Q: How does Sen. Obama compare to Sen. McCain on economics?

A: Well, it’s really breathtaking how stark the contrast is. Sen. Obama is without a doubt the most liberal Democratic nominee for the White House since George McGovern in 1972, but probably going back even before that. He’s promised us massive tax increases. He’s promised us a reversal of a pro-trade position that our government has taken for years, including under Bill Clinton. He’s promising massive new spending. He advocates all kinds of new government regulations and control over the economy. I’ll give him credit for being very clear about where he wants to go -- it’s a collectivist, redistribution, government-control-of the-economy economic model, which of course has proven to be a spectacular failure everywhere it’s been implemented. So naturally we’re pretty frightened about what kind of economic policy we’d get if Barack Obama became president.

Q: Is there any great book or economic work that you wish Sen. Obama would read that would set him on the right path?

A: Yes, there would be many. I would suggest that he could start with Adam Smith, because Adam Smith sort of explained the fundamentals of free markets and how and why they work. That’s a concept that Barack Obama clearly doesn’t grasp. He could also go with more contemporary works, such as Hayek’s “The Road to Serfdom” or Milton Friedman’s “Free to Choose” -- anything by Friedman would be great.

Q: It always kind of disappointing when someone as educated as Obama, and people like him, don’t have a much of clue about where Adam Smith and Milton Friedman are coming from, much less guys like Hayek.

A: It is. A number of them actually are reasonably familiar and conversant with the work of these guys, but they reject it because for them redistributing wealth and redesigning society in the image that they approve of is more important to them than overall prosperity.

Q: In general, is the Club pleased or disappointed by the Bush administration’s economic and tax policies of the last eight years?

A: It’s been mixed. The truth is it’s been very mixed. The Bush administration deserves great credit for their tax policy. The tax cuts were not only substantial in magnitude, but they were very constructive in the types of tax cuts -- lowering the taxes on capital gains and dividends, lowering all marginal income tax rates. Those were very, very conducive to strong economic growth. On trade, the president has generally been an advocate for expanding trade and that has been very constructive. On spending, however, we’re very disappointed that the president chose never to veto a Republican spending bill, many of which richly deserved to be vetoed. We were very disappointed that he chose to create a big new entitlement program within Medicare, which he did. He put up a good fight on the farm bill and deserves credit for that, but wasn’t able to win that fight. It’s a mixed record, unfortunately.

Q: In the long run, which direction is the country headed in and is it the right or wrong one?

A: I think in the long run we are very much headed in the right direction. I’m very optimistic about the future. Winston Churchill probably had it right when he said “America always does the right thing -- after exhausting every other possible option.” So we’ll make our mistakes along the way.

But I look at some of the huge victories of the free-market conservative movement: Barack Obama, for instance, believes that it is necessary for him to tell the American people that he’s an advocate for a big tax cut. It’s not true; he’s an advocate for a huge tax increase. But the fact that he has to pretend he’s for lower taxes is really a huge victory in a way for us. Even in his wildest dream, he is not advocating going back to the marginal tax rates that we had under Jimmy Carter, for instance. Nor is he advocating huge regulation of the type that we had in the 1970s.

So as much damage as he would do, we’re still in much better shape than we were in the 1970s. I don’t see us going back to that. And I think that since free markets work, and free enterprise works, even if we do lose some ground and backslide, people will figure out what the cause was and will demand the kinds of reforms that Reagan gave us. So long run, I think we’re going to move in the right direction.