.D.

That was my first introduction to the reality of boondoggles. No matter how favorable to limited-government ideas, those on the payrolls of beneficiaries of government funds are not in favor of rolling back government in their niche. They want even more money from the government.

Here is a fundamental insight of free market economics:

Government grows because those few pressure groups that benefit from any government-funded program are highly focused on the maintenance of this funding, while the general public, being unfocused, pays no attention to any given expenditure. There is specific pressure to spend more but little pressure to cut back.

This has not changed since 1976, except for the worst. The number of boondoggles keeps rising, as does the size of the funding.

It was the policy of Federal agencies to send out press releases regarding any infusion of Federal money into a Congressman's district. This was free PR for the Congressman. So, it bought a lot of votes for the agencies. Dr. Paul had a policy of sending out a press release telling the media that he had voted against the program, and why. Over time, some of the agencies ceased sending out these press releases into his district.

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It became clear in the summer of 1976 that Dr. Paul was willing to vote "no" all by himself. There were several votes in which his vote was the only "no" vote.

There were a few other Republicans who would join him from time to time. On military boondoggles, most notoriously the B-1 bomber, he was joined by a few liberal Democrats.

It was common for Congressman to decide what to vote by looking at the early votes on the screen. If John Ashbrook voted "no," and if Texan Jim Collins joined him, most Congressmen knew they could safely vote "yes," and vice versa. If Paul also voted "no," they could be sure a "yes" was called for. Only if Ashbrook and Paul were divided would the Congressman have to check to see which way his staff had told him to vote.

The members learned over time that Paul would vote against any bill for which there was no Constitutional authorization. The common view of his peers was this: "Let the Supreme Court decide whether a law in Constitutional." There was a widespread delegation of Constitutional responsibility on the part of Congress. A vote of 5 to 4 by the Court was assumed to be the standard, not 218 to 217 in the House, 51 to 50 in the Senate, plus the signature of a President.

On the whole, Dr. Paul has been well respected by his peers. He is not a political threat to them. He is not going to get enough votes to upset the 75-year-old system of tax and tax, borrow and borrow, spend and spend. He votes his conscience. He is predictable. He doesn't care if he isn't re-elected. These days, he is always re-elected.

That was not true in November, 1976. Out of over 180,000 votes cast, he lost by 268. He knew that voters had come over from Barbara Jordan's district to vote in his. His protests were of no avail. He left Washington in 1977. So did I. He returned in 1979. I did not.

My brief stay on Capitol Hill confirmed my beliefs held prior to my arrival. These included the following:

1. Most voters want government-funded freebies.
2. Voters expect other voters to pay.
3. The long run is the next election.
4. Government expands unless its budget is cut.
5. Voters do not want to cut budgets.
6. The bureaucracy is close to autonomous.
7. Elected representatives are soon co-opted by the bureaucracies.
8. Money, sex, and power do corrupt.
9. Good-looking single women like to work on Capitol Hill.

Here is my conclusion: "The system will not change until Washington's checks no longer buy much of value." Given the fact that the Bank of England has survived since 1694, I am not optimistic about positive change inside the Beltway.

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