As chief executive of Hewlett-Packard from 1999 to 2005, Carly Fiorina was the most powerful woman in corporate America. She also became one of the most celebrated and criticized when she was fired from that job in February 2005 in a battle with Hewlett's board—and with tech venture capitalist Tom Perkins in particular—after a controversial merger with Compaq Computer. (She recounted that corporate melodrama in her bestselling memoir Tough Choices.)

Now, at a mere 53, Fiorina is polishing her distinguished résumé with a heavy dose of political activism. She is a top presidential campaign surrogate for presumptive Republican nominee John McCain and chairman of Victory '08, the Republican National Committee's fundraising and get-out-the-vote arm.

She is, of course, frequently mentioned in the media as a possible McCain running mate, but in an interview with Portfolio.com, she sounded more like an aspiring Treasury secretary.

Lloyd Grove: Every so often you might be unable to resist putting on your McCain surrogate hat, but I was hoping to talk to you just as a businesswoman and as Carly Fiorina, independent thinker.

Carly Fiorina: Well, for better or for worse, I usually am.

L.G.: OK, good. So let me ask: Who and/or what is to blame for the souring economy, the bear market and $140-plus oil—the folks in charge?

C.F.: Well, I don't think any president is responsible for any one of those things, and that's not a partisan comment – just like I don't think we can blame Bill Clinton for the tech boom and bust. So I don't think you can blame George Bush for the credit boom and bust. But I think what we're seeing right now is very similar to what we saw in the tech boom and bust. We saw a whole set of financial instruments and financial institutions rush into the real estate market with a new and innovative set of credit instruments, and those credit instruments drove a huge upswing in growth in that part of the market. But they were also poorly understood, they weren't particularly transparent, people began to forget about risk, and the boom cycle inevitably became a bust.

But the consequence of that bust has created a tightening of credit across the board. A tightening of consumer credit, a tightening of credit to small businesses, a tightening of credit generally, because these financial institutions—not to get too complicated here, but because they're bound by mark to market accounting—they are in essence writing down their assets as the market falls, causing them to be more cautious. They mark more assets down, I mean we're in kind of a self-perpetuating cycle here. And I don't think that has anything to do with which political party is in office, and I don't think it has anything to do with who is the president of the United States.

L.G.: So you think this was just led essentially by greed on Wall Street?

C.F.: Well, I think there was a situation where there was greed on Wall Street, there was a lack of transparency around a new set of financial instruments, there were a whole new set of financial instruments, there were a whole new set of financial players who were less regulated than banks, and all that together created a situation, which now is rippling through the economy.

L.G.: Who would you blame? I know a number of people have blamed Alan Greenspan for not doing something about this when he had the chance. As you know, he's been on a very active rehabilitation tour.

C.F.: I think it's a little bit of Monday-morning quarterbacking.

L.G.: What's wrong with that?

C.F.: I think it's hard to second-guess all of the decisions that are getting made when you don't have all of the same information, or are not in the same context. But there's no question that a period of easy money made certain risks look more attractive, and less risky than perhaps they should've. But, again, you go back to the tech boom and bust, part of that was how much was invested in telecommunications build-outs, and you had the same kind of thing—a lot of money chasing the opportunity to make more money, and people forgot basic elements of risk. I don't know how well you covered that or whether you remember much about it.

L.G.: [Laughs] I remember putting money into AOL.

C.F.: Exactly. So much the same kind of cycle unfortunately, but all of these cycles are worse and worse because our economies are more interconnected. And in this particular case, the financial instruments that were being used, when I say they lacked transparency, people didn't understand all the connections. Now, by the way, let me quickly say, there is a role for government in getting out of this—and so what a President McCain would do, what a President Obama would do, what Congress has done so far on a bipartisan basis, I'm not suggesting that there is nothing that can be done or should be done. But the cause of it fundamentally is not political, I don't believe.

L.G.: Gotcha. Now, in February 2003, before we went into Iraq, people were worried that the price of oil was skyrocketing to $35 a barrel.

C.F.: I know. That's incredible, isn't it?

L.G.: So tell me what your analysis of that is.

C.F.: I think there are a couple of things. First, I think clearly the demand for oil is skyrocketing, driven in large measure, but not completely, by the burgeoning economies in China and particularly in India. And there seems to be no abatement to that demand. Still, that rise in demand may explain why oil has risen from $35 a barrel, but it doesn't explain why the price of a gallon of oil has doubled in the past 12 months. For that, I think we have to look to a weak dollar, and people moving investment into commodities like oil; to some degree of speculation in that move. And I think we need to look on the margins to global unrest and concern. I don't think it's the Iraq war, however.

L.G.: You don't?

C.F.: No, I don't, because I think there was basically very little supply coming out of Iraq in 2003. I don't think in 2003 that people were counting on a big supply of oil coming out of Iraq. Perhaps they were in 2004, but I don't really think so.

L.G.: How much would you attribute the weakness of the dollar to the government fiscal policies that we've been subjected to?

C.F.: See, I happen to have a slightly different point of view than some do. I think a strong dollar is the result of policies, but I don't think the strong dollar is in and of itself a policy. So what do I mean by that? I think a strong dollar results from a belief that the U.S. dollar is a good investment. Where does that belief come from? I think bolstering free trade is a boon to the dollar. I think interest rates relative to other interest rates are a boon to the dollar. So a period of long easing or rapid easing is not helpful to a strong dollar actually, although it may be helpful to economic growth in the short term. And, most importantly of all, I think our pro-growth policies, if people believe that the U.S. economy is creating jobs and growing, then the dollar is likely to be stronger. If they don't believe that, it's likely we could be weaker. And, of course, as you know, a weak dollar is not all bad – export growth in our economy is one of the real highlights.

L.G.: Sure. Let me ask you sort of a dumb question, maybe.

C.F.: I doubt it.

L.G.: Well, you mentioned whether Clinton can be blamed for the tech boom and bust, but obviously under Clinton and the Republicans who controlled Congress, there were budget surpluses, and the economy was pretty strong through the latter part of his term. Republicans are supposed to be the party of fiscal responsibility, and your candidate has railed against this, but why do you think that is? That under the Democrats, the fiscal policy seems to be more responsible, and under Republicans, particularly these last seven and a half years, it has been sort of crazy.

C.F.: I think you've said a lot there.

L.G.: More than I should have.

C.F.: No, no. Fiscal policy is not just, or even not even principally, the purview of the president. There is Congress involved, and you're absolutely right that a Democratic president, Bill Clinton, and every Republican in Congress came to a set of agreements to balance the budget. That agreement was noteworthy, but it took both parties to play. You're also correct that it is a Republican Congress, and a Republican president, George Bush, who saw the greatest increase in government spending since the Great Society.

L.G.: Why is that?

C.F.: Because they made the wrong choices.

L.G.: I don't know how long you've identified yourself as a Republican.

C.F.: Well, I've been a Republican for all of my voting life.

L.G.: When you joined up, did you think this was going to be a party of conservative stewards of the budget?

C.F.: Yes, and I think it's one of the reasons why Republicans are losing congressional seats, because people are angry over the fact that government spending is out of control. I think it's one of the reasons that Bush's popularity is low. Clearly the war is driving as much if not more of that, but yes, I think there are people who are surprised and disappointed that a Republican president and a Republican Congress have in fact driven a huge spending increase. I'm talking about a domestic spending increase. Now, I will quickly say that those domestic spending increases have gotten very broad bipartisan support. So if you look at the farm bill, for example, I mean it's a tribute to pork. And everyone, including Obama but excluding McCain, signed onto the farm bill. McCain voted against it. He has voted against every one, he doesn't believe in farm subsidies – particularly to millionaire farmers.

L.G.: What are they growing in Arizona these days?

C.F.: Oh, I have no idea.

L.G.: I assume that the agricultural output of Illinois is higher than it is in Arizona. [The Illinois agriculture industry is more than twice the size of Arizona's, according to government statistics.]

C.F.: Yeah, but look, now I'm going to say what I really believe, but you may interpret it as a surrogate remark. It's the reason why I became a surrogate. John McCain actually does do what he thinks is right, even when it's to his political peril. I can remember being asked to go into Iowa in December, just before the caucuses, and just after he'd announced his opposition to ethanol subsidies. He knew what that would do to him. But he doesn't believe in them. And he has a track record to back it. So I think that his strident conviction that pork-barrel spending is wrong is backed up by a 20-year record. He's never asked for an earmark in 20 years—not once. There is no other member of Congress, Democratic or Republican, who has that record. Only John McCain has that record. Nobody else has come close.

L.G.: Why do you think Obama is out-raising McCain, not only on Wall Street but in Silicon Valley?

C.F.: Well, it's interesting. The last set of numbers that came out, he isn't out-raising McCain anymore. So for a long time, absolutely right, he was out-raising him in places like New York and Silicon Valley, and he may still be in those two particular locales. So I'm not trying to avoid your question, I'll come back to it. But on the other hand, if you look at the numbers that just got published for Obama and McCain for this past month, they're dead even.

L.G.: Because I was just looking over a piece in the Daily News suggesting that, for instance, on Wall Street, McCain raised something like $5 million within a certain period and Obama raised over $8 million in the same period.

C.F.: Yeah, from the trend looking backward you are correct. As a business person, I tend to look forward. And if you look at the trends over the last, call it three months, what you see is McCain's money trending upward, Obama's take trending downward, and in the month of June, they crossed.

L.G.: If we're talking about fundraising, it looks like the R.N.C. [Republican National Committee] is doing pretty well. In contrast to the D.N.C., particularly.

C.F: That's right, the R.N.C. is doing very well. The R.N.C. is out-raising the D.N.C. eight to one. All that money matters, it counts. Now that Barack Obama has made a decision to forgo public financing, he has to raise more money in each of the subsequent four months than he's ever raised before.

L.G.: Don't you think, as someone who is used to looking forward and looking at numbers and dealing with money, that Obama's decision was entirely rational and understandable?

C.F.: Well, if I set aside the fact that he absolutely changed his position. I find it – "disingenuous" is a kind word.

L.G.: Take off that surrogate hat, now.

C.F.: No, no, this is not a surrogate hat. I would've found it much more acceptable had Barack Obama come forward and said, "You know what? I'm going to change my mind and I'm going to change my mind because it's to my advantage to change my mind. I've raised a lot of money, and I want to spend a lot of money." But what he did instead was say, the reason why I'm changing my mind is ..."

L.G.: Because "the system is broken."

C.F.: Correct. I mean, please, that to me was disingenuous. I know why he changed his mind. He changed his mind because he's raised so much money and he wants to spend a lot of money. My only point is, having made that decision, he has to raise much more money in the next four months than in any of the previous months. It's a tall order. I think there's clearly been a downside to his credibility in terms of how he explained it. I guess I would just say, they must have incredible confidence in their ability to raise money, and from what I've seen over last couple months, I don't know where that confidence comes from.

L.G.: Let's switch gears here. Do you still root for Hewlett-Packard?

C.F.: Of course. I still own their products.

L.G.: Did you enjoy the ride back up on the stock?

C.F.: Oh, well I knew the ride was coming.

L.G.: So you held on, obviously didn't get rid of your stock at whatever it was, $12, when you were fired.

C.F.: No, absolutely not, and it wasn't $12 then. It was twice that. (These days Hewlett is trading at around $43.) You know, I knew what was coming at Hewlett-Packard. My choices and my leadership had been completely validated by what happened from the moment I left. And by the way, the best legacy of a leader is what happens after they go. That's how you know the kind of foundation they put in place. So I still root for them. I'm very proud of them. I have a lot of friends there, and I'm extraordinarily pleased.

L.G.: Why is it that a nice person like you is still ...

C.F.: Oh God, I've been through that so many times. Read my book.

L.G.: You saw this New York Times piece recently where Jeffrey Sonnenfeld at the Yale School of Management called you a "street bully."

C.F.: Yeah, well, Jeffrey Sonnenfeld is someone I've never met. I've never talked with him. That's been his point of view for eight years, and he's never changed. I have no idea why he thinks that. I can just tell you that would've been his quote in 1999, 2000, 2001, 2004, and now, 2008. So I'm not terribly concerned what Jeffrey Sonnenfeld thinks because I don't think he's influenced by the facts here, and I don't know what his ax is to grind.

L.G.: You're a high-tech person, and I just went on Facebook to see if I could find you and somebody named Carly Fiorina seems to have joined, like, four days ago. Was that you?

C.F.: Nope, not me. It was not someone on my behalf that I'm aware of.

L.G.: OK, so you're not a member of Facebook.

C.F.: No.

L.G.: You're on the Fox Business Network still?

C.F.: No. I suspended that agreement. It was a conflict to do this.

L.G.: Do you have any thoughts of why Fox Business hasn't gotten a bit more traction than it has?

C.F.: I think when you're doing something like that, you have to take the long view. I think that Rupert Murdoch clearly is taking the long view. He is building a business franchise with that channel, with the Wall Street Journal. I have no doubt that it will be very successful, but I think you can't expect a brand-new channel to get it all done in less than 12 months, which is about what we're talking about.

L.G.: It's so high-profile, there's no shortage of people that would want to throw brickbats at them.

C.F.: There are a lot of people who want it to fail.

L.G.: [Laughs] By the way, do you feel any kinship at all with any of these high-profile women on Wall Street who have been very publicly defenestrated, like Zoe Cruz at Morgan Stanley and Erin Callan at Lehman Brothers and Sallie Krawcheck at Citigroup?

C.F.: Well, look, men and women get fired. I think everyone in business or in politics, man or woman, understands that at the top, it's a rough game. But I think it's also undeniably true that women in positions of authority are characterized differently, scrutinized differently, talked about differently, than are men. So I have no information to make a judgment about how or why they were fired. I would only observe that women are always talked about differently. I have great empathy for Hillary Clinton.

L.G.: Indeed, I noticed that some of the ways your situation at H.P. was characterized treated your conflict with (then Hewlett-Packard director and later chairwoman) Patricia Dunn as something out of that Clint Eastwood women's boxing movie. Is that a fact of life now in corporate America and in the media? Do you think we'll ever get beyond that?

C.F.: Well, I don't think that's a fact of life in corporate America. I think women at the top of any field are still relatively rare. I mean, if you just look at the data in corporate America today, 16 percent of the senior officers and board members are women. That number hasn't budged in five years. So it's still quite rare, and it's clearly quite rare in politics as well. So when something is unusual, as women are in positions of authority, it gets scrutinized more, differently, the standards are different. That's just true, and I think we haven't moved beyond that completely yet. The media is a big part of it, no question.

L.G.: Hillary pointed out that toward the end of her race, she felt there was a lot of gender bias, particularly on some of the cable networks—and you agree with that analysis?

C.F.: I don't know how you can disagree. I think we have come to the point where we know, thankfully, that racism is unacceptable. I don't think we have come to the point where we understand that sexism is unacceptable. You know? When male anchors can jokingly say, and everybody gets the joke, "Well, Hillary is going to lose because she reminds people of their first wife," or when detractors hold up signs that say, "Iron my shirt," I mean, that's just not acceptable.

L.G.: So do you think if you talk like that enough and get enough attention for it, maybe you will peel off some Hillary votes for McCain?

C.F.: Well, you know, this is not a political comment. I think women recognize and understand what goes on with other women, and we empathize.

L.G.: Let me ask one last question. I'm just fascinated that your Stanford thesis was on the medieval practice of trial by ordeal.

C.F.: I know, isn't that wild?

L.G.: Have you gone back to look at it?

C.F.: Oh yeah, occasionally. I haven't done it in quite a number of years. But I'll tell you something even crazier. I went back and read text in the original Greek and the original Latin, I really got into it. It was interesting, I found it intellectually challenging.

L.G.: And it's had some kind of application to modern times, obviously.

C.F.: Well, I wouldn't go that far.

L.G.: Did you ever read Sex and the Single Zillionaire? (A cheesy novel, featuring scenes of sadomasochism, by Silicon Valley billionaire Tom Perkins, Fiorina's nemesis on the Hewlett-Packard board of directors.)

C.F.: I did not. My husband read a few chapters.

L.G.: Did he give it a review?

C.F.: Um...I guess his overall thinking was, "too much information."