This is a rush transcript from "America's News HQ," December 15, 2008. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, HOST: And here now with me is the former economic adviser to President Ronald Reagan, Arthur Laffer.

Arthur, always good to talk to you. Welcome.

I should mention that he's also the author of the book that you are seeing here, "The End of Prosperity."

Good evening, Arthur. Thanks for being here tonight.

ARTHUR LAFFER, FORMER REAGAN ECONOMIC ADVISER: Thanks. It's my pleasure. Thank you for having me.

Video: Watch Martha MacCallum's interview

MACCALLUM: You know, one of the things that — that was really the first question. It was the first question that Barack Obama fielded was the question about offshore drilling, which was something that we talked a little bit about during the campaign or a lot about, I should say, during the campaign and it was something that Barack Obama said he would consider. But his answer alluded to the fact that he is open to considering it still, but he wants it to be part, if at all, of a larger package of a lot of projects that would hopefully help make us more energy independent.

What do you think about that and the finances of everything he talked about?

LAFFER: Well, let me just say that he is a very well-intentioned man. I mean, he speaks well. He's clearly focused on America, and his appointments are high quality people. But when you talk about specifics like offshore drilling, obviously, if you want energy independence and yet have a prosperous America, you should allow offshore drilling with the proper precautions, naturally, making sure it doesn't damage the environment.

And where does he mention something about nuclear power? I mean, if you really want something that's great for energy in America and good for the environment, nuclear power is critical to all of that.

And then he goes on and he talks about, you know, energy independence. I can't think of anything more silly in economics than having independence in production and jobs and products.

I mean, the Arab world has all the oil and we know how to use it really well. It would be silly and extreme that we don't use Arab oil for use here. We're really good at it.

And if we have a political problem with these countries, use political solutions, not economic solutions. And looking at all of this as well — if we were to achieve energy independence, do you know how cheap oil would be in the rest of the world? Who is going to control India and China from really polluting the environment? The U.S. is much better using energy than any of these countries —

MACCALLUM: Before I let you go, I just want to get one more thought on that in half a minute or so.

LAFFER: Sure.

MACCALLUM: A lot of people feel that if we are energy independent, that it will sort of change the dynamics in terms of our security at home, that if we do not need to rely on Middle East oil, then it will make us safer and more secure because we do not need it. We don't need them.

LAFFER: No, every protection has always argued that way. That is how we get into World War II as well. It's this protectionist-isolationist America. It does not make any sense to be honest with you. We should solve a political problem with a political answer. It is just silly.

MACCALLUM: All right. Intriguing. Arthur Laffer, always good to talk to you. Thank you very much.

LAFFER: Thank you. My pleasure.

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