Paul on leadership, management, and fixing the economy

COOPER: Congressman Paul, what makes you capable of being a leader both on the economy and the military?

PAUL: OK. The Constitution is very clear that the president is commander in chief of the military, but the president is not the commander in chief of the economy or of the people. And when we get asked questions like how are you going to manage the economy, it's a reflection of conventional wisdom, but of a lot of lack of understanding of how the economy works.

The president is not supposed to manage and run the economy. The people are supposed to do this. The government is supposed to give them sound money, low taxes, less regulation. The people are supposed to run it.

But here, we're assuming that the president is supposed to run the economy. We're not supposed to manage. We're not supposed to manage the people's...

COOPER: What role do you think the federal government should have -- I mean, does the federal government in your opinion have a role in stimulating the economy?

PAUL: Yes, by lower taxes and less regulation. They could do a whole lot by having sound money, where we don't print the money out of thin air. That causes the business cycle. That causes your bubbles.

We're always dealing with the symptoms of the disease and never saying, "how did this come about?" You know, it comes about because we have a Federal Reserve that creates money and prints it out of thin air. There is a lot of malinvestment.

That's the most important thing to understand about the inflation of the monetary system, is the malinvestment. Then, later on, people suffer. You wipe out the middle class. But the evil of it all is the vehicle for financing wars that we shouldn't be in and a welfare state that we shouldn't be doing.

So, yes, we have a role to play, but it's a negative role. We want the people to be free. We don't want to manage the people and tell them how to live. And we need a commander in chief. But the most important thing as a commander in chief is not moving troops around, as much as it is having a wise foreign policy that doesn't get us involved in so many things that we get trapped in and we linger year after year. We've been doing this for so long.

And I like President Bush's argument that we have a humble foreign policy when he ran in 2000, and that we not be the policemen of the world.