Bush: 'I'm worried about gasoline prices'

Insana: I want to ask more, a little bit more about energy with respect to its impact on the economy and inflation.

President Bush: Yeah.

Insana: The government, whether it's, you know, your administration or even the Federal Reserve, that inflation's not a problem right now. And that's true unless you are filling up your car, buying a house, now picking up a cup of coffee at Starbucks, sending your kid to school, or paying your doctor bills. Is inflation a problem for the average American that's going unrecognized by the federal government?

President Bush: No, I don't think so. Yes, I think inflation can be a problem for the average American, and no, I don't think it's going unrecognized. As a matter of fact, why I was so strongly for tax relief, you know, I, I, I want there to be more money in the pockets of the average American family. And, you know, some are talking about running taxes back up. I think it would be a huge mistake. I think it would hurt the economy, but more importantly it would hurt the average American family.

Insana: One item that seems to be pushing up the price of oil is a falling U.S. dollar, because oil is priced in dollars.

President Bush: Right.

Insana: And some people are wondering if you are prepared to make a forceful statement or take forceful action to boost the value of the dollar and help drive down the price of oil.

President Bush: Right. Well, I, let me, I, I'll try to make a forceful statement right now. This government is for a strong dollar. We do believe the market ought to set the price of the dollar relative to other currencies, but we are for a strong dollar.

Insana: Now, what about the Chinese currency? We'll talk a little bit about trade here because you came out and said recently that you'd like to see the market set the price of the Chinese currency sometime soon.

President Bush: Right.

Insana: Are you getting any indications from the Chinese government, with which we now have a $160 billion annual trade deficit --

President Bush: No, Ron, I -- listen, I, you know, I, I meant what I said, that China's a trading partner, we would like to see them float their currency. They don't move quite as quickly as we do in America. There have been some indications that they're thinking about a, you know, a interim step toward floating the currency. We're constantly urging them, if they're going to take that step, to take it as soon as possible and eventually get to a float cur -- a, a currency which floats. And, you know, I think you would find that officials all up and down our administration and different cabinet officers, cabinet secretariats are constantly talking to China about this issue.

Insana: How long do you think it'll take them to do it?

President Bush: It's hard for me to predict. It's a non-transparent society. It's not like a democracy, where the China can follow every single movement of our country and all the decision-making because you do a very find job of putting it on the airways and people, people can make calculations as to how fast the United States may or may not do something. We, we don't have that same look into the Chinese government that...

Insana: They've been doing some interesting things on the energy front, cutting deals with Russia, Venezuela --

President Bush: Yeah.

Insana: -- African nations. Do you think the Chinese are trying to crowd the U.S. out of the energy markets? Because five, 10 years from now, their needs are going to be even bigger than our own.

President Bush: You know, I don't think so. I don't think there's a -- you know, and a -- a, kind of a, a, a economic war plan that would crowd the U.S. out of the energy market. I do think they're trying to, you know, satisfy a huge appetite for a massive economy growth, a fast-growing economy. And I was pleased to see that, that they're willing to, you know, build nuclear power plants. And I would hope India would do the same thing, these fast-growing under-developed economies. Because as they demand energy, it would be very helpful that a part of that demand is not in the hydrocarbon sector.

Listen, we're all going to have to diversify away from hydrocarbons over time, Ron.

Insana: Right.

President Bush: I mean, we're just going to have to change our habits. And that's one of the reasons why I funded the hydrogen-powered automobile initiative, fully recognizing that, you know, with the decade we're going to have to think about how to drive different -- you know, power, power our automobiles. It's a -- the hydrocarbon society will still be with us, but it can't be with us to the extent it is today.

Insana: We sat down about 18 months ago last time to talk about the economy and things were starting to take on a much brighter tone than they had in years prior. And I asked you at the time why Americans should rehire you as the CEO of the United States. Right now, only 41 percent of Americans in an NBC News poll --

President Bush: [Starts laughing.]

Insana: I know how much you love polls. Are having a favorable reaction toward your handling of the economy.

President Bush: Yeah.

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