The New York Times, for some inexplicable reason, thought that John Kasich, former Congressmember and current managing director of Lehman Brothers Investment Banking Group, had something intelligent to say about Bush’s bloated budget. Thus, it engaged him to write a February 1st opinion piece awkwardly titled, Deficits, Fruit Flies and the Beltway. He writes a bunch of self-serving pablum reminding us that he and his Repubican chums in Congress were responsible for the last balanced U.S. budget (I guess he forgot the ‘minor’ part that Bill Clinton and Bob Rubin played). But the real howler is this tidy aphorism about deficits, taxes and spending: “To my Democratic friends: deficits are not caused by taxes being too low, but by spending being too high.” This phrase ranks right up there with Archimedes’ “Eureka!” as a signal of an earth-shattering scientific relevation. While it’s certainly self-evident that deficits aren’t caused by taxes being too low, once you have a deficit raising taxes is a valid and legitimate (though politically unpopular) means of addressing the fiscal imbalance.
Another piece of news I have for Mr. Kasich: the spending that’s breaking the back of Bush’s budget is not ethanol subsidies, foreign aid, fruit fly studies, the highway or farm programs (as he contends). The reason for the shortfall is Bush’s monumental tax cutting folly AND the dramatic increase in Pentagon spending included in this budget. Committing these two heinous economic policy mistakes brings you to the humongous deficits we now face.
If Kasich had acknowledged either of these issues I could respect his viewpoint. But as it is he remains the Republican hack that he was and apparently still is.
Oh, and I wonder how much he really knows about investment banking? I wouldn’t trust him with my money, that’s for sure.