Person Of The Year 2008

On Friday, Dec. 5, the President-elect sat down with TIME managing editor Richard Stengel, editor-at-large David Von Drehle and Time Inc. editor-in-chief John Huey in Obama's spartan transition offices in Chicago to discuss his plans for the coming months, the improbability of his victory and how he's fighting to stay in touch with the real world from inside the presidential bubble. Excerpts from their conversation:

What kind of mandate do you have?
Well, I think we won a decisive victory. Forty-seven percent of the American people still voted for John McCain. And so I don't think that Americans want hubris from their next President. I do think we received a strong mandate for change ... It means a government that is not ideologically driven. It means a government that is competent. It means a government, most importantly, that is focused day in, day out on the needs and struggles, the hopes and dreams, of ordinary people. And I think there is a strong mandate for Washington as a whole to be responsive to ordinary Americans in a way that it has not been for quite some time.

When voters look at your Administration two years from now, in the off-year election, how will they know whether you're succeeding?
I think there are a couple of benchmarks we've set for ourselves during the course of this campaign. On [domestic] policy, have we helped this economy recover from what is the worst financial crisis since the Great Depression? Have we instituted financial regulations and rules of the road that assure this kind of crisis doesn't occur again? Have we created jobs that pay well and allow families to support themselves? Have we made significant progress on reducing the cost of health care and expanding coverage? Have we begun what will probably be a decade-long project to shift America to a new energy economy? Have we begun what may be an even longer project of revitalizing our public-school systems so we can compete in the 21st century? That's on the domestic front.
On foreign policy, have we closed down Guantánamo in a responsible way, put a clear end to torture and restored a balance between the demands of our security and our Constitution? Have we rebuilt alliances around the world effectively? Have I drawn down U.S. troops out of Iraq, and have we strengthened our approach in Afghanistan — not just militarily but also diplomatically and in terms of development? And have we been able to reinvigorate international institutions to deal with transnational threats, like climate change, that we can't solve on our own?
And outside of specific policy measures, two years from now, I want the American people to be able to say, "Government's not perfect; there are some things Obama does that get on my nerves. But you know what? I feel like the government's working for me. I feel like it's accountable. I feel like it's transparent. I feel that I am well informed about what government actions are being taken. I feel that this is a President and an Administration that admits when it makes mistakes and adapts itself to new information, that believes in making decisions based on facts and on science as opposed to what is politically expedient." Those are some of the intangibles that I hope people two years from now can claim.

When you look at the economic issues that you ran on in the campaign, does [all the bad financial news] change your priorities about how quickly you've got to act on, say, jobs vs. energy?
Fortunately, most of the proposals that we made apply not only to our long-term economic growth but also fit well into what we need to do short term to get the economy back on track. I have talked during the campaign about the need to rebuild our infrastructure, and that obviously gives us an opportunity to create jobs and drive demand at a time when the economy desperately needs jobs and demand. I've talked about a tax cut for 95% of working families, and that fits into a stimulus package, and we can get that money out into people's pockets fairly quickly. I've talked about the need for us to contain health-care costs, and it turns out there's some spending that has to be done on information technology, for example, that we can do fairly swiftly. So there's no doubt that most of the priorities that I had are ones that will serve our short-term economic needs as well as our long-term economic needs.
The drop in oil prices, I do think, makes the conversation about energy more difficult, not less necessary. More than ever, I think, a wholesale investment in transforming our economy — from retrofitting buildings so that they're energy-efficient to changing our transportation patterns and thinking about how to rebuild our electricity grid — those are all things that we're going to need now more than ever. But with people not paying $4 a gallon for gas, it means it drops on their priority list. And that makes the politics of it tougher than it might have been six months ago.
So how long and how deep a recession should the American public be ready for?
I don't have a crystal ball, and economists are all over the map on this. I think we should anticipate that 2009 is going to be a tough year. And if we make some good choices, I'm confident that we can limit some of the damage in 2009 and that in 2010 we can start seeing an upward trajectory on the economy. But this is a difficult hole that we've dug ourselves into. You know, Japan found itself in a somewhat similar situation in the '90s, made some poor decisions, didn't squarely face some of the problems in its banking system and, despite significant stimulus, still saw this thing drag on for almost a decade. On the other hand, you've got countries like Sweden that went through this and acted forcefully and boldly and in two years were back on track and were growing at a really healthy clip. So the decisions we make are going to have an impact on it. But next year's going to be tough.

You made a very bold choice for Secretary of State. If she were sitting here with you now and you were to say, "Madame Secretary, here are the three stops I want you to make on your itinerary once you get in the job," what would those three places be?
Well, since we're literally having that conversation, I think, a day or two after this publication comes out, I'm not going to have her read it in TIME magazine. But I mentioned to you earlier some of our key priorities. There's no doubt that managing the transition in Iraq is going to be a top priority. Managing a more effective strategy in Afghanistan will be a top priority. Recognizing that it is not simply an Afghanistan problem but it's an Afghanistan-Pakistan-India-Kashmir-Iran problem is going to be a priority. Sorting through our policy with respect to Iran effectively — that will be a priority. Dealing with our transatlantic alliance in a more constructive way and trying to build a more effective relationship with the newly assertive and, I believe, inappropriately aggressive Russia, when it comes to the invasion of Georgia — that is going to be a priority. And seeing if we can build on some of the progress, at least in conversation, that's been made around the Israeli-Palestinian conflict will be a priority.
Now, I mention those things, but keep in mind that some of the long-term priorities I identified in the campaign remain just as urgent today. I already mentioned nuclear proliferation. I already mentioned climate change. I think dealing with development and poverty around the world is going to be a critical component of our foreign policy. It's good for our security and not just charity. And so, part of the goal that Senator [Hillary] Clinton and I both share — as do [Defense] Secretary [Robert] Gates and [National Security Adviser nominee] General [James] Jones — is moving our foreign-assistance agenda to the center of our national-security conversations as opposed to the periphery. Paying more attention to Latin America. You know, we have neglected our neighbors in our own hemisphere, and there is an enormous potential for us to work with other countries — Brazil, for example, which is in some ways ahead of us on energy strategies. That, I think, would be very important. And finally, managing our relationship with China and the entire Pacific Rim, I think, is something that will keep not just me busy but my successor busy.

Was there ever a point in the election when you thought you were going to lose?
Sure. When was it?
Well, let me say it this way: There were multiple points throughout the election when I thought I could lose. Including the day I announced. And honestly, you know, we had a bunch of ups and downs in the campaign. I'll tell you what, though: the way Michelle and I talked about it before we made the decision to get in this race was, if we run the kind of race that I wanted to run, if we were engaging people and exciting people and bringing new people into the process, if I was speaking honestly and truthfully about what I thought my priorities were, then I always thought we had a good chance of winning. And if we lost, that wouldn't be such a terrible thing. And that's why I think I stayed pretty steady throughout this race, despite the ups and downs.
There weren't that many occasions during this campaign — there were a few, but not that many — where I wasn't proud of what we were doing or felt somehow that I was making compromises of my core principles. Michelle and I pledged that whatever happened, we'd come out of this thing whole. And there wasn't any point in this campaign where I thought we were in danger of losing who we were.

What's the best piece of advice that you've gotten from someone about being President, about how to go about it, about how that feels?
Well, precisely because it's sui generis, the only people that really know are the collection of ex-Presidents that we have. And I want to protect the confidentiality of those conversations since I expect to go back to them for advice, and I want to feel that they can give me unvarnished advice. I can tell you that all of them have said that it is important to carve out time to think and not spend your entire day reactive. Because there's always a crisis coming at you, there's always a meeting you could be doing, there's always a press conference or a group of supporters that you could be responding to. And so I think maintaining that kind of discipline is important.
Something that I have already experienced, and I have not fully solved, is how to break out of the bubble, which is extraordinarily powerful ... As a consequence of the security concerns surrounding this office, it is very hard for me to do what ordinary people do. That is the biggest adjustment, and that is not an adjustment I've made yet. And I'm not sure I'll want to make it entirely. The inability to go to the gas station and pump your own gas. Or go to the store and buy groceries. Or take your kids to the park. Those are experiences that aren't just intrinsically good, but they also keep me in touch with what Americans are going through. And so I'm trying to negotiate more space and do so in a way that doesn't put Secret Service members in more jeopardy. I'm trying to negotiate hanging on to some sort of electronic communication with the outside world. And so far, between the lawyers and the Secret Service and the bureaucrats, I'm not sure I'm winning that battle.

Given the economic situation, the picture you've painted of '09, are there any taxes that can be raised in this environment?
Well, I have said that I will be providing a net tax cut. Ninety-five percent of working Americans will be getting a tax cut. In part to pay for the tax cut for people who desperately need it, I've proposed that people who are making more than a quarter-million dollars a year lose the tax cuts they received from George [W.] Bush and that we go back to the rates they had in the 1990s. And that is a pledge I intend to keep.

But is that by letting them expire in '10 or by repealing them in '09?
Well, one way or another, they are going to lose those tax breaks under my Administration. My economic team is reviewing right now what the best option is.

Considering the economic hole we're in, and particularly the joblessness crisis right now, does that move health care up or down on the agenda in terms of real structural reform of providing health care?
I think it keeps it right where it is, which is one of my top three domestic priorities. How we sequence a movement toward affordable, accessible health care may vary because of the current economic situation.

What is it about your executive style that makes you good at standing up to big organizations to meet unprecedented challenges — whether it's the way you ran your campaign or now — so quickly?
I don't think there's some magic trick here. I think I've got a good nose for talent, so I hire really good people. And I've got a pretty healthy ego, so I'm not scared of hiring the smartest people, even when they're smarter than me. And I have a low tolerance of nonsense and turf battles and game-playing, and I send that message very clearly. And so over time, I think, people start trusting each other, and they stay focused on mission, as opposed to personal ambition or grievance. If you've got really smart people who are all focused on the same mission, then usually you can get some things done.

Do you ever get angry, and if you do, how would we know it?
If you want to tail me and [spokesman Robert] Gibbs for a few days, I could tell you, we've had it out a couple times. You know, my staff knows when I get angry. I'm not a shouter. I find that what was always effective with me as a kid, and Michelle and I find it effective with our kids, is just making people feel really guilty. Like "Boy, I am disappointed in you. I expected so much more." And I think people generally want to do the right thing, and if you're clear to them about what that right thing is, and if they see you doing the right thing, then that gives you some leverage. Hollering at people isn't usually that effective. Now, there are exceptions. There are times where guilt doesn't work, and then you have to use fear.

Now for a deeply personal question, which you may not feel comfortable answering. Did your grandmother die confident that you were going to be President?
You know, I don't know. But I know she voted for me. The last week of her life, she was in and out of consciousness. But I'd say three weeks before the election — or was it two weeks? About two weeks before the election, I think at that point, you know, the signs were that I might pull this off.
She was incredulous, I think, until the very end. I mentioned this in another interview. My grandmother would not have believed that this was possible. Not because of the race issues but because she was just a very Midwestern, steady person who generally was skeptical of these kinds of things and would have preferred I'd never gone into politics and done something sensible like try to become a judge or something after law school. My mother, on the other hand, I think would've never had a doubt because she was absolutely convinced that her son and her daughter were perfect. So it's a reflection more on their personalities.
But you think about my grandmother's life. I mean, here's a woman who was born in, let's see, 1912 or '22 — I've got to do my math — she was 86, so '22, rather. She really grew up in the Depression, in a small town in Kansas, and never got a college degree. Somehow found herself in Hawaii. Somehow found her daughter marrying an African guy. Raised this mixed kid who got in all kinds of trouble during his teenage years. You know, the likelihood of that little boy ending up President of the United States was pretty low.
So in some ways her life tracks this American — this remarkable American journey, where all of these different forces and cultures can come together and the possibility of upward mobility and opportunity for successive generations is a reality. Maybe not as much as we'd like it to be. Maybe not as fast as we'd like it to be. But it's there nonetheless.
All right?