Fortune Magazine got an opportunity to pit the two presidential candidates against each other in a debate over economics, which it will publish in the July 7th edition.   Fortune will even publish that edition with two different covers, one featuring John McCain and the other Barack Obama — which might provide some data for a crude straw poll based on which cover sells best.   While both candidates come off well, McCain very obviously comes across as the aggressor in the excerpts released today:

What do you see as the gravest long-term threat to the U.S. economy?

Obama: If we don’t get a handle on our energy policy, it is possible that the kinds of trends we’ve seen over the last year will just continue. Demand is clearly outstripping supply. It’s not a problem we can drill our way out of. It can be a drag on our economy for a very long time unless we take steps to innovate and invest in the research and development that’s required to find alternative fuels. I think it’s very important for the federal government to have a role in that process.

Mccain: Well, I would think that the absolute gravest threat is the struggle that we’re in against Islamic extremism, which can affect, if they prevail, our very existence. Another successful attack on the United States of America could have devastating consequences. You’ve been a supporter of climate-change legislation that would essentially impose a penalty on the use of fossil fuel.

Should consumers and businesses be prepared to pay higher prices for gasoline and electricity?

Mccain: The difference I have with the opponents of cap-and-trade is that they believe it will require greater sacrifice on the part of Americans. I think innovation and advanced technology are beneficial to the lives of American citizens and our economy. Long term, I do not believe we will see the price of a barrel of oil come down permanently or dramatically. I just happen to believe that even though this very high price—and it may go higher—has some artificiality associated with it, the fact is that there is a greater and greater demand for what is fundamentally a finite resource. So that then argues for nuclear power, for wind, tide, solar, and innovative technologies such as batteries that will take a car 100 miles before we have to plug it in.

Obama: There is no doubt that in the short term, adapting to this new energy economy is going to carry some costs. [But] I would never underestimate the power of American innovation. So my instinct is that there are going to be technological breakthrough that [lead to] declining energy prices over the long term. I think that the key is to make sure that if there are any short-term spikes in energy that we protect those who can least afford it. I think it’s a mistake to do it artificially—for example, by suspending the gas tax. I think that is a gimmick that will end up actually increasing our consumption of oil.

Obama makes the same mistake that the Democrats have made all throughout this debate — claiming that producing more oil won’t help a supply shortage.  Of course it helps to produce more supply, and the argument that it doesn’t makes the purveyor sound like an idiot.  The question will be whether that’s a sole long-term solution, and almost no one argues that it is.  Everyone wants to see innovation and alternative energy sources that can eventually replace oil, but it won’t come in the seven years Democrats insist it will take for new oil production to come to market.  It would probably be a shorter cycle than that, but it will take decades to develop innovative new fuel sources and build infrastructure to deliver it.  During that period, domestic oil production would calm the markets, curtail speculation, and deliver stable pricing.

McCain alone makes the point that oil is a national-security issue — and in fact is a subordinate issue to oil and the economy.  It’s also a component of the energy problem.  The supply shortage has vastly increased the revenues of oil-producing nations, a few of which actively fund the terrorists arrayed against us in war.  For Iran, the ballooning cost of oil also helps them survive the sanctions regime imposed by the UN.  We need to get that price to fall if the containment of Iran is to succeed and to have any chance of avoiding war to get them to stop enriching uranium.

Obama provides one moment of humor.  When asked about his management style and how it differs from the previous administration, Obama replies:

Obama: I insist on the suppression of ego. 

Just as a reminder of the suppression of ego:

Uh-huh.

In the excerpts, McCain directly hits Obama on taxes as well as his more burdensome plan on global warming and manages an indirect shot at Obama as a redistributionist.  Obama sticks pretty much to script and at least in the excerpts never engages McCain at all.  It gives a pretty good look at why Obama wanted to avoid town-hall debates, and why he may have been wise to fear McCain on the same dais.