For the first time this cycle, Republicans had a substantive debate. The Fox Business debate was chocked full of hard hitting but fair questions, and the candidates were able to show their policy chops–or lack thereof
There were numerous moments in the debate that highlighted the difference between the establishment candidates and the real conservatives, however, it was the exchange between Ted Cruz and John Kasich that truly defined that difference
Ted Cruz was asked a question about Wall Street crooks, but after he answered, he circled back to a question that two previous candidates had avoided like the plague. “Would you bail out the banks?”
Cruz: “The opening question Jerry asked (would you bail out the big banks again?), nobody gave you an answer to that. I’ll give you an answer: Absolutely not…”
Cavuto: “Senator, I really want to be clear here. Are you saying that if a Bank of America were on the brink, you would let it fail?”
Cruz: “Yes. Now, let’s be clear. There is a role for the Federal Reserve. What the Fed is doing now is [that] it’s a series of philosopher kings trying to guess what’s happening with the economy…”
Cavuto: “I just want to be clear, if you don’t mind. Millions of depositors would be on the line with that decision…If that were to happen again, whatever the reason, that you would let it go–that you would let a Bank of America go?”
Cruz: “So let me be clear. I would not bail them out…what the Fed should be doing is number one: keeping our money tied to a stable level of gold, and number two: serving as a lender of last resort. That’s what central banks do. So if you have a run on a bank, the Fed can serve as a lender of last resort–but it’s not a bailout, it is a loan at higher interest rates…”
What Cruz was saying–and he mentioned it again in an after-debate interview with Cavuto–is that the Fed already protects depositors (up to a certain extent) with FDIC. But Old Man Kasich decided that what the debate needed was more overwrought moralizing, so he decided to lecture Cruz. He didn’t know what he was in for.
Kasich: “Neil, that’s the difference of being an executive…When a bank is ready to go under, and depositors are getting ready to lose their life savings, you just don’t say ‘We believe in philosophical concerns.’ You know what an executive has to decide? When there’s a water crisis, how do we get water to the city? When there’s a school shooting, how do you get there and help heal a community? When there’s a financial crisis, or a crisis with Ebola, you’ve got to go there and try to fix it. Philosophy doesn’t work when you run something…”
This ignited a back and forth, which culminated with the following exchange:
Cruz: “So you said you’d abandon philosophy, and you’d abandon principle. But what would you do if the bank was failing?”
Kasich: “I would not let people who put their money in there all go down.”
Cruz: “So you would bail them out?”
Kasich: “No. As an executive, I would figure out how to separate those people who could afford it versus those people–the hard working folks who put their money in those institutions…you’ve gotta deal with it. You can’t turn a blind eye to it.”
Kasich shot for the moon, and died in orbit. In his desperation to be the working man’s buddy, he violated a principle conservative rule: he made himself the king. In that moment, Kasich became the biggest big government champion there ever was by saying that he would decide who’s money was worth the most.
Kasich also created a straw man. He twisted Cruz’s argument to make it appear cruel, and silly.
Cruz’s actual point: I would not bail out the big banks, but the Fed can act as a lender of last resort for those whose money is locked away in the sinking banks.
Kasich’s straw man: If you refused to bail out the banks, depositors would lose all their money. Cruz wouldn’t bail out the banks. Therefore, Cruz would let the passengers go down with the ship.
See the distinction? Cruz plainly and repeatedly mentioned the Fed acting as a lender of last resort, but Kasich detached the two components of Cruz’s answer, implying ignorance on Cruz’s part.
I guess Kasich thought that being loud would mask the fact that he was badly misrepresenting Cruz’s argument, as well as the fact that his own answer made him look like a statist tool. But the audience noticed, and booed big time.
This is where the wheat is separated from the chaff. Kasich, and those like him, are not conservatives. They never were. Where Cruz will boldly answer questions, and defend his positions wisely, Kasich revealed his true nature as an establishment goon.