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PRESIDENT BARACK OBAMA: The economy's growing again, but it's not growing as fast as we'd like.
GUY RAZ, HOST:
President Obama from his weekly video address this morning, talking about the jobless figures that came out this week, the worst in a year. James Fallows of The Atlantic is just back from China where the economy there isn't looking too great either. Jim, welcome back to you.
JAMES FALLOWS: Thank you, Guy. Nice to talk to you again.
RAZ: First, to China, because the president has mentioned China's economic slowdown, and a lot of economists were hoping that China would lead a global economic recovery. What was the sense you got when you were there last week?
FALLOWS: Strangely, there is a similarity to the sense in America right now, which is that if you look in the busy parts of the Chinese economy, and I was mainly in Shanghai, which is still quite strong, you see construction underway and people doing shopping and all sorts of plans and new businesses getting going.
But all of the leading indicators are looking bad for China right now, of new construction contracts, new overseas shipments. So I think there is a similar sense in China to America that a turning point in the wrong direction may be at hand.
RAZ: It's interesting, because just a few weeks ago, the talk was about how the presidential race would turn on social issues - gay marriage and reproductive rights - and the Romney folks were always insisting it would be about the economy. And right now, they appear to be right.
FALLOWS: They do. And still five months until Election Day. And in that time, either the economy will start growing again, which obviously would be good for the president, or it won't. And so we'll have a starker sense of the argument over economic failure. I think what's significant here is that incumbent presidents always want a re-election race to be about a choice.
That is, Barack Obama would like to say: Do you prefer me, or do you prefer this specific man, Mitt Romney, and all of his associates and all of his policies, whereas, challengers always want it to be about a referendum. Do you think the current administration has done a good job or a bad job? When there are economic problems, it's easier for the incumbent to make that case to say, as Ronald Reagan did back in 1980, are you better off than you were four years ago?
RAZ: Right now, we're looking at 8.2 percent unemployment nationally that has gone up in recent weeks. What about this idea that more and more Americans are looking at the economy and expecting it to get worse, even if things haven't necessarily changed a whole lot from last month or two months ago or three months ago?
FALLOWS: It is striking. If you look back four years ago or at least until the fall of 2008, in almost every objective way, the American economy is in better shape than it was as it began this huge fall in 2008 and 2009. And compared with two or three months ago, almost nothing is objectively worse in America, except for this recent stock market plunge.
But there is a very powerful sense of anticipation. I've been reading recently Walter Lippmann's wonderful book "Public Opinion," which coined this phrase, the pictures in our minds. And the picture in people's minds is that things may be headed down again. And that can have even huge business effects if people start drawing back their investments and their purchases, and so it can have a ripple effect on the rest of the economy. So mood matters. And the mood at this moment does not seem good.
RAZ: That's James Fallows, national correspondent for The Atlantic. You can find his blog at jamesfallow.theatlantic.com. And check out his new book. It's called "China Airborne." Jim, thanks so much.
FALLOWS: Thank you, Guy. Transcript provided by NPR, Copyright NPR.