Wednesday, February 10, 2016

Does John Kasich Understand Austrian School Business Cycle Theory?

John Kasich, who is seeking the Republican Party's nomination for the presidency, in my view is perhaps the most boring person in the world. I'd rather watch a colonoscopy video than listen to him speak.

When he appears on television, my reaction isn't that much different from the reaction of socialist Joe Weisenthal:

And up to now, I could get away with this because I didn't think he was going anywhere in the primaries. His second place finish in the New Hampshire primary changes my view slightly.

And Krugman hates him. Krugman reported on Monday:
However, there seems to be a real possibility for one thing that seemed unlikely before the RubiOS bug manifested itself: that John Kasich will come in second on the Republican side.

If he does, there will be an outpouring of praise from self-proclaimed centrists, who will declare Kasich the sensible, responsible Republican of their dreams. So let me attempt what will surely be a futile preemptive strike, and note that on economic policy — which sort of matters — Kasich is terrible, arguably worse than the rest of the GOP field.

It’s not just his balanced-budget fetishism, which would be disastrous in an economic crisis. He’s also a hard-money man.

Ted Cruz has gotten some scrutiny, although not enough, for his goldbuggism. But Kasich, when asked why wages have stagnated, gave as his number one reason “because the Federal Reserve kept interest rates so low” — because this diverted investment into stocks, or something.
Well, according to Austrian business cycle theory, Fed manipulated interest rates, that are lower than market rates, do divert funds into the capital goods sector, e.g. stocks. The Fed manipulation in the boom phase of the cycle doesn't, though, result in stagnant wages, according to ABCT. But understanding the diversion into the capital goods sector is pretty sophisticated stuff for a politician.

I'm guessing he somehow stumbled across the truth and has no idea who Mises and Hayek are. And don't mistake Kasich for a libertarian He doesn't come close to properly answering many of Laurence Vance's 50 questions. Consider (via On the Issues):

He does not want to raise the minimum wage willy-nilly but is in favor of it being done at the state level.

He says China doesn't own the South China Sea and wants to show the US Navy there.

Wants to fight ISIS with a coalition including US ground troops.

Opposes ObamaCare but not all public health programs.

Walked out of a service when preacher opined against US missiles in Europe

He believes legalizing marijuna  sends a mixed signals to kids.

The former managing director at Lehman Brothers has said "Wall Street is too greedy."



  1. I live in Ohio. Kasich is no Austrian, much less a believer in the free market. He is a typical central planner with R next to his name. Worse, the entire Ohio comeback that he and his band of loyal followers boast about is pure fiction designed from the beginning to setup a presidential run. As Ohio's governor, he actually inherited a job creation rate that was higher than the national average and he turned it a rate below the national average.

    1. Thanks for the Ohio Report. Did oil fracking have anything to do with things there as Trump says?

  2. And, before he couldn't talk about encryption, he was talking about mandating backdoor encryption access.

    Apparently, he would outlaw large prime numbers, as he surely knows terrorists could build their own encryption software pretty easily. The only way to solve the issue would be to go after the underlying mathematics.

    Then, to lower energy requirements, improve the economy, and reduce the overweight condition of the population, he would mandate a 10% reduction in gravity.

    In other words, he's a fucking idiot.

  3. Ohio's comeback was mainly due to Columbus and Cincinnati. Cleveland and Toledo (Little Detroit) are still shit holes, and most of Northwest Ohio has remained pretty much the same. Can't speak for Southeast Ohio, I have no family or friends there. Everything southeast of Athens is pretty much West Virginia to most of us. To me if he's good enough for Ohio (overwhelming 65% vote in 2014) than he's good enough for President. Could be worse, you know?