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Can we please see more of Thom Hartmann on the cable news networks? Good for David Shuster for bringing him on while filling in for Keith Olbermann on Countdown. They discuss the Republicans absolute hatred for unions and the labor movement and their reasons for wanting to destroy it. Thom also has a suggestion for the Obama administration to get the economy back on track. Read Alexander Hamilton's Report on Manufactures from 1791 which Thom has posted at his site.

Hartmann: David what he needs to do immediately is read Alexander Hamilton's 1791 report to Congress on manufactures. Hamilton laid out this six step plan to build an industrial economy in the United States and we followed it. We, Congress actually put into place in 1792 and it stood until Ronald Reagan came along and started deconstructing this, followed by George Herbert Walker Bush, Bill Clinton and George Bush now and the legislatures, mostly pushed by the Republicans taking this thing apart. You could argue some of this started with Taft-Hartley. But basically the founders laid this thing out. They had it figured out and it worked. We built the biggest industrial infrastructure and industrial economy in the world.

We have gone, when Reagan came into office we were the largest exporter of manufactured goods and the largest importer of raw materials on the planet. And the largest creditor. More people owed us money than anybody else in the world. Now just twenty eight years later we're the largest importer of finished goods, manufactured goods, exporter of raw materials which is kind of the definition of a third world nation and we're the most in debt of any country in the world. This is the absolute consequence of Reaganomics.



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what the theory behind Supply Side Economics or Reaganomics even is?

The theory behind SSE is that if people are overtaxed, they will be disincentived to get a high paying job, because they will have to pay more taxes, therefore, they won't get a job. SO, the proposition is to keep it at some sort of middle ground. All of you should look at a chart called the Laffer Curve which is an illustration of this point.

I should also note that deficits were not an intention of SSE. Don't blame SSE for Reagan's reckless spending.

While I myself am a Keynesian economist (which means I believe in Government regulation of Fiscal Policy), some of the ideas of SSE do not sound that farfetched.

BTW, first.

Every economic theory is flawed, because no one can adhere to it.

You mean that theory that Reagan's first budget director, David Stockman, called (in so many words) bullshit?

And it isn't SSE that Hartman is talking about- it's the transition from an industrial-based to a service-based economy.

"This is the absolute consequence of Reaganomics." - Thom Hartmann

Read the transcript. It's the very last sentence.

was one of the planks of Reaganomics. You can apply supply-side theories to either a service-based or industrial-based economy. SSE merely addresses how you tax the wealth that exists, not the more effective way of creating that wealth.

Read the rest of the transcript. Listen to Hartmann's radio program. He talks about this quite a lot.

The Republicans are working their way BACK to a manufacturing base. This is what this is all about. Destroy the economy, maximum unemployment, and extreme poverty. Unions get busted and people will take any job they can get. The plants will then return to America. More jobs.

Google Center for Downward Mobility. It tells you all you need to know.

money is not power unless you have a lot of it and others have very little of it.

On the face of it a "service-based economy" is going to go bankrupt.

OBVIOUSLY flipping burgers & selling goods manufactured somewhere else was NOT going to sustain the US economy.

And here we are.

"Cheap shit from China" prices equals "cheap shit from China" wages at some point.

Ask the auto workers who now "make too much".

The big lie is that if you give huge tax breaks to the rich they will create new jobs. The truth is it only creates more profits for the corporations, and the tax burden then placed on the middle class. The only jobs created were in foreign countries like China and India, as outsourcing is encouraged. This is what is causing the great divide between rich and poor. In 1979 Bush Sr. called the Reagan economic plan "Voodoo Economics" which is exactly what it is. The one thing unions have consistently done over the years is raise the American standard of living. Break the unions and it will crush the middle class.

You answered your own question. You even said in your own statement that it DOES create jobs, the problem is globalization. If you can take the jobs to the cheapest country, then there is no need to have them in yours. Then the moral dilemma occurs whether you think it's better to give a job to an american or a vietnamese man that needs to feed his family or they die.

Globalization helps developing countries, but hurts developed ones.

You should see him a couple of years ago scoffing at Peter Schiff's predictions of this economic crisis. Starts on this video, at about 1:55.

Those weren't predictions, the only people that didn't think that stuff would happen were expecting growth to negate everything...those people live in fantasy land.

ok

does anybody here actually know, or know OF somebody, who turned down a higher paying job because they'll get taxed more?

But I work at a healthcare facility where I've heard some of the nurses turn down overtime, because after a certain point the take home pay , while not necessarily negligible, isn't enough to entice them to stay for the extra hours. This effect doesn't seem to kick in immediately after they reach 40 hours and 1 second, but after more than 10 hours of OT.

And though I'm not in the payroll department, I think it's the wacky way the organization does the withholding, because I've never worked another job where this seemed to be a problem.

It comes under the law of diminishing returns. I have seen times when additional overtime hours result in less and less pay increase due to being kicked into a higher tax bracket in my paycheck when I used to be an hourly employee.

But turning down overtime due to increased taxation is not the same as turning down a job for that reason, because overtime pay is not a regular occurence, and people who get it are not typically in a position to offset the increased taxes as is someone who receives higher pay on a regular basis.

I'm not aware of such genius.

I will admit I know nothing about economics, but I am pretty good with statistics. Looking at the article about the Laffer curve in Wikipedia, two things stand out in my mind. First, the curve represented there is a bell-shaped curve. There is no likelihood in my mind that the curve is normally distributed. It is most likely skewed towards one end or the other. Most likely, it is skewed towards the high side, as we have seen from the effects of tax cuts on the national debt. There IS an optimum somewhere for the tax rate - I can't hazard a guess as to what it should be, but I can guess that it should be higher than it is now.

Second, in the article it mentions that even renowned economist John Maynard Keynes stated that there was a point of diminishing returns in taxation, and that even Arthur Laffer pointed out that his curve was nothing new.

Reaganomics included the Laffer curve, but I think it went beyond that, in that Reagan did not want to only lower taxes, he wanted to remove "cumbersome" regulations and eliminate the power of unions. There is a reason one of the first things he did was to bust PATCO.

Everywhere that the economics of the Chicago school has been tried, it has been a miserable failure, including here.

"A monolith does not create a critical model."

That's because there is a logarithmic curve of diminishing returns and you are conveniently ignoring this.
Less taxes helps at the point where they can be maximized with the returns and maximized sales collide, but where taxes equal zero.

Don't try to confuse the non-educated here.

Missing the forest for the trees.

Every cycle has an up phase and a down phase.

There have been multiple depressions in the U.S. over the last 200+ years. There have been multiple economic booms over the last 200+ years. Inflation gives way to deflation.

Demand side- inflation
Supply side- deflation

This is as much an absolute consequence of Rooseveltomics, as it is of Reaganomics. The pendulum always swings back and forth. The cycle ia always in the process of changing phase. When Reagan came into office, it was the peak of price inflation. The cycle changed phase into disinflation. Reagan, Bush Sr., Clinton, Bush Jr. were President during that time. Deflation is now beginning under Bush Jr. The cycle from 1930 is being completed.

Take all these people out of the picture and we would still be looking at deflation today. A cycle always completes itself.

A business cycle lasts around 7 years or so on average. There are also political cycles. One wing outlives their welcome, then the other dominates till it outlives its welcome. Tax rates rise, then tax rates fall.

I don't know where Mr. Hartman gets the idea that anything began with Reagan. Ford was non union when it began. Industrialists of the day were upset that Ford was paying his workers as much as he was. Ford wanted his workers to be able to buy his product. So obviously there was a difference of opinion. There was not some centuries old tradition that Reagan was dismantling.

Despite industrializing, the U.S. suffered The Great Depression and the U.S. gearing up for WW2 and becoming producer to the world after the destruction of European and Japanese factories, is what made us largest exporter of manufactured goods and the worlds largest creditor. Over the last few decades, China, the sleeping giant, has gone from destitution to become producer to the world. Completing a cycle, we have gone from creditor to debtor.

Not an absolute consequence of Reaganonmics. An absolute consequence of the completion of a cycle, which would have occurred, even if Reagan had never been President.

Thank you! I am so glad that there is someone else who knows a thing or two on Macroeconomics. It is largely dependant on what is happening to the economy. Like you said, in the 70s, the economy was experiencing a rare period known as stagflation (inflation accompanied by high unemployment). So SSE, at that time, was a decent remedy.

And the Great Depression, that was the time that John Maynard Keynes first emerged as a big name. Before him, there was no such thing as Bidget Deficit. "Spend your way out of the Great Depression" and it worked. Sadly, it resulted in what we have now but cmon: who back then could have predicted that?

Tariffs were imposed by the first Continental Congress, to provide liquidity to the new government, and to promote domestic manufacturing. Being dependent on foreign suppliers was an obvious national security problem -- as it is today.

Reagenonmics destroyed the greatest economy in the history of the world.

Since Reagan the US has gone from the #1 manufacturing, exporting and creditor country, to the #1 importer and debtors country.

keyword "since" not "because of"

lots of presidents have reigned since then

"we have no idea what we are talking about."

and you do?

However, I don't go out of a limb making silly assumptions like the "cycle" would have happened with or without Reagan. I stop taking the previous poster seriously after that.

You can not look at a historical process and make assumptions about the cyclic nature of it after the "fact." It would be like medicine looking at a bullet ridden corpse, and saying that the subject would have died anyways even if he hadn't been shot ast...

If there was a real cyclic nature, then if economist knew what they were talking about, we should have been able to forese the end of a cycle, prepare accordingly, and in the normal case... actually get rid of the need for a cycle altogether.

Instead what we see is that somethings work, somethings don't, and somethings we do OK, and sometimes we fuck up... Thus, I never tend to take economists seriously.

Economics has its usefulness, especially for businesses.

It allows them to see trends and what possibly they can get away with.

Take for instance, supply and demand. Businesses need this so that they know what people want so that they don't have too much of what people don't want.

Take for instance, supply and demand. Businesses need this so that they know what people want so that they don't have too much of what people don't want.

Like the big 3 automakers up to their eyeballs in unwanted Hummers and SUVs? I coulda told you they were fucking up big time back when they unveiled the Pony in answer to Japanese cars. Theories might be OK, but is anyone paying attention? I think it's all 100% greed, ego, and ponzi schemes. (No, I don't have an MBA. Surprised?)

I've heard this argument applied to climate change. Those making this argument also can say that "it's going to happen, regardless" while ignoring the facts that we add velocity to its occurrence, like our contribution to it is of no real consequence. That sounds suspiciously familiar as this argument that this "cycle" is inevitable, like Bush and the Republicans (starting with the "trickle down" nonsense) have not added velocity to this economic quagmire we find ourselves in. And more Thom Hartmann, please, that guy is great to listen to

there is simply not enough data to sustain the claim of cyclic nature of economic processes.

It is as if you experience rain on 2 sundays in a row, and somehow claim that weather has a cyclic nature, and no matter what there will be rain next Sunday. Nope, if you see the data for a whole year... there is no cycle at all, and more like a random pattern that arises from a infinite subinteracions (for illustration purposes, there may be a slight cycle related to the season and what not).

In any case, all that we know is that the conditions in the late 20s and currently are similar, and voila we are seeing a similar set of conditions and results.

I trust Paul Krugman's words over yours any day. He seems to be saying that the massive recession we are in at the moment is the direct result of Bush's economic policy. He is also saying that we need to implement many of the same policies Roosevelt used up until 1936, when he started to worry about the budget deficit. When he tried to correct the deficit, the economy took a big hit that took until WWII to correct.

They have causes that can be traced, and therefore remedied.

I think the entire field is for blowhards and jag off pseudo intellectuals. It was plain to see that housing was becoming too expensive for the average person to be able to afford. The price had reached its peak of inflation, as you say, and now it must deflate. But I believe the two main problems in the country right now is that the upper class of Americans that inherited all this wealth have absolutely no f*cking merit (case in point, Bush Jr.) and ordinary americans have no f*cking safety net. This leads to discouragement, loss of productivity, loss of innovation, loss of everything that made the country what it is.

. .

That's pretty close. The mathematical models (usually multiple regression but there other more sophisticated ones) attempt to uncover linear relationships between a whole slew of factors (unemployment rates, investment, inventories, currencies, commodity prices, etc.) and to predict what will happen for some reasonable period of time in the future. The problem is that, in the end, the wealth of a nation and its economy is about more than quantifiable factors like those listed above. In a word, reality is messy and unexpected events happen. The great contribution of John Maynard Keynes was to acknowledge this and to lay out a framework whereby the government could help its citizenry over the rough times by trying to mitigate the effect of these unforseeable events. That is, Keynesian economics is, at base, an ethical take on the economy. These free-marketers dismiss this approach and preach about the invisible hand and its consequences (trickle down models) but, unfortunately, the invisible hand is sometimes a bloodied fist. The fist is sometime a destructive, uncontrollable factor (e.g., a natural event) and sometimes its market speculation and corruption. Guess what happened since 1999??

how does any of this have anything to do with mortgage backed securities, or default swaps, or making bad loans?

and the belief that the capital market can and will moderate its own greed and become the ever benevolent "invisible hand" if left to itself.
the reason a lot of bad loans were given to people who cannot afford them in the long run IS NOT because low-earning minorities (who also have lower rates of defaults) were helped out by ACORN to buy shelter for themselves.
It's because the mortgages were financialized, and traded around in the stock market, where they don't belong. why? because the idea is that "if money can be made, it HAS to be made". So wallstreet eggheads pressure mortgage firms for mortgages to horsetrade, who then pressure mortgage officers (with the aid of magic deregulation!) to hand out loans to anybody who has a pulse (or even if they don't), all of course with the assumption that high-paid economist pseudointellectuals made that home prices will rise infinitely. So no more bullcrap jargon about "SSE" or "business cycles". It's greed, left alone, destroying itself.

"A business cycle lasts around 7 years or so on average. There are also political cycles. One wing outlives their welcome, then the other dominates till it outlives its welcome. Tax rates rise, then tax rates fall."

The Democrats held the reins of power for a lot longer that 7 years before the Republicans got control of Congress and the Senate.

Sure! Wink! Wink!

you're not taking into account that we are industrialized and that the markets are global now
as long as undeveloped countries can provide cheap resources and labor, we will be an importer, has nothing to do with currency valuation

that someone puts the GOP on its correct context: the enemies of the middle and lower classes.

Damn right this is class warfare. And I hope people are about done trying to walk on eggshells regarding that fact.

Great to see Mr. Hartmann providing the correct historical context.

the social conservative patriotic church goers are on the same side as the billionaires? class warfare? the guys on wall street vote the same as the poor construction laborer or ditch digger. it's insane, joe the plumber votes right wing just like the jet setters.

is acknowledgment of the problem.

Damn straight it's class-warfare. And this is an arena where war is an appropriate term, as opposed to its use in the invasion and occupation of Iraq.

http://en.wikipedia.org/wiki/Plutocracy

These guys are smacking their lips, waiting for the ultimate melt-down to solidify their power. Destroy any semblance of collective action, make it a bad term, especially those damned unions - that's their battle cry and it was evident in the Senate's victory.

Plato's decay of government ideas (and predictions) are what they believe in and so should we.

i

Giving a virtually bankrupt company like GM, loans or bailouts, going to save jobs? GM has stated it is shutting down North American production for at least a month (some Canadian union members say 6 weeks)...so how does loaning them money, change their company around and save jobs?
For jobs to be saved, and the business to turn around, sales must increase. Problem is, this isn't the only industry hard hit by this mega recession. So, who's going to buy? Nobody.

I listen to Thom everyday on my way home.
There is nothing more Relaxing than listening to
him Nail those Conservatives with there own FAILED
Record.

Thom Hartmann is a very smart cookie. Nothing in economics is an absolute. There are always variables. The problem now is that the Republicans since Reagan have been so extreme that there is no middle ground left. The ebb and flow is probably a good thing but you can see how extreme the Republicans are with just what they are doing this past week, month, year, eight years. maybe in the past the auto unions demanded too much but now the Republicans are demanding that they put themselves into semi poverty. Who do they think are going to buy anything when they want to make everybody so lower income they can't afford it. Ford may have been non union when they started but the workers still made enough to buy the product. I your own workers cannot afford to buy what they produce in a company so dependent on middle class affordability how do they think they can survive. I like the idea of making us a manufacturing economy again but it will take time.

Slight aside from the discussion, though somewhat related. This is one of the greatest quotes I've seen come out of the discussion of Republican union-busting:

Auto Union Official Slams Vitter: "He'd Rather Pay A Prostitute Than Pay Auto Workers"

Maybe even more cogent would be "Vitter would rather pay prostitutes a higher hourly salary than autoworkers."

Dems, take it and run with it!

I really think it's time to stop playing softball with rightwingers and hit them where it's real and hurts.

=====

I'd like to see America become a manufacturing nation again, too, to rebuild the middle class. But that would mean a government setup whereby the companies who've shipped their manufacturing operations abroad would earn more money by keeping them at home.

With corporate greed, how that would happen is anybody's guess. The only thing I can think of would be a tax equivalent to American jobs lost through such a move, and the loss of all other government benefits. Tariffs/taxes imposed on the goods brought back into the US equal to what other imports are subject to.

When the American PEOPLE drank Reagan's "Trickle Down" "Deregulate" "Government is the Enemy" kool-aid the die was cast.

I say PEOPLE because the Democrats thought the only way they could get back into power was to become Reagan Lite, aka Bill "I never had sex with that woman" Clinton.

When Reagan ran I kept telling my friends - "Listen to him, listen to him he's crazy. Americans can't be stupid enough to vote for his ideas!" Boy, was I wrong.

America is the only country in the Western World where the working class and the middle class ROUTINELY and MASSIVELY vote against their own interest. Democracy is truly wasted on these people.

Trickle down is bullshit. trickle up is the only way for everybody to win.

Durn tootin'. Hey, fatcat bosses, pay ME more and watch me give that money to YOUR corporations for stuff I need or want. Pay YOURSELVES more and sit on your friggin' yacht and watch your company go down the tubes. Your call!

My Grandmother lived through the first Great Depression (she was in her 20's) and she saw this coming back in the '80's as they were robbing her money market cds that she and my Grandfather worked for their whole lives to buy into, and she was no economist.
She saw the same excesses and dereg in the 80's as back then.

It's refreshing to have some real progressives on cable tv who understand the thievery that has been going with republicans and can articulate that to a dumbed down public. We need much more of this kind of honesty and clarity to get rid of the crooks in government.

economics so this theory of mine is probably crap, but....

I think the whole plan of the corporations and the congress who are bought by them is to lower the wages and benefits of U.S. workers so that we can compete in a global economy WITHOUT having to go to the extra expense of building foreign factories and importing products made in China or India for example.

In fact I will go so far to say that I think some have a "global wage" idea that will negate all the job shifting from country to country.

But what the hell do I know. It's just a feeling I have.

The Corporations go where the cost of doing business is the cheapest.

Labor is part of the cost, environmental protection is another cost.

When China is the cheapest place for their factory, that is where they go.

When costs in China increase they go to Vietnam. Or wherever.

When the present calamity unfolds in full, the cost of doing business in China is going to be much greater.

We are going to be correspondingly more impoverished.

Factories may come here again when wages are on par with China.

Maybe they will provide dormitories for the workers, 20 to a room as they do now in China.

You will not buy a house with a Chinese base wage.

That is our future, we are trading places with the Chinese.

It will not be very popular.

To Mr. Hartmans credit I have to wonder why it has taken the American people this long to figure out that they have been systematically screwed by both parties for years? As Mr. Hartman points out, every administration both Republican as well as Democrat since Reagan continued down the road we find ourselves in.
The founders of our country weren't idiots and spilled their blood so as to create the greatest country on the face of the earth. Maybe its in a politicians DNA to turn into greedy power grabbing fools where money and profit means more than doing what's right for all the people instead of the richest few.
The answers have always been there for us as laid out by the founders. The Constitution does not call for a Central Bank ( the Federal Reserve ) but rather a US Treasury with dollars backed by something of value. Gold and silver.
Perhaps Curchill was right. Americans can be relied upon to do the right thing after they have exhausted every other option. Mr Hartman knows of what he speaks and our road map out of this financial mess can be found in the laws that were created on our behalf as the founders understood very well what would happen to our country if we were to allow the control of money to be taken from the people and given to private bankers. Many might say you get the government you vote for. If true, we are just as guilty in voting these crooks into power as the crooks themselves.
A bailout without transparency. A Federal Reserve that spends our tax dollars yet won't tell the tax payer how or who is getting our money and a Congress that is just about as worthless when it comes to doing the peoples business as tits on a bull. Bad enough Congress isn't doing its job, it has the gall to look the other way until all hell breaks loose. The press seems to also be in on this crap by selectively hitting the airwaves about the big 50 billion dollar Madoff scandal, but barely a peep about the bigger scandal orchestrated by none other than Robert Rubin of Citibank to the tune of 122 billion. if interested, the class action lawsuit was filed Friday in Federal court in New York.
A friend who still has a job on Wall Street put the current situation into perpective for me. When the head of the fish stinks, so does the rest of it. If you break the law, regardless of ones stature in life to pay a price by going to jail when convicted by a jury of your peers. I sincerely hope Obama has an ace up his sleeve, but he must know something for him to keep saying that it's going to get a lot worse before it gets better. I hope those waiting with their pitchforks and torches losing their homes and jobs can be patient that long. It's going to be a long cold winter.

read this then, eh?

Fed Refuses to Disclose Recipients of $2 Trillion

I'm only reading McClatchy and Bloomberg while this is going on, seems to be the only MSM I can trust right now

WOW

Just WOW, finally someone telling the truth.

tells the truth every weekday, Monday-Friday on Air America Radio - check him out on your local station, satellite, or internet stream! I've been listening to him for years and has written over 20 books you may be interested in.

I agree with your comment. I always come away from listening to his program learning something new or at least looking at an issue from another point of view to better understand the whole picture. Thom Hartmann is one of the best.

Obama may already be onto Hamilton's thinking, since he referenced it in the opening paragraphs of his speech at Cooper Union in March. Here's a link:

http://www.nytimes.com/2008/03/27/us/politics...

That may explain why many of the right were pushing bankruptcy? The big shots at Hubris, according to the clip above, were ®. What better way then to shake off a collective group of people instead of moving operations, from a logistical and financial perspective.? Can Hubris keep control of their infrastructure if they fail too kick in some cash? Would a bankruptcy allow them to recover and to re-tool with an sycophant workforce and or a staff that holds an servile disposition? So many angles....

Yeah, but we got a $100 tax cut from the GOP! So just forget the whole thing, mmkay?

Thom Hartmann's brain is so powerful as to be frightening. I'm surprised he can't move things around like one of the X-Men. Put him and Maddow in a room together and the lights would dim from all the brainpower messing with the electrical grid.

There's only one small point I'd like to make to Thom. His beautiful manufacturing story/plan is not gonna save anyone because it's just as unsustainable as all the crap we produce today. Of all the shit people put out in the market, we only really need about a percent of it. All the rest is simply unnecessary. What Thom is saying is: "We should be China", but what we should be saying is: "We don't need (a) China". All you need is... a brain that functions....

We NEED well-made appliances that last with minimal repairs, autos, hospital machinery, manufacturing machinery itself -- watch PBS sometime when they run programs on how various items are manufactured, from candy to tricycles to X-Ray machines. Somebody has to create and manufacture the means for producing quality products efficiently.

We need a return to skilled craftspeople in America. As much as 30 years ago, companies who needed them were importing Europeans to do that work because so few Americans were entering those jobs, partly because of a lack of apprenticeship programs in industries and the shift to computer technology jobs. The pay was excellent, and these jobs are key to making American products top-notch.

This website is becoming more and more partisan with time. I used to come here for objective opinion, but this is just partisan ramblings and intellectually dishonest dribble.

What is happening to us happens to all industrialized countries with time, no country in history has been able to stop what happens next. Whining about Reagan surely isn't the solution, it's just lip-service.

So you don't think a discussion about Reagan's economic policies, including deregulation and lowering tax rates for the wealthy, that have been continued with a vengeance by conservatives is useful in understanding the historic background of where we are today?

Are you saying instead that if someone murders a 70 year-old man with a blow to the head that it wouldn't matter because he was going to die of old age anyway?

Big problems have big histories and it is critical to understand more than what's happening today if we are to find solutions. Protesting the wisdom of conservative economic principles championed by Reagan is not whining. It's part of a shifting consciousness about forces at work in the economy.

btw, Laffer (of Reagan's Laffer Curve) has stated several times on national television that he voted for Bill Clinton both times. And Clinton never proposed or championed a Supply-Side Economic policy.

Even Laffer understood the limitations and potential risks of his own proposition. Which, unfortunately, neither Reagan nor any Reagan wannebe since him has understood.

[Deleted. Spam-Sitemonitor]

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