One More Reason to Shrink Government

The Antiplanner used to think that a sure sign of a centrally planned economy is when the capital is the wealthiest city in the country. So what does it say about the United States when Washington DC has the highest median income of any metropolitan area in the country?

I learned this little tidbit from a rather disturbing story about Great Falls, Virginia, where owning a “$2.8 million home with its own elevator, wine cellar and Swarovski crystal chandeliers” is a sure sign of being a government contractor. A few other interesting points:

  • More than half the residents of Great Falls earn more than a quarter million dollars a year (what do you suppose they think of Obama’s soak-the-rich tax proposals?).
  • The District of Columbia has the second-highest disparity between the pay of high- and low-wage workers–while New Jersey is number 1, Virginia is number 3 and Maryland number 7.
  • Federal contracting dollars to the DC area have increased from $4 billion in 1980 to more than $80 billion in 2011.
  • “When asked if her neighbors had felt the impact of the recession, [the owner of the $2.8 million home] smiled quietly and said she didn’t think so.”

When government gets big, a few people get rich, and the gap between the rich and the poor widens. Do you suppose that’ll convince some Democrats to support federal budget cuts? Not too likely.

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37 thoughts on “One More Reason to Shrink Government

  1. metrosucks

    When government gets big, a few people get rich, and the gap between the rich and the poor widens. Do you suppose that’ll convince some Democrats to support federal budget cuts? Not too likely.

    I think the only reason Democrats even pretend to support any cuts is to ram through their real agenda, which is higher taxes on the rich. You know, class warfare.

  2. C. P. Zilliacus

    The Antiplanner wrote:

    The Antiplanner used to think that a sure sign of a centrally planned economy is when the capital is the wealthiest city in the country. So what does it say about the United States when Washington DC has the highest median income of any metropolitan area in the country?

    That’s a fair question, Randal.

    And I say that as someone who was born in the District of Columbia, and have lived nearly all of my life in Maryland relatively near the D.C. border.

    But what’s especially curious about that story, featuring Great Falls, Virginia, is that this would be the very same Commonwealth of Virginia where many of its elected officials gain those offices by bashing the federal government, though they are careful not to bash some of the large government agencies that locate on the soil of the Commonwealth, including the Department of Defense (in the form of the Pentagon, plus several large Army, Navy and Marine Corps bases), the Central Intelligence Agency (located near Great Falls, Va. in Langley), and the massive National Reconnaissance Office.

    Virginia is also home to one of the larger National Parks in the East, in the form of Shenandoah, the northern section of the Blue Ridge Parkway; and the enormous George Washington and Jefferson National Forests.

    Virginia was happy to have the federal government build both National and Dulles Airports on its soil, and has gladly accepted billions of federal dollars to build Metrorail to National, and about a billion more to extend rail to Dulles.

  3. Andrew

    More than half the residents of Great Falls earn more than a quarter million dollars a year (what do you suppose they think of Obama’s soak-the-rich tax proposals?).

    Probably not a whole lot. The “soak the rich” proposals mainly center around the treatment of the favored income categories, not extraordinary rate increases. I wouldn’t think a government contractor would care very much beyond the fact that more tax money probably equals more government contracts.

    When 100% of your income comes from the government, would you care wether you have to pay 25% or 30% back as long as more taxes = more spending?

  4. LazyReader

    You can argue the one thing government does best is spend. So naturally those with the talent pool will draw themselves to an area where spending and spending decisions are ubiquitous. It does make you wonder what they spend it on? John Stossel asked the question before to a group of accountants at a convention meeting. He told them that in the last 20 years the Defense Department has been incapable of producing a accurate accounting record much to the amusement & laughter of the accountants. Why do we have an NSA, NRO, and CIA, & DIA at all. Intelligence spending has tripled in the last 20 years even though the Cold War is over and the CIA budget is kept in secret even though the Constitution requires that money drawn from the Treasury require accounting and receipt and public expenditure be public. Intelligence spending has suffered from the kinds of waste, fraud and abuse that are inevitable when secrecy prevails. CIA spending alone has ballooned 80 percent in real dollars since 1980, even though the demise of the Soviet Union and independence of it’s satellite nations vastly reduces intelligence needs. We no longer require Jason Bourne running around Eastern Europe. Satellite share time is precious, so rather than compete for intelligence time, the NSA now has it’s own satellites. Even with independent resources the agencies still suffer from information overloads, organizational chaos and confusion, and frustration over jurisdiction regarding who investigates what, not to mention mountains of reports and paperwork that nobody reads.

  5. bennett

    “I learned this little tidbit from a rather disturbing story about Great Falls, Virginia, where owning a “$2.8 million home with its own elevator, wine cellar and Swarovski crystal chandeliers” is a sure sign of being a government contractor.”

    Context is everything. What services are these people contracting for? I’m essentially a government contractor (planning consultant), live in a 1,000 sq/ft house, drive a 1995 Honda accord and eat more goddamn peanut butter then I care to admit.

    Something tells me that the contractors in Great falls aren’t contracting with the FTA. I think if we looked at what these people were profiting off of you’d see more democrats than republicans ready to bring down the axe.

    “Do you suppose that’ll convince some Democrats to support federal budget cuts?”

    Not if the cuts are only to social programs for the poor. Obviously these people in Great Falls aren’t on welfare, social security or medicaid. Let’s start by cutting their contracts and keeping entitlements for a little while.

  6. C. P. Zilliacus

    bennett wrote:

    Something tells me that the contractors in Great falls aren’t contracting with the FTA. I think if we looked at what these people were profiting off of you’d see more democrats than republicans ready to bring down the axe.

    My guesses would be the CIA, the NRO, and Defense Department agencies generally, including the NSA, even though Fort Meade, Maryland is rather far from Great Falls, many contractors doing work for the CIA also have business with NSA, and prefer to locate, if possible, in Virginia instead of liberal Maryland.

  7. Dan

    I think it is a worthless indicator without knowing what industries are making the money. Is the elevatored house an elected official, or is it a defense contractor skimming off the top because the Pentagon famously can’t keep track of the money? If this is an argument to cut the military budget and bring our folks home, disregard and I’m with ya.

    And I think we’re far from a centrally-planned economy when we are still in the effects of a second bubble in a decade, this latest one caused by FIRE and their shenanigans allowed by deregulation!

    When government gets big, a few people get rich, and the gap between the rich and the poor widens.

    Um, no. The conclusion doesn’t follow from the premise.

    Compare the map of Gubmint expenditure by country. Then compare the map of the Gini Coefficent. Lots of places where this doesn’t match. Sorry. The italicized is generally not true. Especially not here, as our gap is increasing.

    DS

  8. bennett

    “If this is an argument to cut the military budget and bring our folks home, disregard and I’m with ya.”

    That’s part of it. My point is that today’s post points a finger a democrats. The claim is that government is too big, and that the gagillionare mansions of government contractors in Great Falls is proof. So what is the republican response? Cut entitlements for the poor, cut FTA grants, cut unemployment assistance, cut teacher pay. How does that do anything to solve the income gap? Answer: it doesn’t, it makes it wider. It also doesn’t do anything to substantively reduce the deficit.

  9. Frank

    Yes, cut the military, close down all our foreign bases, and bring all our troops home. We’ll save trillions.

    No. Deregulation was not to blame for the housing bubble.

    I’m still looking for The Antiplanner to review Peter Schiff’s “Crash Proof: How to Profit from the Coming Economic Collapse”, which was written BEFORE the popping of the housing bubble, a bubble caused by below-market interest rates artificially manipulated by the Federal Reserve.

  10. Andrew

    Scott:

    How about the 50% unemployment rate for Blacks in DC?

    DC unemployment is 10%. If the city is half black and half of them are unemployed, is the white/asian/hispanic unemployment rate -30%?

  11. Scott

    Look at the stats.
    You insult yourself to go into negative percent. WTF do you mean by “-30%”?

    Part of the point is that why are there not more HS diplomas (earned) in DC & people working. Obuma for Blacks? Besides his ideology (so messed up), he kinda wants people to work & be educated, kinda. He his for breaking laws & releasing some prisoners.

    Suppose you have a business: hire an 18+ yr. old Black w/out a HS diploma?
    How would he sound & carry himself? Thuggish, inarticulate, dumb?

  12. OFP2003

    Well, I read the article, and many of the questions above were answered in it.

    The people interviewed had built companies and then sold them for Millions$$$ Or they were the very tip top management of HUGE companies. The people I know with $$Millions$$ in Great Falls are former AOL folks, Innovative Tech folks, and professional athletes.

    A simple analysis of the situation would ask questions like: “How does their personal wealth compare to their corporate value?” If they spent 20 years building a $25Mil/Year business are they worth $100M (the price they sold the company for)?? If they managed a $10M annual profit off of a $100M contract are they worth $500K/year?? The government is huge, spending is huge, with a lot of people up at the top of the salary pyramid.

  13. Andrew

    Scott:

    WTF do you mean by “-30%”?

    DC is 50% white/asian/hispanic, 50% black.

    If the 50% blacks are 50% unemployed, they account for a 25% points of unemployment in the general population of DC. Right? .5*.5 = .25

    If the actual unemployment rate is 10% for the general population, you need a negative unemployment of -30% among the 50% white/asian/hispanic part of the population to bring the actual rate to 10% [.25 -.5*(-.3)]=.1 if blacks are 50% unemployed. Its simple math, and you embarass yourself with your innumeracy by not being able to figure that out.

    Presumably a -30% unemployment rate means greedy white people are holding two jobs. (/sarcasm)

    Look at the stats.

    Okay.

    http://www.dol.gov/_sec/media/reports/blacklaborforce/

    The actual black unemployment rate in DC is 17.2%.

    So you were only off by 32.8 percentage points, or a close to 200% error. That sounds about right for your assertions on here.

  14. Andrew

    Scott:

    Suppose you have a business: hire an 18+ yr. old Black w/out a HS diploma? How would he sound & carry himself? Thuggish, inarticulate, dumb?

    You mean kind of like you, with your ungrammatical, illiterate and innumerate rants such as this???

    You insult yourself to go into negative percent. WTF do you mean by “-30%”? Part of the point is that why are there not more HS diplomas (earned) in DC & people working. Obuma for Blacks? Besides his ideology (so messed up), he kinda wants people to work & be educated, kinda. He his for breaking laws & releasing some prisoners.

    I suspect that a random black high school dropout I pulled off the street here in Philadelphia could at least match your low standards of articulation.

  15. Andrew

    Scott:

    Suppose you have a business: hire an 18+ yr. old Black w/out a HS diploma? How would he sound & carry himself? Thuggish, inarticulate, dumb?

    Scott, do you know, socialize with, or have you ever worked with any black people with high school or lower education?

    How would you know they are thuggish, inarticulate, and dumb?

    Do you have to work at being that racist, or is it something that comes natural to you?

  16. Andrew

    Randall:

    Scott writes:
    Suppose you have a business: hire an 18+ yr. old Black w/out a HS diploma? How would he sound & carry himself? Thuggish, inarticulate, dumb?

    Seriously? Do you really want racist drivel like this posted to your blog?

    Is this blog now associated with Stormfront.org?

  17. Scott

    I did not type something of racism.
    I did not characterize all of a race as something.
    I did not state that a decision should be made based upon race.
    I did not even state points about uneducated, but posed questions.

    The facts are that more than 36% of Blacks dropout of HS, double the average, and many of them are inarticulate. In large cities, the Black dropout rates is often 50%+.
    In general, the Black family & employment was better before the gov (1960s) started subsidizing the poor, the unmarried & such. And LBJ was vehemently against the Civil Rights Act in the the 1950s.

  18. Frank

    Andrew said: You mean kind of like you, with your ungrammatical, illiterate and innumerate rants such as this???

    Andrew, here’s yet another cliche for you: don’t throw stones if you live in a glass house. Your comments on this post are peppered with grammatical gaffes.

    If you feel like another commenter is spewing racist comments (although, “prejudiced” or “biased” are more accurate adjectives for Scott’s comments), then stop engaging that commenter.

  19. Craigh

    they are careful not to bash some of the large government agencies that locate on the soil of the Commonwealth, including the Department of Defense (in the form of the Pentagon, plus several large Army, Navy and Marine Corps bases), the Central Intelligence Agency (located near Great Falls, Va. in Langley), and the massive National Reconnaissance Office.

    I wouldn’t expect conservatives to bash those particular agencies, defense and national security are popular federal expenditures on the right. Virginia’s elected officials tend to criticize Washington for heavy-handed edicts [Obamacare] that abridge citizens’ liberty.

  20. Dan

    Funny aside:

    When government gets big, a few people get rich, and the gap between the rich and the poor widens.

    Stewart tonight used the Gini Coefficient I used above in 7 in a slightly different way than I did. Surely anyone reading Randal’s funny statement got a much bigger laugh when they saw Stewart’s piece on taxing the rich…

    DS

  21. Frank

    Also gotta love Stewart for coming to Ron Paul’s defense. Might not agree on everything, but there are some big commonalities, like ending the war machine. Shrink the MIC and topics like this post, and the one on BLM, become fiscally trivial. But shrink the MIC and what would happen to DC?

  22. Scott

    I left out 1 word, about 50% DC Black unemployment — teenage. The article:
    http://cnsnews.com/news/article/average-teen-unemployment-rate-dc-501-an-1

    And similar:
    http://www.therightscoop.com/wreckovery-summer-the-sequel-crushing-unemployment-for-teenagers-especially-black-teenagers/

    http://www.foxnews.com/us/2011/07/28/african-american-middle-class-eroding-as-unemployment-rate-soars/?test=latestnews

    Part of my point is that when there is a large segment of society (Blacks) who drop out at 2-3 times larger margins & are incarcerated at about 3 times the average, things need to be analyzed, such as their sub-culture, motivation, family units & the spokesmen (Jackson & Sharpton) whom are racist in their rhetoric.

    BTW, I would like Herman Cain do be on the 2012 ticket, and 2 of my favorite economists are Walter Williams & Thomas Sowell. I also like Allen West & Shelby Steele. So, I am not against races, but look at content & facts.

  23. bennett

    Scott,

    I wonder if the racial correlation you seek is not the best in terms of your analysis. Socioeconomics may be a better indicator of issues regarding “sub-culture, motivation, family units & the spokesmen,” issues. For example do you think there is a great disparity between families living below the poverty level and behavior based on race?

    I personally don’t think so. There are just as many white “thugs,” out there although their representation in terms percentage of total white people is less. There is a correlation to race, but the correlation to access to quality education and poverty status is much stronger.

    This reminds me of some work I’ve done down here in TX. When doing demographic analysis TxDOT wants me to include “race” in the transit dependent analysis. I’ve had to fight hard against this because race actually has nothing to due with transit dependency. Yes, there is a large portion of blacks and Latinos that are transit dependent in TX, but we already count them with the analysis that we do (poor, autoless households, etc.). And, whether or not the intent of TxDOT is to be racist doesn’t matter because the perception is that they are being racist.

    This is the place you’ll find yourself in. The fact that blacks are 2x more likely to drop out actually has little to do with their race. In fact you need to compare apples to apples. Poor blacks are about on par with poor whites in terms of educational attainment. I don’t think you’re a racist, but your short-sided analysis will have you painted a racist every time. Race matters, but not in the way you think.

  24. Scott

    bennett, Good points.

    An element often missing in analysis for different results among races is why are there high disparities in school achievement, crime, diction, families & such. Bill Cosby mentioned it & was chastised.

    Have you seen stats for income on immigrants? Over time, many earn higher than the White average & ESL (English as 2nd language) applies to most, meaning that they have to even learn more than those born here.

    I agree that not much emphasis should be placed on race, but when there are claims of racism in hiring & such, the real facts, including lack of desire to learn & work, for many, should be looked at.

    Have you seen stats for White racism in college acceptance (aka affirmative action)? Fewer of those minorities graduate w/a bachelors.

    I have not mentioned genetics, which is not even racist. There are differences in races. Look at the NBA & the NFL. Why is there a ~5+ times over-representation by Blacks? (Mostly from college, by scholarship — good for them — but some are inarticulate).

    Why are sub-Saharan countries poor, except for South Africa, which had the most & longest impact of colonization & Western development. Apartheid was still wrong. Minerals do play a big role there, but there are different results for Arab countries with only 1 resource & following the Koran & dynasties.

  25. Andrew

    Scott and bennett:

    I don’t think you’re a racist, but your short-sided analysis will have you painted a racist every time. Race matters, but not in the way you think.

    When you bring up race as if someone’s skin color is relevant for something that really has nothing at all to do with skin color, you are a racist. You are using skin color as a proxy short circuit to an actual explanation.

    Having more or less melanin in your skin is not a cause of dropping out of school or being unemployed. Right? Right??? Therefore, it has no relevance in the discussion.

  26. Andrew

    Scott:

    I have not mentioned genetics, which is not even racist. There are differences in races. Look at the NBA & the NFL. Why is there a ~5+ times over-representation by Blacks? (Mostly from college, by scholarship — good for them — but some are inarticulate).

    Race is not genetics. Hitler, for example, apparently shared a Y-chromosome type (E1B) with the Somalis. No one would mistake Hitler for a black African, even thought he quite clearly had a much more direct realtion with them than most Europeans.

    Why are blacks overrepresented in NFL and NBA and whites in the MLB and NHL? Group interests is one reason, and racial bias in coaches selecting elite level players is probably another. Obviously whites make up the majority of high school level football and basketball players, but not beyond. Since the choice of players at the college level rests with coaches, we should being by looking at why Division I college coaches choose overwhelmingly black football squads, and especially why whites are rarely or never used in certain skill positions like Cornerback or Running Back, or why blacks are rarely used in other skill positions like Center, Kicker, or Tight End. Overt bias is the simplest answer for highly differentiated results, because obviously at the high school level, there are black and white Division I level players on many teams in all positions.

  27. Sandy Teal

    I hope everyone is intellectual about the race discussion here.

    Personally, I find it is brave and practically impossible for a white guy to even engage in these discussions, especially on college campuses. No matter what is said, if you are a white male, you are just incredibly vulnerable to being labeled as racist and there is no valid defense by a white guy.

    College is now the most heavily censored time of your life.

  28. Scott

    Andrew,
    Obviously there are differences in the performance & results of different groups of peoples. Culture, upbringing, family & many other factors are often the causal.

    Is racism treating a person negatively based solely on color? I certainly do not advocate that, nor treating an individual based upon the group average.

    Race is not genetic? So, skin pigmentation & various other factors (nose, hair eyes, etc.) are derived how?

    You think that athletes advance NOT based on skill & that coaches make choices NOT on players’ ability?

    Sandy, Yes, there is a double standard on discussion about difs in races.
    It is hard to mention difs in races.

    If gov was more limited in not trying to “help” the poor & minorities in favoritism & by taking from others, there would less poverty, better family units (married & responsible) & much less mention of race, but just individual humans.

  29. Andrew

    Scott:

    Is racism treating a person negatively based solely on color?

    That seems reasonable, if you would also add that it is showing hatred towards people based on their skin color or disparging people because of their skin color.

    Race is not genetic? So, skin pigmentation & various other factors (nose, hair eyes, etc.) are derived how?

    Race is a perfectly valid taxonomic concept of biological species that does have a partial genetic basis as well as an observational one. In orinithology, bird species are broken down into races based small differences in coloration of feathers, location of habitat, behavior, song (speech), and other factors.

    I think human races are best thought of as very large extended and inbred family groups genetically, acknowledging that there is genetic overlap between neighboring groups. This is rather like the way medical science treats us today – looking at both family history and larger shared group traits of our ethnic origin for help in diagnosing and treating patients. The natural tendency of people in the absence of force (which is most of the time) is to marry and have children with people with a similar background to themselves (especially locationally and speech), in that way producing what we now call tribes/ethnic groups through purposeful genetic isolation and genetic drift. As far back as Tacitus, he was able to correctly peg the genetic origins of the British by observation of group traits – the Cornish, Welsh and Irish from Iberia, the Scots from Norway, and the “English” (meaning the southern and eastern coasts), from the opposite coast of the continent between Belgium and Denmark. Y-Chromosome studies today have confirmed what Tacitus wrote 2000 years ago.

    However, many so-called racial marker traits are shared across disparate groups and so cannot be racial as people normally think of them. Black skin is found in sub-Saharan Africans, Dravidian Indians, Australian Aborigines, and Melanesians. Brown eyes are found among Africans, Europeans, Chinese, American Indians, etc. When people start talking about black and white and brown and yellow races, they are dealing with groups that are far too large and monolithic to have any meaningful genetic definition beyond “I know it when I see it!”

    I also suspect if Europeans were not observing humanity in this classification, but another species, “white” people would clearly be broken up into four or more origin groups given the enormous genetic variance on display – a dark haired/light eyed group from western Europe, a blonde haired/light eyed group around the Baltic Ocean, a red haired/freckled skin group from extreme NW Europe, and a black haired/dark eyed grouping in the Meditterran littoral streching into Asia. There are similar sorts of variations among other “races”.

  30. Andrew

    Sandy Teal:

    it is brave and practically impossible for a white guy to even engage in these discussions, especially on college campuses. No matter what is said, if you are a white male, you are just incredibly vulnerable to being labeled as racist and there is no valid defense by a white guy.

    Lets get real. Most white college guys have a pretty good tendency to stick their foot in their mouth on this topic, and most of them have no real experience in the world outside of their suburban bubbles. Their knowledge of race and racial issues is crap spewed out in the media, images on TV shows, and the handful of black suburban kids at their high school they may or may not have a passing familiarity with. I’d be much more interested in hearing about race from poor or rich white kids from cities or whites from Appalachia and the rural South – people who have actually interacted with lots of people from other races or who share a lower socio-economic condition and a more deprived educational background with many minorities than the opinions of yout typical white suburbanites. What do they possibly have to contribute to a discussion that is of real value?

  31. Frank

    Love the hasty generalization, which is of course unsupported, about “white college guys”.

    And “race” in human context is a completely non-scientific concept:

    http://www.jstor.org/pss/2739576
    http://findarticles.com/p/articles/mi_m1272/is_2647_127/ai_54367258/
    http://www.aaanet.org/stmts/racepp.htm

    “With the vast expansion of scientific knowledge in this century, however, it has become clear that human populations are not unambiguous, clearly demarcated, biologically distinct groups. Evidence from the analysis of genetics (e.g., DNA) indicates that most physical variation, about 94%, lies within so-called racial groups. Conventional geographic “racial” groupings differ from one another only in about 6% of their genes. This means that there is greater variation within ‘racial’ groups than between them.”

  32. Scott

    You guys have expanded this discussion too much to have relevance.
    What do Australian natives have to do with U.S. sub-cultures for groups, based upon various factors? Then agreeing that race is genetic, but then going into the many skins pigmentations, which are from various parts of the world 1,000s of years ago? All humans started in Africa 100,000-200,000 years ago. Then migrated the globe. So what?

    My original [slight] comment was focused neither on race, origin nor genetics, but upon, but how average results, when measured by color, have factors often over-looked, such as higher rates of dropping out of school & accidental children w/out stable married parents.

    If you guys really want a discussion, then address points I made or specifics — not broad generalizations. If you really want to go to wide swaths of color — Look at the development in Caucasian nations (Eastern Europe was held back by the USSR) & then look at the Brown-Mestizo (S of US) & the Black-African nations. There are a few developed nations in Asia, because of British or US help.

    None of that econ excelling is necessarily due to color, but culture & society is huge.
    Western Europe & the US has forgotten the reasons for success. Riots & a worse recession will occur soon in the US, no matter who’s elected, even Ron Paul or Gary Johnson. A stalwart conservative will not do, but regardless, there will be too much blockage by Congress & the continued public mass ignorance, helped by the MSM.

  33. Sandy Teal

    I guess Andrew is proving my point. The PC crowd on college campuses want to deny the value of white students’ views about race.

    I think everyone has equal value in talking about race. (And moreover, it is fun to use PC code words against PC campus police.)

  34. Frank

    “Look at the development in Caucasian nations …& then look at the Brown-Mestizo (S of US) & the Black-African nations. There are a few developed nations in Asia, because of British or US help.”

    “Help”? Colonialism is “help”? Wow.

    The non-European world has suffered because of being colonized by the European world.

    Basic history.

    back to /ignore

  35. Scott

    I did not mention colonialism & was not specifically referring to that.
    Look at history?
    Singapore & Hong Kong are very developed because of the British.
    Same with South Korea & Japan, because of the US.
    Macao because of the Portuguese.
    South Africa has development because of the Dutch.
    How would Australia & NZ be without the British?
    How would the US & Canada be without the British & French?
    How would the Americas south of the US be without the Spanish & Portuguese?
    Even many less developed former colonies are better off now than otherwise because of colonial development. Know history? When African nations gained independence in the 50s & 60s, much of their development stagnated or reversed.

    The places that were colonized were more than a century behind. Are you blaming European powers for that?

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