This is a rush transcript from "Your World with Neil Cavuto," June 26, 2008. This copy may not be in its final form and may be updated.
ALEXIS GLICK, FOX BUSINESS NETWORK: You know, the cover of The Financial Times this morning, there was an article from the CEO of Procter & Gamble, A.G. Lafley, and one of the things he talked about in this F.T. article is, he said — he made a call out to you and both Senator John McCain that he said, soften the rhetoric right now. There is so much negative rhetoric.
In fact, quoting him, he said: "Look, psychology matters. And we're going to talk ourselves into a recession if we don't do something about it."
How do you respond to that?
• Video: Watch Alexis Glick's interview
SEN. BARACK OBAMA, D-ILL., PRESIDENTIAL CANDIDATE: Well, look, I think, if anybody tracks my campaign, we've had about as positive a presidential campaign as you've seen in maybe a generation. I mean, we have talked about bringing people together, making sure that we don't get in the same ideological battles and ruts that we have been in for the last two decades.
There's no doubt that, sometimes, the testosterone kicks in, and you start getting more combative than you need to. But what was striking about this competitiveness summit that we just had was how much consensus there is right now in the country between labor, between management, between Republicans and Democrats who are outside of Washington about what needs to be done on critical issues like energy and education and health care.
And if we can capture that consensus, set aside for a moment the 10 percent of things we disagree on and focus on the 90 percent of things everybody knows have to be done, then not only do I think that we can rebuild this economy over the long term, but we can also provide some short-term relief to people who are really hurting.
GLICK: Two developments today that I want to get your reaction on. First of all, the Supreme Court decision today, as you know, that struck down the D.C. handgun ban, what's your reaction to that?
OBAMA: Well, you know, I have said consistently that I believe the Second Amendment is an individual right. And that was the essential decision that the Supreme Court came down on. And it also recognized that, even though we have an individual right to bear arms, that — that right can be limited by sensible, reasonable gun laws.
The D.C. law, according to the Supreme Court, went too far. And now the key is going to be, I think, for us to come together and say, people do have an individual right, and there's nothing wrong with common sense gun laws, background checks, keeping guns out of the hands of criminals, those who are mentally ill, and creating what I think is the common sense belief among people that we can both uphold our traditions with respect to firearms and prevent the senseless killings that we see on the streets of so many American cities.
GLICK: President Bush came out earlier this morning talking about, in essence, lifting the sanctions against North Korea. If you were president, you were in that situation, would you deal with it the same way?
OBAMA: Well, I have not yet had a chance to review the declarations that were made by North Korea. And I think it's important for Congress to review it before Congress lifts these sanctions.
But, assuming that North Korea has fully disclosed its plutonium operations, its enriched uranium operations, as well as some of the issues surrounding proliferation that I think are so important, and it follows through on the additional steps that are already outlined in the agreement, then I think it's a positive development.
And it indicates what can be accomplished when we have direct diplomacy even with our adversaries, that the well-structured — as in the words of Ronald Reagan, we have got to trust, but verify.
But this issue of nuclear nonproliferation is so critical. We let it slip away for too long. Now is the time for us to get back together with other countries around the world and make sure that we do not have the kind of proliferation that could fall into the hands of terrorists.
GLICK: You have reinvigorated the electorate. You have had record turnout, record fund-raising dollars.
You know, being the president is one branch of the government, and it's a job for one person. What can you do alone, if you are lucky enough or fortunate enough to become the president of the United States, on your own? What can you get done?
OBAMA: Well, I don't think I can get much done on my own. I don't think any of us can.
You know, let's take the economy as an example. The president can set a vision and set goals for the economy. But it's still the dynamism of the private sector, public-private partnerships, our universities developing the scientists and engineers and entrepreneurs, that unleash the incredible power of the U.S. economy.
So, I do think that, on energy, for example, the president has to set a goal. We're going to end our dependence on foreign oil, and set some very clear matrix in terms of how do we achieve it, put serious money into research and development on solar, wind, biodiesel, clean coal technology, developing ways of storing nuclear waste properly, creating a new electricity grid.
But, ultimately, it's going to be businesses around the country that are taking some of this research and development, implementing it, and creating millions of green jobs that can fuel this economy for generations to come. So, I want a partnership. My job is to convene all of the incredible talent in the United States to make it happen.
GLICK: As we sit here right now, the stock market is getting hit pretty hard, as I'm sure you know. We're trading at levels that we haven't seen since September 2006. Oil is up $3 right now.
One analyst this morning comes out and says $7 gasoline. What do you do to allay people's fears right now, both the consumers and Wall Street, who are really, really feeling the pain?
OBAMA: Well, look, consumer confidence is at an all-time low. Gas prices are at an all-time high. And the housing market still hasn't been stabilized, which is putting a lot of pressure on the Fed then to juice up the economy at the same time as it's trying to deal with inflation.
The Fed needs help from Congress and a president. I think that a good place to start is the housing market. If we can get a bill that's working its way through Congress passed right now that will get borrowers and lenders together to try to keep people in their homes and curb foreclosures, at least solidify housing prices, that will go a long way to restoring not only confidence in the credit markets, but also consumer confidence.
Having a serious energy plan and looking at the possible speculation in the oil futures markets could have a difference at least in alleviating some of the upward pressure on oil prices.
And if we do those two things — and I believe we need a second stimulus package, another round of rebates, as well as a permanent $1,000 tax cut for individuals and families that are out there working hard and trying to absorb these rising costs — then I think that we can get the economy back on the right track.
GLICK: Perfect segue to my next question for you. You know, in 1993, when, at the time, President Bill Clinton was running, he talked about a middle-class tax cut. You know, it was the main topic of conversation before he took office.
GLICK: When he went and had to do that State of the Union Address, he had to talk about the budget deficit and what to do about the budget deficit. And we wound up with the largest hikes in U.S. history. How do we avoid history from repeating itself, particularly given where the economy is right now?
OBAMA: Well, look, the situation is a little bit different.
I mean, back in 1991-'92, the recession had already bottomed out and we were on an upward tick. I think we have got a much more serious problem now than we did then. It's not an unsolvable one, but what we have to do, I think, is to continue to give consumers some confidence and help them transition with these extraordinary rising prices on the energy front, as well as food.
So, we're going to still need some stimulus. And that's why I think my plan is the right one. Deficit reduction is still important. Keep in mind that the reason we're in such a big hole, and we don't have much of a cushion, is because we have been spending $10 - $12 billion a month in Iraq.
And it's important, I think, to bring that war to a close in a responsible, careful way. That will provide some relief.
I will say — and I have always tried to be honest with this — 95 percent of Americans will see a tax cut under my tax plan. It is true that those like myself, who are in the top 5 percent, we're going to see a tax increase. I'm going to roll the Bush tax cuts back to the levels they were in the 1990s. And just remember that rich people were doing pretty good back then, too.
But that will also help us relieve some pressure on the deficit.
GLICK: Senator, I want to have a little fun with you, if you don't mind, because you like to have some fun.
We do something on our show about word association.