• Highlights from this interview
• His team didn't foresee how bad the Wright issue could get
• Why Obama won
• What explains his broad appeal to voters

So in early 2007, Obama makes his announcement at Springfield, [Ill.,] that he's running, and Rev. [Jeremiah] Wright has been disinvited from the invitation. When Rev. Wright re-emerges, what are the implications to the Obama campaign?

In the last week of the campaign, I was interviewing David Plouffe, Obama's campaign manager, going over some of these big episodes. And Plouffe said, "That was the episode that could have destroyed our campaign." He called it a "direct torpedo to the hull." So inside, they were absolutely terrified that it all could have ended with Wright. It was that big a deal at the time.

Why?

Because they knew that the people that Obama surrounded himself with was very important for voters to know about. He's new -- we don't have a lot of information about Barack Obama -- so they knew that they wanted to surround him with people like eventually Joe Biden as his vice president. They knew that the American people who had questions about him -- it was important to have the proper surrogates out there speaking on his behalf.

So the Obama campaign called the attacks based on these friends of Obama the "association strategy." In fact, some of his campaign advisers told me they never understood why the McCain campaign didn't go to "associations" earlier in the campaign, because their polling told them that it was important to the American people who this guy hung out with. So they didn't understand why McCain didn't go after [former Weather Underground member Professor William] Ayers and Wright and [convicted political fundraiser Tony] Rezko early on and define Obama with some of these shady Chicago connections that he had to overcome.

Do you think they were they living in fear of Wright?

I don't think they were. I don't think that they knew what was out there. Just like the Hillary Clinton campaign didn't know, I don't think that they knew that there were those concentrated clips that, once they popped on television, were going to just define who Rev. Wright was.

And look, let's be honest: Those clips -- the guy's more complicated than that. Obama understood Wright's complexities. If you read what Obama has written about Wright, he's always trying to draw [a picture of] what's good and mainstream about Rev. Wright. I don't think he realized that the sort of concentrated radical side of Wright would come to define the guy.

I think Obama thought that like most of these issues that he was able to overcome -- Rezko, or Bill Ayer[s] -- that if he explained it calmly and intelligently, most people would understand that it wasn't as bad as it looked, or this person wasn't as controversial as he seemed, or our relationship wasn't as meaningful as his opponents were trying to make it out.

So no, I don't think that they knew that it was that bad, because after all, The New York Times had written about who this guy was and some of the controversial things he said.

And one thing we learned in this campaign -- and this is something that I picked up from some of the Obama people at the end -- for all the talk about how diffuse the media is and how the blogosphere and YouTube is important -- nothing mattered unless it hit network TV. And the Wright thing was in the newspapers; his comments were all over the Internet. But it didn't matter. It wasn't a "direct torpedo to the hull," in David Plouffe's word[s], until it hit network television, and with that it exploded.

And in a campaign style that's worked for successful politicians for generations, they turned into the skid and used it as an opportunity to address the one issue that seemed to be potentially toxic for him: race.

Yeah. Their first instinct was what I think was sort of the high moment of the campaign on all sides. Obama had been thinking about giving a speech on race. He knew that in a sense, we in the press almost demanded that he's got to address this subject. The press is very obsessed with the issue of race. I think he knew he had a responsibility to give at least one speech on the subject. Remember, they did not want the campaign to be about race. They went out of their way to make race a non-issue.

So I think that they realized: "Hey, let's turn crisis into opportunity. Let's give that speech that Obama has been talking about for a while." He called his advisers; he said, "I want to do it in just..." -- I think it was a couple of days. And look, Obama's been writing about race for a long time. That speech was already written in his head, in a certain sense, a lot of those paragraphs that have been spelled out in his previous books and his speeches.

So he gives what is hailed in the press as this wonderful speech. Conservative[s] and liberals agree that what he did was he talked to the American people like adults. It was a complicated speech. It didn't have easy answers; it wasn't filled with platitudes. He actually tried to grapple with some of the complications of the subject.

And for a moment, I think the campaign probably thought that that settled the issue, judging by the reaction from the press. And then, of course, Rev. Wright goes to Washington and talks to the assembled Washington press corps at the National Press Club, and that changes everything.

But that speech on race will be remembered, I suspect, when people go back and look at it. They won't remember all the back-and-forth, but they'll remember there's a single moment in the campaign --

Yeah, because it's a moment when Barack Obama actually lived up to the expectations about him: that he was, in a sense, a different kind of politician.

I think for a lot of people, what you get cynical about when you watch these politicians and campaigns is that they don't talk to people like they're adults; they don't grapple with hard issues. And on certain issues, Obama falls into that trap as well.

But this was an example where he lived up to the expectation that he was something different; that he was intelligent and that he was actually going to treat the American people as intelligent human beings who can understand complexity in a very tough issue.

Why did he win?

The first reason he won is that 90 percent of the country believed that we were going in the wrong direction, and we'd had a Republican administration, and people were ready for change. And that's the first reason. Now, given that environment, any Democrat who was nominated should have been able to win. He had a few extra hurdles. He's a black guy; as [chief campaign strategist] David Axelrod told me once, he's a black guy named Barack Hussein Obama. You don't have to load up the wagon with any more bricks than that. So given that, he's got to run a flawless campaign. And it was a virtually flawless campaign.

And then he had to become a great candidate. It wasn't clear that he would be a great candidate at the beginning -- he had never operated at the level he needed to operate at to run a national campaign. And when he started out, he wasn't so --

There's one anecdote that David Axelrod told me. After he [Obama] came back from one of those debates with Hillary Clinton, he turned to his chief strategist, Axelrod, and said: "I was terrible. She mopped the floor with me." It was a health care debate. Hillary knows the subject. Obama was kind of sweating it out in front of this labor audience who really was pressing him for details that he didn't have. And he told David Axelrod, he said: "You know what? I realize I'm not a great candidate right now, but I'm going to be a great candidate." And by the end of the campaign, he obviously was.

So the political environment heavily favored whoever the Democrats nominated. But the real reason he won is the financial crisis. When the financial crisis hit the American people, mostly the people who weren't quite decided between these two guys, they had a good chance to see two potential presidents deal with a crisis. I think in the end what the historians will write is that it was Obama's temperament in that moment that won it for him. He was calm and unnerving at a time when things were falling apart.

And whether it's true or not, John McCain looked erratic. He looked like he was scurrying from one political ploy to another. And in a very strange sense, Obama became the conservative at that moment, at least when you think temperamentally. And that's what people were looking for: stability and reassurance. And that's what Obama projected at that moment.

I mean, it wasn't that he had some big, great idea about how to deal with crisis. He wasn't out there pushing lots of detailed policy proposals. In fact, he was pretty careful to stay out of the negotiations up on Capitol Hill. It was his temperament, which has always, always served him very well. In a certain sense, it's the conservative streak in him -- I don't mean ideologically but temperamentally.

You look at the audience and at him that election night at Grant Park -- what did you see? And what does it say about America?

Well, the first thing I saw -- from watching the guy for two years and covering him for really almost four years -- this was the first time I looked at him and said, "Wow, he actually looks like he understands the gravity of what he now has to deal with."

Obama doesn't have high highs, and he doesn't have low lows. I've seen him backstage when he's about to go address a crowd of thousands, and there's no butterflies, no nervousness. He might be talking to you about what you had for breakfast, and then, bang, he's introduced to go out, he goes out and does his thing. You ask his staff for examples of when this guy gets emotional, and you don't really get those stories. He doesn't show a lot of emotion.

That night when he came out, the look on his face to me looked like someone who finally understood the weight of the job that he had just won. What that says about America is a tough one. I don't think it says that race isn't a problem anymore. We shouldn't be naive about how intractable the race issue is. We don't live in a post-racial society. Even after electing the first African American president, most of the problems that revolved around race the day before his election are still present in America the day after his election. [And ] a lot of people and a lot of us in the press believed people would not vote for a black man, or would vote against him based on his race. And obviously they were wrong; that when things get so bad, race fades a bit as an issue. That's one possibility of what it says.

The other possibility is that the sort of latent racism that was picked up in some of the polling, and that a lot of the press believed existed, just wasn't there in the end at all. I think those are the two possibilities. One is that it just becomes reduced as an issue because things were so screwed up, or perhaps it wasn't as bad as we all thought it was.

At another time, it's conceivable that John McCain, with his histor[y], and the lack of experience by a candidate with Obama's résumé -- McCain should have mopped the floor up with him.

I hate to be so tactical about this, but I think it's about McCain not being able to overcome the fundamental dynamic of the race, which is people want not-Bush. Bush is the problem.

Barack Obama, from day one of this campaign when he was running against Hillary and then running against McCain, he only had one strategy: I'm not Bush, my opponent is. That's it. Just to simplify, the whole primary season, his argument was that Hillary Clinton is Bush. That was the implicit argument. When he talked about the last 20 years, he lumped the Clintons in with the Bushes.

And the beauty of it was, it worked in the primaries and in the general election. A lot of times the big problem that a presidential candidate has is making that pivot. Tactically, they didn't have to pivot a whole lot. They had the same argument in both contests. The specific groups of voters they were appealing to changed a little bit, but the basic argument was simple. It responded to what was on the mind of most voters, which is, "We want something new."

So if we look back at the campaign, what McCain needed to do was overcome his association with the president. And he needed to do it early on. He couldn't do it in the primaries because he would have had to sacrifice all of those conservative voters who he needed to woo. So he was probably stuck. And then when he tried to do it in the general election, it just came too late.

But the great example is [President Nicolas] Sarkozy in France: He won despite being from the same party as a very unpopular incumbent. But he did it by running against his own party, running against the incumbent. And McCain was never quite able to do that.

But look, one other strategic thing is that Obama absolutely buried John McCain in fund raising and in money spent, particularly on TV ads. Every cycle we talk about how TV is dead as a communications media in these races -- not true. In some of these formerly red states Obama ended up winning, he was on the air in 5-to-1, 6-to-1, 7-to-1 margins against John McCain in places like Florida and Indiana and Colorado -- all previously red states, all states that Obama won.

So the money advantage can't be understated. But look, you don't have a money advantage like that unless you're generating an incredible amount of enthusiasm, and Obama was doing that, and McCain wasn't.

In the broad sense I made a list of his biographical characteristics and the arc of his story -- soaring rhetoric, meticulous planner in the Senate, where he's getting ready; the gritty and surprising background in Chicago; the unpredictable thing that happened at Harvard where he found himself able to go to the other side and be the tough, adaptable builder of a [Chicago] Mayor [Harold] Washington-style coalition; a super-pragmatist.

And then I remember when your piece came out in The New Yorker, everybody I knew who was a sort of a progressive liberal went: "Thank God he's a real politician. He's a nasty, just ball-squeezing politician. Great."

Yeah, that's exactly the reaction I got.

So in a way, in the getting to know this guy in an environment where all the other things you said are true, there's that amalgam of who he revealed himself to be, or who we all revealed him to be. And it convinced people that he was a plausible president, even at 46 and even with a résumé that was just four years, right?

Yeah, and he had an exotic name; he's black. So for a lot of voters, he might as well be coming from Mars -- let's be honest.

But I think at the end of the day, he presented himself as incredibly normal. To go back to the financial crisis, you know, that was the moment where he just looked steady and calm and normal, and McCain didn't. And he said with his wife, Michelle, there after the election, in the 60 Minutes interview -- Obama is very self-aware, and he said, "I think we're one of the most normal, everyday couples to become president and first lady in a very long time."

And I think he's right about that. Look at what he was doing in 2000. At that 2000 convention, he was there trying to scrape together a ticket and getting his credit card rejected because he didn't have any money -- he couldn't pay his bills. He had student loans up until not that long ago. And of course his political career is very short, so he hasn't been playing the game as long as most people who get to be president.

So in some sense, despite the exotic background and name and the color of his skin, he is one of the most normal people to enter that job in a really long time, someone who has been grappling with some of the issues that average Americans grapple with.

Well, that may explain it. People may have gotten that, may have sensed it in that way people sense things?

Yeah, and that was always a knock against him, that he wouldn't be able to connect to people; that he didn't have that sort of Bill Clinton-like natural connection with average people. And his is different, but I think in his own way, he was very successful at sort of normalizing what initially was a very exotic reputation.

I talked to a shrink about the qualities of both candidates, I was interested in trying to get a sense. And I said: "So here's all the things we know about Obama. What's he doing?" And the person said: "He's integrated. His politics and his life story are an integration process. When he says, 'My story is the American story' in that 2004 speech, what he's really doing is -- he's already been through a process of integrating himself. I'm a white guy; I'm a black guy. I'm a black guy from a white family and white community, but I live in a black community now, and I married a black woman." And he's also doing that with America. And maybe that integration came together in Grant Park.

No, it's true. There's a lot of continuity with his life story and what he set out to do as a community organizer. I mean, it sounds pat, and sometimes I don't believe it myself because it's too easy -- this guy who was a community organizer and came to Chicago, very naively talking about bringing people together and organizing people for change. And at times I've sort of believed that. At other times I've thought that that's just his campaign rhetoric.

But I think if you're honest, you have to look at what he's accomplished and the way he accomplished it and say that there is an incredible amount of continuity between who Barack Obama was when he got out of Columbia University and set out to be a community organizer, and what he accomplished in this election.

Go back and read what he said in some of the local Chicago papers when he was a young man, and when he made that pivot from community organizer to politician. He always has been talking about bringing groups, people together. And his whole political career has been about expanding beyond this narrow base that he had when he started, [expanding] beyond those black neighborhoods that he first represented in the state Senate and adding white liberals, going to downstate Illinois and adding rural whites to the coalition, then setting out on that presidential journey and going to Iowa and putting together rural farmers and city- and urban-based white progressives in Iowa, and then going into South Carolina and adding African Americans to the mix, and going to Nevada and adding a big labor component to the mix, and then finally adding the white working class which everyone said he would have so much trouble with after the Hillary primary. No, he didn't have trouble with them.

And it's like a stone in a pond, ripple after ripple of these demographics who a lot of reporters thought, oh, that guy will never appeal to them. He finds the key to unlock them at every stage.

And it's pretty remarkable, because when all the pundits were sitting down looking at how this campaign would play out, the assumption was that his demographic profile would only appeal to a couple of segments of the electorate: African Americans and white liberals. And he managed to break through those barriers in a pretty big way. Previous candidates like him couldn't do it -- like [Colo. Sen.] Gary Hart or [N.J. Sen.] Bill Bradley, who had a similar profile. So I don't know what the next step is there --

We'll see. We'll see if he can hold them all.

Well, that's the question, too.