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Hopes for Obama's Second Term

Bill Moyers gets post-election insight from veteran journalist James Fallows.

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BILL MOYERS: Why? How so?

JAMES FALLOWS: There is a confidence in what China has done the last 30 years, as there should be. That any family there, if it looks back 30 years, their prospects are unimaginably better off than they were 30 years ago, when they didn't have a refrigerator or any of that stuff. And so they're confident in that. There're tremendous opportunities. But there is tremendous cynicism in China, a tremendous dissatisfaction.

Their problems are worse than ours in every dimension, environmental, economic-- which is what I write about this book. Political legitimacy. There is more cynicism about the Chinese political system than we have about ours. And the contrast to the world's two great powers are changing their leadership November of 2012.

Everything about America is in the open, you know, to a fault. Everything about China is mysterious. You know, nobody knew the day before they started to do this process exactly who'd be in charge, how many people would be in charge, when it'd be announced, et cetera. So it's really a contrast--

BILL MOYERS: We took that off the Americans for Prosperity, the Koch brothers front group, off their website. Why would they be running this ad right it's an old ad, as you say, two years ago, running it again in 2012?

JAMES FALLOWS: It was part of the narrative that started with the Tea Party that these worst problem for America is the national deficit. Now I think that is a problem in the long run for America. The real economic problem for right now is joblessness and inequality. And so, I think it was part of a Republican Tea Party narrative that the way the big menace to America was the deficit.

Therefore, deficit spenders, who they allege to be Democrats, you know, not talking about the Bush administration or anything. That is why it was essentially a Republican Tea Party inspired narrative that happened to produce what I view as an artistically very interesting ad.

BILL MOYERS: Do we work for the Chinese? And if we even do to some extent, are they likely to use that to their advantage over us?

JAMES FALLOWS: We, no, we don't work for them. When Japan was rising, its companies were head to head competitors with American companies. It was Toyota versus GM. It was Toshiba versus IBM, et cetera, et cetera down the line. Chinese companies are subcontractors for American brands. Every Apple product is made in China. Two weeks ago, I was seeing where they were made.

But of the $1,000 for an Apple computer, only about $80 or $90 stays in China. The rest is with Apple and with the screen makers and advertisers and retailers and Fed Ex and all the rest. And so, we have a trade deficit with China. The debt that the Chinese hold over us actually they view as a weakness on our side for them, rather than us-- number one, it makes them hostage to the value of our dollar and to our financial markets.

If we're having a discussion in China, people would say, "What are we thinking, having all our savings in these U.S. treasury notes? You know, what if they default? What-- the interest, what if they have runaway inflation, et cetera, et cetera?" It's the imbalance between the two countries is a sign of imbalance in both of our systems.

We've been too debt dependent and too over consumptive. They have been too export dependent and they haven't lived as well as they should. A poor country is lending money to a rich country. That is odd and needs to change and will.

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