Transcript: Gibson Interviews Barack Obama

Oct. 8, 2008— -- The following is an excerpted transcript of ABC News' Charles Gibson's exclusive interview with Sen. Barack Obama on the second presidential debate, the economy and other issues important to voters, for "World News With Charles Gibson" in Indianapolis on Oct. 8, 2008.

GIBSON: Senator, we're undergoing a global market meltdown, and we -- the basic firmament on which our economy is based has undergone a seismic shock for the last few days and yet last night, you guys had a debate about spending and tax policy and earmarks that you could have had three months ago. That's frustrating to people.

OBAMA: It was. It was frustrating to me. Part of it's the format. Look, you've got two minutes to respond to a financial crisis. And so, you know, if we had had more time, I think we could have had a better debate about what's happening right now.

I do think that we don't have the regulatory infrastructure, either domestically or globally, to deal with global capital markets. We have a 20th century system, and we've got a 21st century market. So there are going to be a couple of things that we're going to have to do. First of all, I was glad to see that we finally had some coordination between what the United States was doing, European countries, other central banks were doing. Because of the way capital now flows, there's got to be better coordination.

Number two, I was glad to see that Secretary Bernanke has decided to -- or that Chairman Bernanke has decided to go ahead and try to boost up the commercial paper markets. The average person may not, you know, think about commercial paper as underpinning the economy, but if major companies can't get, you know, short-term loans to make payroll or buy inventory, then you could see bankruptcy of huge companies all across the country. So those are some sort-term measures, but long term, we're going to have to revamp how our regulatory system works and then we're going to have to get fundamentals of the economy in ways that we just haven't taken care of for the last eight years.

GIBSON: But we have to deal with the tools that we have now with this.

OBAMA: Right.

GIBSON: We've talked to a lot of people as we've traveled around the Midwest. One woman in Dayton said to me, if either one of these guys could tell me succinctly, simply, how they're going to get us out of this mess, that guy would win. It's still to be won. And she said neither has, and it seems as if neither can.

OBAMA: Well, I -- you know, let me tell you. I can give you a succinct summary of what I intend to do. And I think that it will get us out of trouble, but it's going to take some time. Number one, we've got to make sure that this rescue plan works the way it's supposed to work; which means strong oversight. It means that the secretary of the treasury is treating the taxpayer money that we're putting up like we are investors so that, you know, when we buy up assets, we're making sure that we're going to be in a position to sell them back later and get our money back, that we are thinking about homeowners not just about Wall Street banks in terms of needing help.

And then what we've got to do is to deal with a fundamental imbalance in our economy. Part of the problem here is that the average person has seen their wages and their incomes going down. And they were relying on the hope that their home prices would continually go up. So that was the asset that was going to help fund college, help fund retirement. And that was unrealistic. So we've got to go back to basics, which is if you're going to be able to send your kids to college or retire, you've got to be earning enough money to save. And that's why it's so important that we get people back to work. That's why it's so important that we develop an energy strategy that works. That's why we've got to fix our health care system because that's the real looming nightmare out there when it comes to our budget deficits and our national debt. And that's why we've got to have an education system that works.