Q: I have to read you Paul Krugman's column today in the New York Times: "So the G.O.P. has found its issue for 2008. The next three months, the party plans to keep chanting: "Drill here! Drill now! Drill here! Drill now! Four legs good, two legs bad!'" and then he admits he added the last part. Your response?

Holtz-Eakin: Well, it's been a long time since Paul Krugman was viewed as an impartial arbiter of the issues, so I think you have to take it with a grain of salt. The most important thing is that John McCain has a comprehensive energy policy. It stretches from the electricity grid up to domestic production of oil and natural gas, drilling on the outer continental shelf -- those are really important issues as a whole. Senator [Barack] Obama insists on leaving out oil, leaving out natural gas, leaving out nuclear power and leaving out coal-fired power plants. So it begs the question, how will this economy grow and meet its needs under a Barack Obama energy policy?

Q: And? What do you think the worst thing about their policy is?

Holtz-Eakin: The worst thing about their energy policy is that it guarantees high prices for Americans -- Senator Obama said that was fine with him -- and it guarantees struggling growth at a time when a job is the most important thing.

Q: But even the Department of Energy, the experts there are saying, I'm quoting Paul Krugman here, "It would take years before offshore drilling would yield any oil at all."

Holtz-Eakin: We've gone through and discussed with the various experts in the area. The folks in the Department of Energy say it will take three and a half years if we start beginning next year. There's no reason to wait. We should start right now, and if we could get a firm commitment to expanded supply of oil on the market three and a half years from now, that would change spot market prices three and half years from now, that would change futures prices today and that would translate into pressure on prices instantaneously. You know, Mr. Krugman's a good economist; he can go back and read his finance text.

Q: Oh, I wouldn't want to fight with two economists, that's for sure.

[Laughter]

Q: But you know, the political problem is, as you well know even though you're an economist, the problem is when you say that to an audience--when John McCain stands in front of an audience, he's at the Iowa State Fair today, right? And who is he with, the Big Boar?

[Laughter]

Holtz-Eakin: Yes, the Big Boar. Named "Big Red," I believe.

Q: He stands there and he says, "In three and a half years, you will be doing so much better!" Right? That doesn't work, does it?

Holtz-Eakin: No, the key fact is it will help now in putting pressure on prices, and it's important to help as quickly as possible. More importantly, given that dependence on imported oil has produced national security threats, look at what is going on today with Russia and Georgia, the importance of getting off imported oil. That region is unstable, the pipeline going through Georgia is crucial for supplies in Europe and once again, we're in a situation where the supply lines for oil represent a national security threat, they represent an economic security threat and they're damaging the environment. John McCain's project is about addressing that unhealthy, strategic dependence on oil, and it's comprehensive.

Q: So if there is this war in Georgia, how do you explain again to those people at the Iowa State Fair today, how do you make them understand and vote for these policies and how it trickles down to them? Because it seems kind of complicated.

Holtz-Eakin: Do you want to continue to be in the situation where events in far off places like Russia and Georgia will dictate what your monthly budget will be? Or do you want to begin to take the steps that will free America from a dangerous dependence on imported oil, that will move us to cleaner energy supplies and which will allow you to meet your bills?

Q: Doug, you should be writing the ads.

[Laughter]

Holtz-Eakin: I don't think so.

Q: No, but I'm serious. I mean, I would just say looking at the politics of all this, when I hear both candidates talk, I'm not just talking about John McCain, that that sort of plain spoken language about the economy would advance the cause because that's what people want to know--what is going to change? How will my life be changed today? How will it change in a year? And by the way, let's talk about the car industry because so many jobs are being lost, it's in the hundreds of thousands. What will McCain do--if he wins, what's he going to do to help all of those folks?

Holtz-Eakin: He's already said that he will make the commitment to ensure that we can have batteries that are of commercial quality, you can drive as far as you want. They're 30 percent of the cost of what they are today, 70 percent cheaper. He'll offer $300 million prize for that kind of battery -- you could then put that into every hybrid, every electrical car, you can build nuclear power plants, we can drive for 3 cents a mile instead of 22 cents a mile and Detroit can make all those cars. And that would be a great thing for America because we'd be free of the dependence on oil, it would be a great thing for Detroit, we would be way ahead of the curve, we could sell them around the globe.

Q: Now I had T. Boone Pickens on the show two weeks ago and I asked him if he called Senator McCain to get his support, and they have spoken. What do you think about the Pickens Plan for energy?

Holtz-Eakin: Well the Pickens Plan fits nicely within Senator McCain's Lexington Project which has, as I said, a broad commitment to renewables. Pickens is heavily focusing on wind, but Senator McCain would include solar, biomass and all the other renewables in there. He focuses on using natural gas to drive automobiles. Senator McCain says fine, if you could drive something cleaner than what we drive right now, get a $5,000 tax credit for a clean car. So everything that Boone Pickens is talking about fits nicely within the Senator's vision.

Q: Then why doesn't he step in and do something with Senator McCain directly? Because he said he's not going to.

Holtz-Eakin: Well, you'll have to ask Boone Pickens why he's choosing the route he's choosing. We've certainly exchanged information with him and we're looking at his plan and I hope he's looking at ours.

Q: So this fall the presidential debates hit. It doesn't look as if Obama will meet the challenge that you guys have put out to do these multiple town meetings with what's left of the summer. So how, if I can, can you take us into the process of how you prep a presidential candidate for a debate? Have you done it before?

Holtz-Eakin: We certainly prepped him for the primary debates. This will be the first time I personally will be involved in a general election debate, but we have a candidate who requires relatively little preparation. He knows the issues, he's experiencing the issues, he stands in front of people every day and explains his position, says it the same way every day. So what we try to do is provide him background material about the numbers, the facts, so he can, you know, be conversant with them. We review for him the positions that Senator Obama has taken and try to update them daily as they switch. And then we'll turn him loose. He's the best retail politician on the planet.

Q: So are you going to play Senator Obama?

Holtz-Eakin: I am not nearly, nearly the celebrity of Senator Obama, and I couldn't possibly play him, even in rehearsal.

Q: We're going to play your new celebrity ad today on the show. Thank you for being with us.