The countdown to the next GOP primary in South Carolina is on. We've got a new poll. It's out from the American research group. It says Romney 29, Gingrich 25, Ron Paul 20. By the way, that's an 11 point surge from where Ron Paul was just one week ago. Congressman Paul joins us live in just a few moments. Welcome back to the cover report. So after Congressman Ron Paul strong second place finish in New Hampshire, he is winning plot. It's everywhere. And I ask again this evening, can the GOP find a home for the principles of free market, Austrian economic message? Let's ask the man himself joining us now live, Texas Republican Congressman and presidential hopeful. Ron Paul, Dr. Paul as always welcome back. Before we begin sir, take a listen to what South Carolina Senator Jim Dement told me yesterday. Okay. Probably Ron Paul's the only one willing to say we really need to cut the budget and we need to cut some of the functions of the federal government. The Republicans must recognize that Ron Paul's message of limited government, individual liberty, more accountability at the Federal Reserve, better monetary policy. These are things that need to be core principles in the Republican Party. All right. Congressman Paul, you heard the influential Senator Jim Dement, influential in South Carolina and across the country. Do you believe now? Okay. After your semi victory in New Hampshire, you had a good close second. Do you believe that there's room and the GOP for your principles? Well, there better be or there won't be much left to the party because we're really talking about the fundamentals that they claim they believed in for a long time. I mean, for cutting spending and bouncing budgets and sound money. I mean, that's what we've talked about, you know, all the way back to the 80s, but we never followed through is a problem. And then in this century, you know, in the first decade, we had the House of the Senate and the presidency. And I think we blew it. We doubled the size of the Department of Education. We had prescription drug program. And then we had that Sarabane's auction. I'm told that could have cost the business community a trillion dollars. So, no, I think they better pay attention to those of us who believe in free markets and not just give lip service to us or, you know, they're not going to do well. Congressman Charles Krauthammer of all people wrote a very complimentary article about you. And I want to ask you about one of his key points. He believes that if you can't get the nomination, you should deliver one of the key note speeches at the Republican Convention to push your principles. Would you do that? Would you give a key note speech? Is that something that appeals to you? Well, I think so. I don't want them to write it for me, but I appreciate Charles's comments. He's another fellow physician, I guess you know. So, I think that's a real nice compliment, but of course, if I could write the speech, I think I'd be very interested in doing it. All right, good. Now, on to South Carolina. As you know, it's a pro defense state. There's a lot of military bases, there's contractors, there's builders. You have a relatively anti-war message. Are there going to be difficulties on that point? You're closing pretty good, but is the defense message going to be difficult for South Carolina primary voters? Well, so far, I don't think so, because we have ads running down there, and I think that's helped switch some people over. And I think most people are aware of the fact that I get twice as much money from active military personnel than all the other Republican candidates put together. So, I'm getting a lot of support from the military, and I always got a lot of support from veterans. So, I think it's a fallacy to think that everybody in the military, automatically wants to expand war. I remember the 60s, I was in, that's the last thing I wanted to be jailed to do in 1965, was to expand the war and be at NOM and go over in the Cambodia, that concerned me to a great deal. So, I think that's a normal reaction, but I think people going in the military to defend the country, and they're willing to do it. But if it's fighting a war that isn't declared or under a UN banner or NATO, and you get bogged down for 10 years, and it contributes to our financial crisis, people can get pretty tired of that. And I think the American people are real tired of our foreign policy in the Middle East right now. You have copiously avoided attacking Mitt Romney, and the Bain Capital flag about private equity companies. Obviously, Gingrich and Perry have. Why have you avoided attacking Mitt Romney? What point, what principle do you want to make on this? Well, of course, I'm willing to attack him on, on some of the policies that he's had before, and we disagree on, I've done that, and use the word flip-flopping on many occasions. But not attacking on bains, they've asked me about it, and I said explicitly that that's part of the market. That's the way the market works. Restructuring is a market principle. And those who are jumping on him, either they don't understand economics, or if they do understand economics, they're demagoguing the issue for trying to make a political point. So in that sense, you know, it came, it looked like I was defending Mitt, and in that case, I was, because it's very important that you cleanse a system. If a company's going bankrupt, and you don't have restructuring, everybody suffers. And if you can get some restructuring, and you can create jobs, I don't know the details of everything he did, and I don't want to vouch for that. But the whole principle that they were attacking him on, I think it was false. Besides, they misquoted him anyway. All he said was, you know, that, well, if a company doesn't provide his service for me, I should change companies. Well, if you don't understand, that's important. That's what a businessman would do. Let me ask you, Fed question, I can't resist. The minutes of the Fed's meeting five years ago, and they unlocked these minutes with a five-year time lag. It shows in the transcript, sir, that Bernanke and company completely missed the financial and housing meltdown. In fact, in 2006, where these minutes come from, Bernanke said, it is unlikely to see growth derailed by the housing market. Now, the Federal Reserve System has hundreds of PhD economists. How is it possible that they completely missed the worst meltdown since the 1930s? Because they follow the wrong ideas on economics, and they don't look at the business cycle being related to what they're doing at the Fed. Otherwise, they would have to indict themselves. So, and he was falling through with Greenspan. He was doing the same thing, and they were in total denial. But you know that if you go back and look at some of the Austrian economists and the Hayekians and Misiens, they explain this. They were right about it. The only thing that we don't claim is that we know the exact day the bubble will burst. But we can identify bubbles. We know where they come from. And when they burst, you have to have a correction. And then you have to have unemployment. But the more you interfere with the correction, the longer the correction lasts. And this is why this correction is lingering and why if we don't get more people to understand the business cycle, the fact that I think you make an important point, they have hundreds of economists all through the university system. But they know they don't get the job unless they say what the Fed wants them to say. There's no independence. I don't ever expect independent thinking at the Federal Reserve. They're there to defend a policy is a total failure and has been and we have to change it. All right, we have to change it. Many thanks, Congressman Ron Paulister. Good luck on the campaign trail. We appreciate you coming back.