This is a rush transcript from "Hannity & Colmes," September 10, 2008. This copy may not be in its final form and may be updated.

ALAN COLMES, CO-HOST: With the U.S. economy in turmoil, many experts believe this election will come down to voters' pocketbooks. To appeal to these voters, Barack Obama has campaigned on a promise of change. At least one expert thinks that the change he's promising may not be enough in his new book, "Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency."

Author Robert Kuttner argues that it's going to take more than just charisma to lead this country out of crisis. Joining us now to talk about this, Robert Kuttner.

Thanks for being here.

ROBERT KUTTNER, AUTHOR, "OBAMA'S CHALLENGE": Thanks for having me.

Video: Watch Sean and Alan's interview with Robert Kuttner

COLMES: This idea of change obviously is — it can't just be a word. It's got to have stuff behind it. In this book, you go into what is behind it and does he have the goods to back up the rhetoric?

KUTTNER: Yes. I think, if Obama is elected president, he's going to have to be a transformational president, like Roosevelt was, or the economy is going to fall in on him, because the economy is in such dire straits for most people.

COLMES: I guess the question is are people going to vote on the economy, or are they going to vote on all the stuff we're talking about day after day: who said what, he said, she said, they said.

KUTTNER: Right.

COLMES: Look what this person did. Look how bad this person is, rather than what's really right for the American people.

KUTTNER: That is what is going to decide the election. If people vote on whether Sarah Palin is better at shooting a moose, the Democrats are toast.

And if Obama and Biden can bring the election back to the fact that the Republicans have had their shot at experimenting with letting Wall Street go nuts, and it's really harmed ordinary people, then the election turns on the economy and the Democrats.

So this is a fight about whether the election is about culture or about something...

COLMES: They're really running a narrative. Republicans are running on the life of Sarah Palin...

KUTTNER: Right, right.

COLMES: ... who is she, this soccer mom, who's had a terrific trajectory.

KUTTNER: Right.

COLMES: And, you know, John McCain, war hero. They're running on narrative. And Democrats need to run on issues. That's what you're saying?

KUTTNER: No, I think Democrats need to run on a narrative. And there's a narrative of the ordinary hard-working family just getting the short end of the stick, everything from subprime to health insurance to your pension blowing up to your job not being secure. And that's a narrative that affects ordinary people. If that narrative is persuasive, the Democrats win.

COLMES: So Obama's got to sell that. He's got to close the sale, which is not yet done with the American people. How does he do that?

KUTTNER: Well, he's intermittently closed it. I mean, I think sometimes he tries to be too high minded. He tries to be the guy who bridges differences, who's post-partisan.

SEAN HANNITY, CO-HOST: Stop it. Stop it. This is — this is garbage you're spewing here.

KUTTNER: No name calling yet.

HANNITY: No, it's not name calling. But it's garbage you're spewing.

KUTTNER: He's the guy who's — he's the guy who's trying to be idealistic. And this is a — this is a cutthroat campaign.

HANNITY: He's hiding — he's hiding who he really is. You don't hang out with Pfleger and Ayers and Wright for 20 years and then just say, "I didn't hardly know these guys." If you want to believe that — that garbage, you go right ahead.

You are voting for Obama, by the way. This is a pro-Obama book. You are voting for Obama.

KUTTNER: But I'm not here to do Obama...

HANNITY: Stop it. You — when you say...

KUTTNER: I'm not here to be insulted either. You're doing RNC talking points, Sean.

HANNITY: Excuse me. I don't have RNC — these are Hannity talking points. I write the talking points.

KUTTNER: Right. Yes, yes. Where do you get them from?

HANNITY: Here's what we have. You say — you spew this line, DNC talking points.

KUTTNER: I don't spew any goddamn line.

HANNITY: You said the economy...

KUTTNER: Stop insulting me or I'm walking off the set.

HANNITY: Go ahead. Go. Good-bye. Walk off.

KUTTNER: Are you going to let me have my two minutes?

HANNITY: Please. I don't care. Go right ahead. Walk off. You aid the economy is in dire straits.

KUTTNER: It is in dire straits. You want to deny that, you fool?

HANNITY: You fool, you idiot.

KUTTNER: You're going to deny that the economy is in dire straits?

HANNITY: For the first time — sir, sir, unemployment in this country...

KUTTNER: Sir, sir, my butt.

HANNITY: ... has been lowest than in the last four decades. Economic growth in the last quarter was 3.4 percent.

(CROSSTALK)

KUTTNER: Lower in the last four decades?

HANNITY: Interest rates, inflation have been lower in the Bush years than they've been in the last three decades, and you are trying to convince the people of America that something is...

KUTTNER: Do you get a turn to talk?

HANNITY: Go ahead.

KUTTNER: Well, if you can persuade the American person that the average family is doing great, your guy deserves to win the election. But I don't think the American people are that stupid.

HANNITY: Yes, OK. So you're saying dire straits. You know what? Here's the position you Democrats are in. You've got to convince the American people the surge has failed, the war is lost...

KUTTNER: We're talking about the economy.

HANNITY: Excuse me. We had record unemployment compared to the last four decades, lower than the last four decades average, 3.4 percent gross - - growth, and you're using the term "dire." You've got to convince the American people the economy is in bad shape and the war is lost, and it's all based a lie. That's not true.

KUTTNER: Excuse me, it's based on people's own lives. People's health insurance are going up in smoke. People's pensions are going up in smoke. People's jobs are being exported to China. Unemployment is 6.1 percent and rising. The administration is bailing out Wall Street, because a Republican...

HANNITY: And we got out of the recession that Clinton and Gore gave us. And we got out of the negative impact on the economy on 9/11. Now we have made...

KUTTNER: If you think the economy is great, you campaign on that.

HANNITY: And Barack Obama wants to spend $1 trillion on new spending. A trillion dollars in new government spending on nationalized health care. Is that good for the economy?

KUTTNER: We probably need more than that. You talk...

HANNITY: Really?

KUTTNER: Yes. You talk about the average person about their insincerity of health care.

HANNITY: So you want the government to take care of all our problems?

KUTTNER: Well, the secretary in the treasury, Mr. Paulson, apparently does when it comes to bailing out Wall Street.

HANNITY: The same government that bankrupted Social Security? The same government that bankrupted Medicare? It's going bankrupt.

KUTTNER: Social Security is in much better shape than Citigroup or Morgan Stanley or — if most of the banks on Wall Street were in as good a shape as Social Security, this country would be in great shape.

HANNITY: You're dreaming.

KUTTNER: The election is going to turn on whether pocketbook issues...

(CROSSTALK)

HANNITY: That I agree with. We also need to drill, and he's wrong on that.

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