Following John McCain’s flurry of four negative TV ads, Barack Obama launches his first negative ad of the general election with this spot scoring McCain for being “in the pocket of Big Oil.”

** HILLARY HITS THE ROAD FOR OBAMA. Hillary Clinton will hit the road for Barack Obama, with a Friday appearance in Nevada and and August 21st appearance and fundraiser in Miami. Both states are close between Obama and John McCain. Clinton narrowly beat Obama in Nevada in February, in the third contest of the Democratic nomination race. The Florida primary, in which Hillary finished first, didn’t count because the state party was in violation of national party rules and everyone agreed not to campaign there.

** CALIFORNIA BUDGET WATCH: ANOTHER SHOE DROPS? AS IN TEMPORARY TAX INCREASE? Last week, as reported, Governor Arnold Schwarzenegger made good on his promise to reduce the salaries of state employees to the federal minimum wage until the very late and chronically troubled state budget is passed, and to terminate contingent employees. Today his office announced the tally of terminated employees, which amounts to over 10,000 employees so far, with the state’s consumer services and business agencies taking the biggest hit.
In another development, the Sacramento Bee reports that Schwarzenegger now supports a temporary tax increase to raise some $5 billion in revenue per year. According, says the paper, to sources close to the negotiations, Schwarzenegger favors a one cent sales tax hike for three years.

In exchange for that, with legislative Democrats looking at layoffs and salary cuts for their major “anchor tenants,” as former Speaker Willie Brown calls them, the public employees, they would be expected to go along with permanent budget reforms, including a rainy day fund. Which then in turn, although the Bee does not say this, would be used to convince enough Republicans to vote for the package.

Schwarzenegger’s office has issued no comment on this.

** MCCAIN SAYS “DRILL NOW.” After touring a label factory in Pennsylvania — which makes labels for shampoo bottles and aspirin containers, and so forth — John McCain responded to Barack Obama’s big energy speech.

In a continuation of his new break with his famed practice, he declined to engage in any question-and-answers with his traveling press corps to maintain message discipline. That also tends to prevent more experienced journalists from getting him off message.

McCain said that he has outlined an “all-of-the-above” strategy on energy, declaring that “We have to drill here and drill now.”

“Anybody who says that we can achieve energy independence without using and increasing these existing energy resources either doesn’t have the experience to understand the challenge that we face or isn’t giving the American people some straight talk.”

He also mocked Obama’s suggestion last week for improving vehicle fuel efficiency by saying, “We’re not going to achieve energy independence by inflating our tires.”

McCain aides have taken to distributing tire gauges, mockingly emblazoned “Obama’s Energy Policy,” to reporters.

McCain, as noted earlier on NWN, visits a giant motorcycle rally this afternoon in South Dakota. Tomorrow he will tour a nuclear power plant in Michigan, which is where Obama presented his comprehensive energy plan today. McCain had hoped to knock Mitt Romney out of the Republican race in the Michigan primary, but lost there, abandoned by independent voters even though the Michigan Democratic primary didn’t count.

** OBAMA’S BIG ENERGY SPEECH. A major address by Barack Obama earlier today in Michigan, home of the declining auto industry and a keystone of the sagging industrial heartland of America. And one of three states John McCain desperately wants to win, the other two being Ohio and Pennsylvania.

Obama, as you’ll see in the speech excerpts below, gave a detailed address positioning McCain as a last gasp candidacy of the age of oil, scoring him for opposing throughout his congressional career most of the moves necesssary to transition to a new energy economy.

Citing California’s policies as in many respects constituting a model for America’s future, Obama laid out proposals to end America’s dependence on foreign oil and spur new clean tech job growth and a revitalized auto industry in ten years by promoting new vehicles, new fuels, and greater energy efficiency. Renewable energy and new building standards, fundamental refurbishing of the power grid, and safer nuclear technology and waste disposal as well as carbon sequestration of coal effluent are central elements of his plan.

In the short term, he would provide some relief at the pump via $1000 rebates funded by taxes on skyrocketing oil profits and tap into the Strategic Petroleum Reserve, the latter a reversal from his position earlier in the campaign. He challenged the oil companies to make use of their massive lease holdings on and offshore that are currently going unused, and said he is open to some additional offshore drilling, though not off the Pacific coast nor along the the Northeast, as part of a Senate compromise to generate some action there.

We meet at a moment when this country is facing a set of challenges greater than any we’ve seen in generations. Right now, our brave men and women in uniform are fighting two different wars while terrorists plot their next attack. Our changing climate is placing our planet in peril. Our economy is in turmoil and our families are struggling with rising costs and falling incomes; with lost jobs and lost homes and lost faith in the American Dream. And for too long, our leaders in Washington have been unwilling or unable to do anything about it.

That is why this election could be the most important of our lifetime. … And central to all of these major challenges is the question of what we will do about our addiction to foreign oil.

Without a doubt, this addiction is one of the most dangerous and urgent threats this nation has ever faced – from the gas prices that are wiping out your paychecks and straining businesses to the jobs that are disappearing from this state; from the instability and terror bred in the Middle East to the rising oceans and record drought and spreading famine that could engulf our planet. …

It’s also a threat that goes to the very heart of who we are as a nation, and who we will be. Will we be the generation that leaves our children a planet in decline, or a world that is clean, and safe, and thriving? Will we allow ourselves to be held hostage to the whims of tyrants and dictators who control the world’s oil wells? Or will we control our own energy and our own destiny? Will America watch as the clean energy jobs and industries of the future flourish in countries like Spain, Japan, or Germany? Or will we create them here, in the greatest country on Earth, with the most talented, productive workers in the world?

As Americans, we know the answers to these questions. We know that we cannot sustain a future powered by a fuel that is rapidly disappearing. Not when we purchase $700 million worth of oil every single day from some the world’s most unstable and hostile nations – Middle Eastern regimes that will control nearly all of the world’s oil by 2030. Not when the rapid growth of countries like China and India mean that we’re consuming more of this dwindling resource faster than we ever imagined. We know that we can’t sustain this kind of future.

But we also know that we’ve been talking about this issue for decades. We’ve heard promises about energy independence from every single President since Richard Nixon. We’ve heard talk about curbing the use of fossil fuels in State of the Union addresses since the oil embargo of 1973.

Back then, we imported about a third of our oil. Now, we import more than half. Back then, global warming was the theory of a few scientists. Now, it is a fact that is melting our glaciers and setting off dangerous weather patterns as we speak. …

You won’t hear me say this too often, but I couldn’t agree more with the explanation that Senator McCain offered a few weeks ago. He said, “Our dangerous dependence on foreign oil has been thirty years in the making, and was caused by the failure of politicians in Washington to think long-term about the future of the country.”

What Senator McCain neglected to mention was that during those thirty years, he was in Washington for twenty-six of them. And in all that time, he did little to reduce our dependence on foreign oil. He voted against increased fuel efficiency standards and opposed legislation that included tax credits for more efficient cars. He voted against renewable sources of energy. Against clean biofuels. Against solar power. Against wind power. Against an energy bill that – while far from perfect – represented the largest investment in renewable sources of energy in the history of this country. So when Senator McCain talks about the failure of politicians in Washington to do anything about our energy crisis, it’s important to remember that he’s been a part of that failure. Now, after years of inaction, and in the face of public frustration over rising gas prices, the only energy proposal he’s really promoting is more offshore drilling – a position he recently adopted that has become the centerpiece of his plan, and one that will not make a real dent in current gas prices or meet the long-term challenge of energy independence.

George Bush’s own Energy Department has said that if we opened up new areas to drilling today, we wouldn’t see a single drop of oil for seven years. Seven years. And Senator McCain knows that, which is why he admitted that his plan would only provide “psychological” relief to consumers. …

Now, increased domestic oil exploration certainly has its place as we make our economy more fuel-efficient and transition to other, renewable, American-made sources of energy. But it is not the solution. It is a political answer of the sort Washington has given us for three decades.

There are genuine ways in which we can provide some short-term relief from high gas prices … I believe we should immediately give every working family in America a $1,000 energy rebate, and we should pay for it with part of the record profits that the oil companies are making right now.

I also believe that in the short-term, as we transition to renewable energy, we can and should increase our domestic production of oil and natural gas. But we should start by telling the oil companies to drill on the 68 million acres they currently have access to but haven’t touched. And if they don’t, we should require them to give up their leases to someone who will. We should invest in the technology that can help us recover more from existing oil fields, and speed up the process of recovering oil and gas resources in shale formations in Montana and North Dakota; Texas and Arkansas and in parts of the West and Central Gulf of Mexico. We should sell 70 million barrels of oil from our Strategic Petroleum Reserve for less expensive crude, which in the past has lowered gas prices within two weeks. Over the next five years, we should also lease more of the National Petroleum Reserve in Alaska for oil and gas production. And we should also tap more of our substantial natural gas reserves and work with the Canadian government to finally build the Alaska Natural Gas Pipeline, delivering clean natural gas and creating good jobs in the process.

But the truth is, none of these steps will come close to seriously reducing our energy dependence in the long-term. We simply cannot pretend, as Senator McCain does, that we can drill our way out of this problem. …

Last week, Washington finally made some progress on this. A group of Democrat and Republican Senators sat down and came up with a compromise on energy that includes many of the proposals I’ve worked on as a Senator and many of the steps I’ve been calling for on this campaign. …

Like all compromises, this one has its drawbacks. It includes a limited amount of new offshore drilling, and while I still don’t believe that’s a particularly meaningful short-term or long-term solution, I am willing to consider it if it’s necessary to actually pass a comprehensive plan. I am not interested in making the perfect the enemy of the good …

And yet, while the compromise is a good first step and a good faith effort, I believe that we must go even further, and here’s why – breaking our oil addiction is one of the greatest challenges our generation will ever face. It will take nothing less than a complete transformation of our economy. This transformation will be costly, and given the fiscal disaster we will inherit from the last Administration, it will likely require us to defer some other priorities. …

It is also a transformation that will require more than just a few government programs. Energy independence will require an all-hands-on-deck effort from America – effort from our scientists and entrepreneurs; from businesses and from every American citizen. … For the sake of our economy, our security, and the future of our planet, we must end the age of oil in our time.

Creating a new energy economy isn’t just a challenge to meet, it’s an opportunity to seize – an opportunity that will create new businesses, new industries, and millions of new jobs. Jobs that pay well. Jobs that can’t be outsourced. Good, union jobs. For a state that has lost so many and struggled so much in recent years, this is an opportunity to rebuild and revive your economy. …

If I am President, I will immediately direct the full resources of the federal government and the full energy of the private sector to a single, overarching goal – in ten years, we will eliminate the need for oil from the entire Middle East and Venezuela. To do this, we will invest $150 billion over the next ten years and leverage billions more in private capital to build a new energy economy that harnesses American energy and creates five million new American jobs.

There are three major steps I will take to achieve this goal – steps that will yield real results by the end of my first term in office.

First, we will help states like Michigan build the fuel-efficient cars we need, and we will get one million 150 mile-per-gallon plug-in hybrids on our roads within six years.

I know how much the auto industry and the auto workers of this state have struggled over the last decade or so. But I also know where I want the fuel-efficient cars of tomorrow to be built – not in Japan, not in China, but right here in the United States of America. Right here in the state of Michigan.

We can do this. When I arrived in Washington, I reached across the aisle to come up with a plan to raise the mileage standards in our cars for the first time in thirty years – a plan that won support from Democrats and Republicans who had never supported raising fuel standards before. I also led the bipartisan effort to invest in the technology necessary to build plug-in hybrid cars. …With technology we have on the shelf today, we will raise our fuel mileage standards four percent every year.

We’ll invest more in the research and development of those plug-in hybrids, specifically focusing on the battery technology. We’ll leverage private sector funding to bring these cars directly to American consumers, and we’ll give consumers a $7,000 tax credit to buy these vehicles. But most importantly, I’ll provide $4 billion in loans and tax credits to American auto plants and manufacturers so that they can re-tool their factories and build these cars. …

What’s more, these efforts will lead to an explosion of innovation here in Michigan. At the turn of the 20th century, there were literally hundreds of car companies offering a wide choice of steam vehicles and gas engines. I believe we are entering a similar era of expanding consumer choices, from higher mileage cars, to new electric entrants like GM’s Volt, to flex fuel cars and trucks powered by biofuels and driven by Michigan innovation.

The second step I’ll take is to require that 10% of our energy comes from renewable sources by the end of my first term – more than double what we have now. To meet these goals, we will invest more in the clean technology research and development that’s occurring in labs and research facilities all across the country and right here at MSU …

I’ll also extend the Production Tax Credit for five years to encourage the production of renewable energy like wind power, solar power, and geothermal energy. It was because of this credit that wind power grew 45% last year, the largest growth in history. Experts have said that Michigan has the second best potential for wind generation and production in the entire country. And as the world’s largest producer of the material that makes solar panels work, this tax credit would also help states like Michigan grow solar industries that are already creating hundreds of new jobs.

We’ll also invest federal resources, including tax incentives and government contracts, into developing next generation biofuels. By 2022, I will make it a goal to have 6 billion gallons of our fuel come from sustainable, affordable biofuels and we’ll make sure that we have the infrastructure to deliver that fuel in place. Here in Michigan, you’re actually a step ahead of the game with your first-ever commercial cellulosic ethanol plant, which will lead the way by turning wood into clean-burning fuel. It’s estimated that each new advanced biofuels plant can add up to 120 jobs, expand a local town’s tax base by $70 million per year, and boost local household income by $6.7 million annually.

In addition, we’ll find safer ways to use nuclear power and store nuclear waste. And we’ll invest in the technology that will allow us to use more coal, America’s most abundant energy source, with the goal of creating five “first-of-a-kind” coal-fired demonstration plants with carbon capture and sequestration.

Of course, too often, the problem is that all of this new energy technology never makes it out of the lab and onto the market because there’s too much risk and too much cost involved in starting commercial-scale clean energy businesses. So we will remove some of this cost and this risk by directing billions in loans and capital to entrepreneurs who are willing to create clean energy businesses and clean energy jobs right here in America.

As we develop new sources of energy and electricity, we will also need to modernize our national utility grid so that it’s accommodating to new sources of power, more efficient, and more reliable. …

Finally, the third step I will take is to call on businesses, government, and the American people to meet the goal of reducing our demand for electricity 15% by the end of the next decade. This is by far the fastest, easiest, and cheapest way to reduce our energy consumption – and it will save us $130 billion on our energy bills.

Since DuPont implemented an energy efficiency program in 1990, the company has significantly reduced its pollution and cut its energy bills by $3 billion. The state of California has implemented such a successful efficiency strategy that while electricity consumption grew 60% in this country over the last three decades, it didn’t grow at all in California. And California has been growing by leaps and bounds.

There is no reason America can’t do the same thing. We will set a goal of making our new buildings 50% more efficient over the next four years. And we’ll follow the lead of California and change the way utilities make money so that their profits aren’t tied to how much energy we use, but how much energy we save.

In just ten years, these steps will produce enough renewable energy to replace all the oil we import from the Middle East. Along with the cap-and-trade program I’ve proposed, we will reduce our dangerous carbon emissions 80% by 2050 and slow the warming of our planet. And we will create five million new jobs in the process.

If these sound like far-off goals, just think about what we can do in the next few years. One million plug-in hybrid cars on the road. Doubling our energy from clean, renewable sources like wind power or solar power and 2 billion gallons of affordable biofuels. New buildings that are 50% more energy efficient.

So there is a real choice in this election – a choice about what kind of future we want for this country and this planet.

Senator McCain would not take the steps or achieve the goals that I outlined today. His plan invests very little in renewable sources of energy and he’s opposed helping the auto industry re-tool. Like George Bush and Dick Cheney before him, he sees more drilling as the answer to all of our energy problems, and like them, he’s found a receptive audience in the very same oil companies that have blocked our progress for so long. In fact, he raised more than one million dollars from big oil just last month, most of which came after he announced his plan for offshore drilling in a room full of cheering oil executives. His initial reaction to the bipartisan energy compromise was to reject it because it took away tax breaks for oil companies. And even though he doesn’t want to spend much on renewable energy, he’s actually proposed giving $4 billion more in tax breaks to the biggest oil companies in America – including $1.2 billion to Exxon-Mobil.

This is a corporation that just recorded the largest profit in the history of the United States. . This is the company that, last quarter, made $1,500 every second. That’s more than $300,000 in the time it takes you to fill up a tank with gas that’s costing you more than $4-a-gallon. And Senator McCain not only wants them to keep every dime of that money, he wants to give them more.

So make no mistake – the oil companies have placed their bet on Senator McCain, and if he wins, they will continue to cash in while our families and our economy suffer and our future is put in jeopardy. …

I want you all to think for a minute about the next four years, and even the next ten years. We can continue down the path we’ve been traveling. We can keep making small, piece-meal investments in renewable energy and keep sending billions of our hard-earned dollars to oil company executives and Middle Eastern dictators. We can watch helplessly as the price of gas rises and falls because of some foreign crisis we have no control over, and uncover every single barrel of oil buried beneath this country only to realize that we don’t have enough for a few years, let alone a century. We can watch other countries create the industries and the jobs that will fuel our future, and leave our children a planet that grows more dangerous and unlivable by the day.

Or we can choose another future. We can decide that we will face the realities of the 21st century by building a 21st century economy. In just a few years, we can watch cars that run on a plug-in battery come off the same assembly lines that once produced the first Ford and the first Chrysler. We can see shuttered factories open their doors to manufacturers that sell wind turbines and solar panels that will power our homes and our businesses. We can watch as millions of new jobs with good pay and good benefits are created for American workers, and we can take pride as the technologies, and discoveries, and industries of the future flourish in the United States of America. We can lead the world, secure our nation, and meet our moral obligations to future generations.

This is the choice that we face in the months ahead. This is the challenge we must meet. This is the opportunity we must seize – and this may be our last chance to seize it.

And if it seems too difficult or improbable, I ask you to think about the struggles and the challenges that past generations have overcome. …

** BOB NOVAK ANNOUNCES IMMEDIATE RETIREMENT. Conservative columnist Bob Novak has just announced his retirement, effective immediately. Novak cited his recent discovered brain tumor, describing his prognosis as “dire,” saying he will soon begin radiation treatment and chemotherapy.

Novak, who has written a column about national politics for 45 years — he and then partner Rowland Evans were at the center of a sardonic key plot point in the classic 1972 Robert Redford film, The Candidate — was known for his scoops, frequently embarrassing to liberals. He had some good sources, but he also got things wrong.

He was in the news of late on several matters, all in rapid succession. During Barack Obama’s foreign tour, he reported that John McCain was just about to name his running mate. That seemed to many of us to be incorrect. Novak then said he had been played by a McCain advisor or two, as a means of cutting into Obama’s news flow. Right after that, he ran into a Washington pedestrian in his black Corvette, only pulling over blocks later. Fortunately, the pedestrian, who bounced off the hood of the ‘Vette, wasn’t seriously hurt. Then Novak was diagnosed with the brain tumor.

Novak has been a very entertaining figure in politics for as long as I can remember, one who frequently had interesting information to impart. Let’s hope his treatment goes well.

The Morning Column: MONDAY MORNING QUARTERBACK

It’s the final week of campaigning before the Olympics. Today Barack Obama turns 47, launches his first negative ad of the general election campaign, and presents what’s billed as a comprehensive new national energy plan. Rival John McCain, incidentally, turns 72 before next month’s Republican national convention.

Obama hopes to push free from the decidedly un-pretty yet effective bear hug tactics employed last week by Team McCain to jam him up after his excellent tour of the Middle East and Europe. McCain hopes to keep jamming Obama.

McCain can’t afford for Obama to get separation in the race going into the Olympics, which usually dominate the American conversation during the height of summer every four years. Because the Democratic national convention is right after the Olympics.

So McCain will probably keep jamming and jabbing at the (slight) frontrunner. Unless he dislikes the backlash, some of which is coming from some of his close old associates, like former chief strategists Mike Murphy and John Weaver.

Meanwhile, both men are weighing potential running mates.

Obama will intriguingly spend a day in Indiana this week, much of it perhaps with potential running Evan Bayh, the veteran US senator and former governor. Indiana is very much in play this year already. The moderate and personable Bayh, a longstanding figure in national politics whose father Birch was also a powerful senator, would definitely help Obama there and elsewhere.

McCain is introducing a new player in the veepstakes, Virginia Congressman Eric Cantor. The 45-year old Cantor is one of the most conservative Jewish politicians in America, a staunch business advocate who has opposed US aid to the Palestinian Authority. He had a private meeting with McCain last month at the Hamptons estate of defense contractor Ronald Perelman, and this morning hosted a McCain media call attacking Obama on energy.

And in California, the Legislature is back in town, perhaps to deal with the state’s chronic budget crisis.

See the item below, “From The Arnold File.”

** FOUR ON THE FLOOR: MAC TV. So why did lovable old John McCain suddenly put out FOUR negative TV ads in less than two weeks?

After the latest (and rather good) version of his positive biographical spot went wide just three weeks ago?

I’ll lay out the sequence of events and reasons at each juncture.

Are new campaign director Steve Schmidt and company crazy like foxes?

Or just crazy?

Well, here’s the deal. Schmidt and company may be setting themselves up for a big backlash. But in the short term, their plan has worked. From my other blog.

** WHERE THEY ARE TODAY.

Barack Obama is in Lansing, Michigan and Boston. He unveils his new national energy plan in Lansing and has a fundraiser in Boston. The speech receives roadblocked cable news net coverage around 9 AM Pacific.

John McCain is in Lafayette Hills, Pennsylvania and Sturgis, South Dakota. He has a small business roundtable in the former and attends a huge biker rally in the latter. Yes, you read that right. It’s the Sturgis Rally 2008, generally a raucous affair with bikini contests and heavy drinking. And thousands of veterans.

** FROM THE ARNOLD FILE. Governor Arnold Schwarzenegger is in and around the Capitol today in private meetings regarding the chronic state budget crisis. The Legislature is back, too. After various claims that Schwarzenegger wouldn’t dare move to slash state employee pay to the federal minimum wage and terminate contingent employees, public employee unions have filed suit to try to block the move and Democratic state controller John Chiang says he won’t implement it. But the California Supreme Court has previously ruled on the matter. So there may be some movement.

Alexander Solzhenitsyn, the Nobel Prize-winning writer who exposed the Communist purges and gulags, a pro-West hero during the Cold War, died over the weekend in Moscow. He was 89. Accepted back into the fold by the Putin regime for his staunch nationalism and criticism of NATO, he was little known by many younger Russians.

** 24/7 LIVE TV NEWS FEED FROM RUSSIA TODAY. Russia has re-emerged as one of the world’s great powers. Click here for a live TV news feed on your computer, bringing you English-language, jargon-free, fast-paced coverage of global and Russian news from the new Russia Today channel. You probably already know about CNN International, BBC World, and Al Jazeera. Russia Today, which also features culture, entertainment, and sports, is based in Moscow and is owned and operated by the TV Novosti division of Russia’s state news agency, RIA Novosti.

While it’s quite foolish to expect to see, say, criticism of Vladimir Putin on Russia Today, which I know as a former DemRussia advisor, the channel is very interesting nonetheless. With U.S. cable news chattering away as it does, this sort of respite can be informative. The NWN live link to RT does not constitute an endorsement of the channel’s views. It’s presented as an otherwise unavailable new media window.

** TRACK GLOBAL AND U.S. ENERGY PRICES IN NEAR REAL TIME VIA BLOOMBERG ENERGY MARKET WATCH. After crashing over $147 for yet another record on July 11th, crude oil is trading in the $124 to $125 per barrel range. The drop of over $20 per barrel comes on acknowledgement that the weak US economy will cut future demand and the easing of geopolitical tensions.

Your posts are welcome in the Forum.