Ron Paul's Difficulties Understanding Financial Markets

I saw a very scary interview on Friday. Larry Kudlow Had Ron Paul on for a few minutes, after Friday's turbulent equity market performance.

First, I must confess, I don't know all that much about Ron Paul, and I'm not too sure I want to know more. Despite several veteran financial market commentators agreeing that Bernanke & Co. at the Fed had cleverly engineered a way to provide liquidity to the US equity markets without either lowering rates or using the discount window, Paul insisted that it had bailed out wealthy financiers and their companies.

No amount of explanation that the Fed had simply extended credit on securities pledged to it by various securities firms, a sort of repo swap, would convince Paul that Friday's actions by the Fed were not a bail out.

For me, this kind of lack of intelligence and perspective is awfully scary in a Presidential candidate.

It's the same sort of ineptitude and ignorance that led John McCain to believe he did something good with his co-authored campaign finance 'reform' bill some years ago. The thing's an abomination, and, as with all campaign finance 'reform,' created more problems than it solved. If it solved any. And then it impinged on First Amendment free speech rights in the bargain.

Nice going, John. Maybe stick to being a retired naval aviator?

But, back to Ron Paul. Beyond misunderstanding how providing liquidity through repo loans for the short term is not the same as simply bailing out a financial firm, he then went on to demand that such a 'bail out' should only go forward if homeowners were similarly bailed out.

This is too much for me. Not only is Paul economically illiterate, but he then behaves like a liberal Democrat, demanding that relief be ladled out for everyone.

I was unimpressed by Mr. Paul's interview with Kudlow. Yet another reason to favor a really long Presidential campaign season....