What are the challenges, whether it’s Barack Obama or John McCain. Like last night, two special guests to tell us what India should be hoping for, but just before I introduce the two guests, just to tell you what are we looking at on the show today. What will be the new presidents economic formula to rescue the US from recession. It’s already a fact now and how we will move ahead from here. Also will Barack Obama be a bit more protectionist, that’s the big fear for India. Will John McCain be more in favour of open trade? As someone said, elect Barack Obama but let him follow John McCain’s economic policies. Just to introduce our special panel. Tonight we have two special guests, both from the United States of America. One of them, ambassador Richard Burt, a key advisor to the John McCain campaign, and he has served as a former ambassador of the US to Germany. Also along with him is his direct opponent, Nelson Cunningham, advisor to the Barack Obama campaign and he’s here to tell us his views. Thank you gentlemen for joining us right here on NDTV Profit.

All right, let’s set the ball rolling. The perspective that we’re looking at:

How does Barack Obama differentiate his campaign from John McCain’s and this whole thing about rescuing America from recession?

How are the two candidates different in their approach? That’s the first key question.

Also will Obama as the president, as the various debates are showing, bring in tighter regulations whether it’s executive pay or financial sector?

Also under both the regimes, either John McCain or Barack Obama, will there be a big crackdown on greed?

Ambassador Burt, let me first ask you, since you have helped John McCain in the past. There is so much that the new president will have to address when it comes to the global crisis. What according to you is John McCain’s big idea to solve the crisis? What’s on top of the agenda, if and when he comes to power? 

Richard Burt: First of all the current administration does not have a strong record in controlling spending. In fact in many respects I think the Bush administration has acted more like a democratic administration in controlling spending and I know John McCain as president would want to exercise much more physical discipline. Also I think philosophically McCain is much more comfortable with the idea of more regulation of the financial sector than the Bush administration so I think there will be a real effort by the McCain administration to try to reign in some of the aggressive impulses of the US financial community which to some extent has created some of the current problems we are seeing.

NDTV: Nelson Cunningham so if John McCain sounds a bit out of sorts on economy because you all have the best advisors, it’s not as if Barack Obama has any magic wand to solve the problems, despite having advisors, as I said, like Warren Buffet. 

Nelson Cunningham: Well, no one has a magic wand. But the democrats have historically been the party that believed of course that business is important and commercial interests are important, but the regulating hand of government is important to ensure the proper and efficient functioning of business. So Barack Obama comes to this economic crisis with three terrific advantages. The first is, the voters in America have a memory that goes back as far as the depression and Franklin Roosevelt, that in tough times it’s good to have a democrat in the White House. Second he comes with a sterling set of advisors, former secretary of treasury Robert Rubin, Larry Summers, former chairman of the federal reserves, Paul Volcker, Warren Buffet, the world’s most famous investor and third Obama comes with a message that the voters want to hear, the message that says that the government is here to protect voters, to regulate business and to take care of those that are beaten down by economic cycles, that’s what the voters want to hear and that’s why in the last three weeks this race has really opened up in Obama’s favour.

NDTV: Ambassador Burt, in the light of what’s going on, in your camp is there a rethink about this entire changing financial order , is there a view that maybe this is the end of free markets and is it time that we need a complete revamp of the free market economic failure as we’ve seen that US is already backing various private sector companies.

Richard Burt: I think to begin with, we are certainly not witnessing the end of capitalism. I don’t think that either republics or democrats in the United States believe that we need to begin investigating entirely new ways of rearranging our economies. I think we saw the end of communism when the cold war came to an end and there is certainly no consensus in the United States even during the crisis to adopt a system of socialism. I think that in the United States and I think in most other countries there is an understanding that the best way to create a strong robust economic growth, to create a strong viable middle classes in particularly the new emerging markets is to let markets work but at the same time curb excesses that can lead to these financial bubbles that we’ve been so concerned about in the last few months.

NDTV: How about the democrats Mr. Cunningham. Do you think any differently? Do you now look back and say yes maybe there was a premium on greed and maybe a bit too much premium for which the US is suffering. Is Barack Obama going to look at this in a different manner?

Nelson Cunningham: Well the Bush policies of the last eight years have clearly done more to make the upper class wealthy and to leave behind the lower classes. Income inequality has increased in the United States. President Bush arrived with a policy that said we should cut taxes for the rich and then eventually the benefits will trickle down to those lower down in the economic scale. We have not invested in the things that America needs to invest in to stay competitive we have not invested in education, we’ve not invested in infrastructure, we’ve not invested in the technologies that we need in our workers. We need to get back to a tax system that is more progressive, that is more fair and we need to spend money in ways that are more productive, infrastructure, education, worker retraining to keep America as competitive as possible.

NDTV: Alright let me come to a big topic which is close to the heart of Indian IT companies. India’s outsourcing story getting threatened under Barack Obama - that’s the criticism of the democrats right now. One question, which is being raised, is, if Obama wins, is he more likely to turn into a protectionist? That’s the big question. If he does, the Indian IT companies will suffer. He’s already against federal outsourcing of various works. Also, Obama could crackdown on H1B visas. So there are serious worries if Obama comes and implements certain protectionist populous measures. Nelson Cunningham, let me ask you. Your camp has not been in outright favour of outsourcing as far as India’s concerned. Richard Durbin had sent letters to IT companies. You guys are very touchy about jobs being lost in the US. So if US is going through a recession, there would be pressure to protect jobs and that would hurt India. How will Obama handle the situation on the ground?

Nelson Cunningham: Well it’s the job of every government to create jobs in their economy and to try to create economic conditions that are as robust for their workers and their citizens as possible. That’s only natural. Senator Obama has said this about globalization and about outsourcing; he has said outsourcing is inevitable. Technology, communications will lead to jobs going where the jobs can be handled most efficiently and most competently. He said we cannot put up walls and barriers against that. But there are two things he has said further. First of all we have a tax structure in the United States that actually encourages companies to close jobs in Washington, to close plants in the United States and to ship those jobs overseas. That’s wrong. We should not have a tax structure that encourages companies to send jobs overseas. We should make the tax laws neutral and let businessmen decide where they can most efficiently and productively do their work. Obama wants to change that tax flaw but he recognizes that United States cannot put walls up and has said that very clearly.

NDTV: But Nelson Cunningham, don’t you think American companies have faired better by adopting outsourcing to overseas companies? Look at the wealth creation for the American manufacturing, retail everyone, by cost cutting.

Nelson Cunningham: I think there are great efficiencies that can be obtained by outsourcing. The American economy isn’t weakened by the fact that we’re able to draw under considerable resources that India offers in terms of human capital. In fact, we’re strengthened by our ability to do that. Senator Obama would not shut that off. He does want to change the tax law that encourages US companies to rely on foreign jobs rather than American jobs. Make it neutral, let businessmen decide.

NDTV: Ambassador Burt you are in favour of what India has benefitted in terms of outsourcing as our great friends form the republican side but you too may have no choice but to adopt a bit more protectionist stand because American jobs getting lost thanks to the Indian companies. You cannot go there and say yes we support outsourcing openly.

Richard Burt: John McCain has very clearly said on the record that he supports free trade, no if ands’and buts’ about it. He supports US investments in foreign markets and he would try and sustain the record of both the Clinton and the Bush administration in strengthening our relations, US economic ties and investment in India.

NDTV: The touchy issue of trade. Multi lateral, bilateral, of course US and India are great trading partners but at the forum of World Trade Organization things have not gone really too well. So the focus right now is on trade tactics. McCain is known to be more favourable towards India on trade because he believes in free trade and not on subsidies or any kind of anti dumping duties. Obama’s stand on subsidies could go against India. Let me go back to our two special guests. Ambassador Richard Burt, you are the Republican in the scheme of things. Looks like subsidies are a key issue for bilateral or even multi lateral trade in agriculture. And America’s record in cutting farm subsidies has been not so great in the past. There have been bills on which McCain has supported some of the farm subsidies. How do you plan to resolve the issue with India? 

Richard Burt: Well I’ll make two points about that. One, for every country not simply the United States, agriculture is a very sensitive subject in trade relations and it’s very understandable because farmers are special protected interest groups in nearly every country in the world. They are very powerful lobby in the United States, in Europe and as you know here in India so it’s difficult to change agricultural trade patterns. But secondly I don’t agree with your assessment. In fact I think earlier this year, both the United States and the European Union went a great distance to reduce substantially subsidies paid to farmers in order to make progress in Doha around and unfortunately several important emerging markets including India rejected those very important concessions that were made and the whole history of trade negotiations I think underscores that trade is not a zero sum game. It is in everybody’s interest. It’s a win-win proposition and I am hopeful that under a McCain administration which strongly supports more rather than less free trade that we can get those negotiations back on track and that both big emerging markets like India as well as the more mature economies in North America and in Europe will be able to make the necessary adjustments in concessions on agriculture to move the Doha talks forward.

NDTV: Nelson it is difficult to get Obama’s past record on subsidies. The question is if Obama wins we still have a huge farm lobby that you have to cater to and that brings us back to the stale mate between India and the US at WTO.

Nelson Cunningham: Let me just add I agree very much with what my colleague Richard Burt just said. I think he set the context perfectly. I do want to say, Senator Obama’s someone who has roots in Africa, he lived as a child in Indonesia, he knows how America looks to the rest of the world. He’s very conscious of America’s role in the world that has rising powers everywhere. He voted for the civil nuclear deal, as did Senator McCain. He understands that globalization is of course that we will all be contending with and have to turn productively to our interest. And he’s a believer in the need for a good and strong strategic relationship with India.

NDTV: On the Nuclear deal of course, the question we are asking is Obama and McCain are pretty much on similar grounds. They pledge greater nuclear trade with India and any change is unlikely under the new administration. Richard Burt, do you think that John McCain will be a big proponent of pushing through civilian exchange of technology, thereby helping not just American companies but Indian companies as well? 

Richard Burt: Well I think so because I believe that as important as the civil nuclear agreement is, it is really only the first step of building an overall strategic relationship between the United States and India. You know India is not a less developed power any longer. Just today as we talk about this issue, India launched a satellite, which will orbit and monitor the moon. India is a world-class technology power and thus it is a potential partner for the United States, in the civilian area but I think in other areas as well and I think we need to think down the road strategically about where this relationship will go and I would like to see the relationship develop not only in terms of civilian nuclear capabilities but I would like to see the relationship develop for instance in terms of conventional military capabilities. I would like to see the United States and the Indian Armed forces co-operating more closely. We share many common interests in this region, in terms of combating Islamic terrorism, in terms of maintaining a stable balance of power in all of Asia and so I think this is just the first chapter of the potentially very important relationship between our two countries and I know John McCain very much supports this and believes in it.

NDTV: Richard Burt is that one reason why the republicans are so against Obama’s big tax proposal on entrepreneurs?

Richard Burt: You know the problem isn’t the notion that Barack Obama wants to tax people more at over  $250,000 a year. The problem is Barack Obama has outlined an agenda for the US government and government spending, which cannot be born by only the people earning over $250,000 a year. I don’t care what Barack Obama says in his speeches while he’s campaigning. The fact of the matter is if we’re going to do all the things, if we’re going to give government all the money that they need to do the things that Barack Obama has promised, everybody in the United States, not just the richer element or percentage but everybody in the United States is going to be paying substantially higher taxes. 

NDTV: Nelson Cunningham, Joe the Plumber is no longer the big famous campaign slogan for Obama after you decided to tax people earning more than $250,000. The question is are you against entrepreneurship or are you against people trying to earn big bucks out of good business models?

Nelson Cunningham: Look, the challenges faced by the next president, who I believe would be Senator Barack Obama, are huge. The last 7-8 years of republican rule under George Bush has left this country underfunded, has left us with an infrastructure that isn’t what it needs to be for a world class economy. It has left us with a financial system in shambles. It’s left us with massive deficits. It’s left us with a tax system that has reduced taxes greatly on the ridge, while leaving taxes essentially flat or just a little lower for ordinary workers who have seen their incomes decline. What the next president needs to do or what Barack Obama will do is first he will invest in the areas in America that need investment- education, infrastructure… not creating jobs but creating the context in which jobs can be created. And to do that he has got to find a way to raise revenues, any president has to find a way to raise revenues and he has proposed raising taxes on the ridge, not outrageously but taking those levels back up to the level where they were under Bill Clinton and frankly the rich did very well, and reducing taxes on those who have less means so that in fact they can go out and have more money to spend on their families. That’s fair, and that combination of policies will help lead our country back to prosperity.

NDTV: I know I have to let you both gentlemen go but the big question I have to ask you. Nelson Cunningham, first to you. How soon do you think Obama will make a trip to India? And how much will it be on his priority agenda if he becomes president?

Nelson Cunningham: Well Barack Obama starts with so many foreign policy challenges that have been left by this president. There are so many places around the world where he needs to go in and repair America’s image and repair America’s relations around the world. India’s strategic relationship is the one that he believes in strongly. He showed that by the support he gave to the civil nuclear agreement and India is clearly a country with which he would want to engage.

NDTV: Well we’ll see. Richard Burt, how about you? Manmohan Singh, India’s prime minister says Indians love George W Bush. Would we get to love John McCain as well?

Richard Burt: I hope you’ll be able to hear that fairly quickly. I don’t disagree with Nelson Cunningham that Barack Obama has supported closer US-India ties. But I think John McCain is someone who’s been a leader in moving the US government into a position of strategic partnership with India. I think he understands not just the economic advantages that come from that partnership but understands that strong ties between the United States and India are part of a structure of peace, globally and in particular in Asia.