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Q] I want to ask you some questions about the way you make decisions and then some questions about issues. To me the signal decision of this election was the way you chose your vice-president and the way he chose his. You are known for deliberation and being a rational decision-maker. But sometimes you have to make decisions another way. I just wanted to ask you whether you have made gut decisions during the course of this and whether you can tell me about any of those.
[BO] Sure. I think that, in some ways deciding to run in the first place was a gut decision. If you looked at the pros and cons of running now versus later, there was a lot of potential downside. I was in a very good place—[inaudible] Michelle and the girls were very happy and it was [inaudible] with some risks if the campaign wasn’t successful then I would be seen as presumptuous—probably lose some potential leverage in the senate. My gut told me that the country was looking for something different and that if we were able to build an organization that harnesses that. [Inaudible]
[Q] You had plenty of time to make that decision, I am talking about…
[BO] A spot, instinctual
Q] Yeah, instinctual
[BO] Well, during the course of this campaign probably our response to those Reverend Wright videos had to be a spot decision, because frankly it was unanticipated and I hadn’t seen those
incendiary videos before. The decision to make it big as opposed to make it small.
[Q] To make the [Philadelphia] speech.
[BO] To write a speech in two days and deliver it at a time when there was a singular focus on the topic I think is an example of having to make decision based on what in my gut would make sense.
[Q] What was your gut telling you?
[BO] My gut was telling me that this was a teachable moment and that if I tried to do the usual political damage control instead of talking to the American people like an adult—like they were adults and could understand the complexities of race that I would be not only doing damage to the campaign but missing an important opportunity for leadership.
[Q] Let me give you one. I’ve talked to people about the day that McCain suspended.
[BO] That is another one where we had to make a decision quickly.
[Q] You were getting phone calls from people in Washington.
[BO] We were getting phone calls from people in Washington and I think there were some on our staff that were thinking that maybe we should interject and respond in some way. My strong feeling was that this situation was of such seriousness that it was important not to chase the cameras. One of the advantages that we had was that I think we had been steady from the start. I had already called my economic advisors together. I had already put forward a clear set of principles that were in the process of being adopted. I had been talking to Paulson and Bernanke and the congressional leadership on a regular basis so it wasn’t like I felt in any way that I was out of the loop. I felt like I was helping to shape the direction of this. And one of the things that I have become more and more convinced of during the course of this campaign is that in an environment like this one where people are really paying attention because they are worried and they are scared good policy will end up being good politics—more than I think might have been true during boom times in the nineties when people were just feeling like it was sport, it was a game.
[Q] It has been my experience from [covering] far too many of these that when people are paying attention, negative ads are less effective.
[BO] That is exactly right, because people are thinking to themselves I want to see how this guy operates in solving problems not how entertaining he or she is, or what the latest gossip on the cable news is.
[Q] When people were saying to you that day that McCain suspending, he’s going to seem above the fray and I know that some people felt that way, you didn’t go with that.
[BO] I didn’t believe it. I have to tell you, one of the benefit s of running this 22 month gauntlet is that you have been through some ups and you have been through some downs. And you start realizing that what seems important or clever or in need of some dramatic moment a lot of times just needs reflection and care. And I think that was an example of where my style at least worked. There are going to be some times where I think I won’t have that luxury of thinking through all the angles. Obviously I wasn’t President at the time which influenced my decision. I did not control all the levers of power. And I think that the one thing I have become pretty confident about is being able to tap into the smartest people on any subject and to draw together a lot of contrary or contradictory perspectives. And push people’s arguments against each other, ask the right questions and figure out at a least a framework for solving problems.
[Q] Let me ask you about a situation like that. I have been collecting accounts of your meeting with David Petraeus in Baghdad. And you had [inaudible] after he had made a really strong pitch [inaudible] for maximum flexibility. A lot of politicians at that moment would have said [inaudible] but from what I hear, you pushed back.
[BO] I did. I remember the conversation, pretty precisely. He made the case for maximum flexibility and I said you know what if I were in your shoes I would be making the exact same argument because your job right now is to succeed in Iraq on as favorable terms as we can get. My job as a potential commander in chief is to view your counsel and your interests through the prism of our overall national security which includes what is happening in Afghanistan, which includes the costs to our image in the middle east, to the continued occupation, which includes the financial costs of our occupation, which includes what it is doing to our military. So I said look, I described in my mind at list an analogous situation where I am sure he has to deal with situations where the commanding officer in [inaudible] says I need more troops here now because I really think I can make progress doing x y and z. That commanding officer is doing his job in Ramadi, but Petraeus’s job is to step back and see how does it impact Iraq as a whole. My argument was I have got to do the same thing here. And based on my strong assessment particularly having just come from Afghanistan were going to have to make a different decision. But the point is that hopefully I communicated to the press my complete respect and gratitude to him and Proder who was in the meeting for their outstanding work. Our differences don’t necessarily derive from differences in sort of, or my differences with him don’t derive from tactical objections to his approach. But rather from a strategic framework that is trying to take into account the challenges to our national security and the fact that we’ve got finite resources.
[Q] But you didn’t have to make that point.
[BO] No well I think that I did, I felt it necessary to make that point even though I tried not to talk about it publicly, not knowing sort of what the terms of our discussion were. Precisely because I respect the Petraeus and [inaudible], precisely because they’ve done a good job and because my job as a candidate is preparing myself to be commander in chief. And I want to make sure that I’m taking their arguments seriously, they understand I’m taking their argument seriously. I want our military brass and our mid level officers to all feel that I am going to be listening to them. This notion that I’m not paying attention to them is nonsense. I’m listening to them very carefully and I take their advice with great seriousness. I just want them to know that I’ve got a, I potentially will have a broader task at hand.
[BO] And I want to make sure that we establish a relationship of respect early on. Again not just with the joint chiefs but also with folks who align responsibly on the ground.
[Q] Now I’ve heard that conversation characterized as everything from angry to spirited to agreeable. And I kind of took it as
[BO] I would say it was between spirited and agreeable. That’s how I would characterize it.
[Q] And after you made that point, [Petraeus] said I understand now.
[BO]He did. I mean I think we came away sort of thinking that, let me put it this way, I’m glad Patreus is in Centcom. He now has to, has these broader response abilities of seeing what’s happening in Afghanistan and Pakistan. I think he’s a very, he’s not just an astute soldier, but I think he’s somebody who cares about facts and cares about the reality on the ground. I don’t think he comes at this with an ideological pre-disposition. That’s one of the reasons I think he’s been successful in moving the ball forward in Iraq. And I hope that he’s applying that same perspective to what’s happening in Afghanistan.
[Q] Lets go back to we’re now moving to the issue portion. When you questioned him [in the Senate Foreign Relations Committee] the last time. You asked him about what [conditions on the ground] would be ‘good enough’ for us to leave Iraq.
[Q] As you sit here today, and you look at what’s happening in Iraq, is it good enough?
[BO] I don’t think it’s quite good enough yet because I think we have to do a little more training. We’ve got to build up the logistical capacity. I think the possibilities of ethnic strife breaking out again are still present, precisely because the political system has not stabilized itself yet. But I do believe that we are at a point now where we can start drawing down troops. I think we can time a process where the drawing down of troops parallel to building up the capacity in Iraq and the Sofa agreement that just, the Sofa that was just put forward I think reflects that reality.
[Q] On Afghanistan, couple questions. I was at Walter Reed and some of the kids there were casualties of the firebase that was overrun–16 wounded, 9 killed.
[BO] We were very, it was a week or 2 weeks after those kids [were overrun], when we made our trip [to Afghanistan]
[Q] And then some of those kids at Walter Reed, they said [the Taliban attackers came] across the border from Pakistan, only 30 km away. Should we, is it right what we’ve started doing to chase them back across the border?…How do you deal with that?
[BO] Here’s my attitude. Number 1 we can’t have our troops remain sitting ducks. We should, under our coalition mandate we are in Afghanistan at the invitation of the afghan government. We’re there legally, under international watch. When those troops are attacked, they have a right to defend themselves. Period. Now I think that the most critical task that we have in Afghanistan is to not only strengthen the Afghan government, it’s military capacity, it’s ability to deliver services to its people, its capacity to work with the agricultural sector there to replace the poppy crop. But it’s to also work through a viable strategy for Pakistan. My sense is that Zedari has already been willing to step out and commit himself in a pretty difficult situation to work with the United States to root out militant terrorists.
So, building a different relationship with the Pakistani government, the Pakistani military, the ISI. Working with Pakistan, this government to deliver for its people so it gains legitimacy, in all regions of the country. Working with Pakistan and India to try to resolve, and Kashmir, crisis in a serious way. Those are all critical tasks for the next administration. Kashmir in particular is an interesting situation where that is obviously a potential tar pit diplomatically. But, for us to devote serious diplomatic resources to get a special envoy in there, to figure out a plausible approach, and essentially make the argument to the Indians, you guys are on the brink of being an economic superpower, why do you want to keep on messing with this? To make the argument to the Pakistanis, look at India and what they are doing, why do you want to keep n being bogged down with this particularly at a time where the biggest threat now is coming from the Afghan boarder? I think there is a moment where potentially we could get their attention. It won’t be easy, but it’s important.
[Q] Sounds like a job for Bill Clinton.
[BO] Might not be bad. I actually talked to Bill, I talked to President Clinton about this when we had lunch in Harlem.
[Q] …Should we be talking to the Taliban? I don’t mean you.
[BO] You know, I think that this is one useful lesson that is applicable from Iraq. The Great Awakening, the Sunni Awakening changed the dynamic in Iraq fundamentally. It could not have occurred unless there were some contacts and intermediaries to peel off those who are tribal leaders, regional leaders, Sunni nationalists, from a more radical Messianic brand of insurgency. Well whether there are those same opportunities in Afghanistan I think should be explored. I can’t guarantee that they are and one of the problems that we had and we’ve historically had, the Russians historically had it, the British historically had it, is our intelligence there is poor and our understanding of the culture is poor. And our understanding of the tribal and clan ties that exist there are complicated. But the Afghans don’t see things in the same black and white terms on many of these issues that we legitimately do because we’re concerned about our safety and our security. But what we’re going to have to do is to have folks on the ground who do develop that understanding, I was very impressed with McKernan, very impressed with a lot of the folks who are there. My impression is that those who have a chance to stay there a little bit longer and develop clear understanding of the formidable complexities are going to achieve a lot more than simply us rotating in folks on a rapid rotation and I think that people on the ground tend to agree with me on that.
[Q] You talk about the need for an Apollo project and it just seems to me that if there is a unified big bang I theory in this election, it’s a program that involved national security, jobs growth, environmental…
[Q] So why haven’t you given the big speech about it?
[BO] We actually gave a very big speech of it in New Hampshire very early on. And I recommend pulling that speech back up because it was pretty comprehensive and it gave the blueprint for our energy approach. I think that the immediate economic crisis and the consequent decline in oil prices has led us to a dangerous point where maybe we start thinking in terms of business as usual again.
The biggest problem with our energy policy has been to lurch from crisis to trance. And what we need is a sustained, serious effort. Now, I actually think the biggest opportunity right now is not just gas prices at the pump but the fact that the engine for economic growth for the last 20 years is not going to be there for the next 20, and that was consumer spending. I mean, basically, we turbo-charged this economy based on cheap credit. Whatever else we think is going to happen over the next certainly 5 years, one thing we know, the days of easy credit are going to be over because there is just too much de-leveraging taking place, too much debt both at the government level, corporate level and consumer level. And what that means is that just from a purely economic perspective, finding the new driver of our economy is going to be critical. There is no better potential driver that pervades all aspects of our economy than a new energy economy.
I was just reading an article in the New York Times by Michael Pollen about food and the fact that our entire agricultural system is built on cheap oil. As a consequence, our agriculture sector actually is contributing more greenhouse gases than our transportation sector. And in the mean time, it’s creating monocultures that are vulnerable to national security threats, are now vulnerable to sky-high food prices or crashes in food prices, huge swings in commodity prices, and are partly responsible for the explosion in our healthcare costs because they’re contributing to type 2 diabetes, stroke and heart disease, obesity, all the things that are driving our huge explosion in healthcare costs. That’s just one sector of the economy. You think about the same thing is true on transportation. The same thing is true on how we construct our buildings. The same is true across the board.
For us to say we are just going to completely revamp how we use energy in a way that deals with climate change, deals with national security and drives our economy, that’s going to be my number one priority when I get into office, assuming, obviously, that we have done enough to just stabilize the immediate economic situation. In conversations with folks like Warren Buffet, Larry Summers, and the other people that I’ve been spending time with on this, I described it as we’ve got a boat with a lot of leaks and we need to get it into port. That’s what the financial rescue package is about. But once we get it into port, once the credit markets are functioning effectively, then it’s time for us to go back to the fundamentals of this economy. Now, the one other point I want to make about this, though, we can’t divorce the energy issue from what I believe has to be the dominant political theme underlying everything — the economy, healthcare, you name it. And that is restoring a sense that we’re growing the economy from the bottom up and not the top down. That’s the overarching philosophical change that we’ve got to have. It’s the attitude that Henry Ford had when he paid his workers a decent wage. That means they’re going to be able to buy their cars. The irony of McCain trying to make this whole Joe the Plumber thing as his sort of mantra over the last few days, if you look at the transcript of my conversation with him, the point I was making was two-fold. Number one, I want to give you a tax cut sooner so you can save sooner to start your business sooner because the average plumber starting off sure isn’t making $250,000 a year.
[Q] Neither is Joe.
[BO] Of course. And the second thing is plumbers, like everybody else, you need customers. And if everybody’s broke, you’re not going to be able to build your business. That’s why I tell that little pie story in speeches. It’s a simple principle that we’ve lost, which is when everybody’s sharing in our prosperity, everybody wins. The entire economy grows. Fighting for the middle class, whether it’s on tax cuts, on healthcare, on college affordability, those are things not designed to simply penalize rich people, those are designed to create this broad middle class that creates our rich people. That’s what I’m going to be fighting for. Last question, gentlemen.
[Q] Last question is, the logic seems to me, on the environmental side, that you’re going to have to slow walk cap-and-trade, you’re going to have to slow walk because that would naturally raise prices. Electricity prices, as you said in the past — the series of priorities –
[BO] The only way to do it effectively is if you are building effective consumer rebates into the plan. The bulk, the lion’s share of any revenue generated from cap-and-trade has to go right back to the consumer.
[Q] So the payroll tax swap?
[BO] The payroll tax swap is one way of doing it. Just sending a pure energy rebate to folks is another way of doing it. We’ve got to figure out a simple way to do it but the point is, is that we’ve got to cushion consumers from those price hikes and then allow technology to catch up in such a way that whatever retrofitting has to be done pays for itself. I mean, essentially what we should be doing is setting the rules, setting the incentives, pricing pollution accurately, and then letting technology catch up the same way it did with acid rain. And the one thing that we probably will have to do, and this is where the federal government expenditure side comes in, we’ve got to pump a lot of separate players to make the initial investment. We went to this company in Seattle, McKinstry, great little company. Not so little anymore. It started off as a mom-and-pop plumbing and HVAC operation. Somebody at some point in the family figured out you know what, we could really just specialize in making businesses more energy-efficient. They ended up working this niche. They now have several thousand employees. They’ve got welders on-site who are making $80-90,000 union wages with full benefits. They’ve got engineers, all computerized designing completely remaking school buildings, hospitals, etc. This has been voted like one of the best companies to work for in Seattle. They’ve got a full-court basketball and weight room where everybody goes out during lunch and plays. Great cafeteria. I mean, it’s an ideal model, but here’s the point. I asked them, I said what are your average customers saving. And their customers are saving 20-30% on their energy bills so they’re recouping their cost potentially in 5 years time but in the current economic environment, a lot of great potential customers of McKinstry aren’t going to do it unless they get some strong incentives from the federal government. That’s where the federal government comes in. We’ve got to do [inaudible] but we’ve also got to help folks who knows this is the right thing to do, do it. It’s the same thing with — there are tons of people right now who want to buy hybrids. There’s a huge market for it. But good luck getting a car loan to trade in your SUV for a hybrid. We’ve got to give some folks some incentive so they can start making the right decisions.