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CNBC Digital Video: John Kasich Sits Down with CNBC’s Chief Washington Correspondent John Harwood

WHEN: Today, Friday, February 19

WHERE: CNBC.com's Speakeasy with John Harwood

In the Republican presidential race, John Kasich has been among the most-credentialed but least-noted candidates. He spent nearly two decades in the U.S. House, where he rose to chair the Budget Committee and helped negotiate a deal with Bill Clinton's White House to eliminate federal deficits for the first time since the 1960s. Now he's serving his second term as governor of Ohio. Kasich has lagged in national polls, fundraising and in Iowa's caucuses earlier this month. But his surprise showing in New Hampshire — where he rode a strategy built around town hall meetings with a positive message to finish second behind Donald Trump — has given him a glimmer of hope as the campaign heads toward the Midwest in early March. He sat down with me in a Charleston, South Carolina, hotel on Thursday to discuss his economic agenda and his prospects.

A partial transcript from Speakeasy with John Harwood featuring John Kasich follows. All references must be sourced to CNBC.com:

JOHN HARWOOD: Instead of anger you're talking empathy. You don't have the standard rhetorical hooks, the apocalyptic vision of the abyss that we're falling into under Clinton and Obama. Doesn't everything we've seen about this campaign suggest the market for that is just pretty small in 2016?

JOHN KASICH: I think I finished second in New Hampshire didn't I? Beat everybody else except Trump. Well, look, I mean, if that's where the market is then they're probably not buyin' me. But I don't think that's where the market is. I don't think people wanna live in the dark. I don't think, I think they have deep concerns, and they should. If we don't have solutions to these problems, and if we dwell on the negatives, and not on the positives how we gonna get outta this? How we gonna change things? How are we gonna right the ship so that we do have the things that and answer the concerns of these people?

JOHN HARWOOD: Candidates are giving voters a story about why their economic problems exist. Bernie Sanders says the business model of Wall Street is fraud. You know Wall Street a little bit.

JOHN KASICH: I mean, I don't even know what that means. What does he mean it's a fraud? Wall Street's there to provide some of the glue to make that economic system churn. I mean, did we have problems there? Of course. Is there too much greed? Of course. Are there rules and regulations that are necessary? Of course. But what's he think we should do, abolish Wall Street? I mean, it's so absurd.

JOHN HARWOOD: Ted Cruz, I was at one of his rallies in New Hampshire, and he said, "You know what?"

JOHN KASICH: How'd he do?

JOHN HARWOOD: He said, I—

JOHN KASICH: How did he do in New Hampshire?

JOHN HARWOOD: -- not as well as you.

JOHN KASICH: Thank you.

JOHN HARWOOD: He said, "Bernie's right. The economy is rigged."

JOHN KASICH: Does he say that the rich are stealing from the poor? Here's the thing the way I look at it. I believe the single biggest cause of income inequality in this country is the fact that people don't have the skills to command the pay based on the skills they have. Which brings up the question about our fundamental effectiveness of education today, and providing the skills.

JOHN HARWOOD: When Trump talks about the economy he says the problem is Mexico, China, Japan.

JOHN KASICH: No, I think our core economic problem is we don't have a policy that creates economic growth because we overregulate, overtax, and can't balance a budget. To blame these other bogeymen misses, you can just beat up Mexico all day long. But if you can't balance a budget, have common sense regulations, help small business, and cut taxes, you're just not gonna get what you need.

JOHN HARWOOD: Let's go back to the Wall Street bogeyman. Because you got hit by Chris Christie's super PAC for being a Lehman Brothers banker who was part of the problem before it all went down.

JOHN KASICH: If I had bankrupted Lehman Brothers from a two man office in Columbus, Ohio I should be pope, not running for president.

JOHN HARWOOD: Are you not concerned that if you rise higher in the race that basic connection, John Kasich, Lehman Brothers, because of how average Americans feel about Wall Street, is going to be crippling for you?

JOHN KASICH: Well, I don't know, I don't really know how average Americans feel about Wall Street. You know, they ran this against me when I ran for governor, and I won. And they've tried this on me since I've been in the race. And I'm rising in the polls. So –

JOHN HARWOOD: If you look at national polls now the top three candidates are Trump, Cruz, Rubio.

JOHN KASICH: I just apparently one just came—

JOHN HARWOOD: And you're movin' up. You're movin' up.

JOHN KASICH: --one of 'em just, one just came out today, and had me tied for third. Pretty good considerin', you know, people still don't know who I am.

JOHN HARWOOD: Isn't the reality though when you look at the proportions, yes, you are rising, that there are two lanes in this race? There's a truck lane that Donald Trump is in. And there are people ridin' bicycles in the other lane, and you're one of 'em.

JOHN KASICH: What do you mean I'm ridin' a bicycle? Maybe my bicycle – look, I'm not worried about it. All I'm concerned about is having enough time to meet as many people as I can meet, and, you know, and have the resources to be able to put a lot of my messages on television, because the next steps –

JOHN HARWOOD: Are you in through Ohio no matter what?

JOHN KASICH: I could get hit by lightning. I mean, I'm not gonna say, "No matter what happens." But we anticipate being in Ohio, yeah. And lookin' forward to winner take all.

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