Can New Federal Policies Get Employers Hiring?
NEAL CONAN, host: This is TALK OF THE NATION. I'm Neal Conan in Washington. Some argue we need to cut spending, eliminate regulations and cut taxes. Others say we should hike taxes to invest in public works and retraining programs. Tonight, President Obama announces his plan to create jobs in a speech to a joint session of Congress.
Two Republican candidates already rolled out their proposals, and jobs played a major part in last night's GOP debate. Today we want to hear from those of you who actually decide whether or not to hire new workers. What can the government do to make you start hiring again? Is there a policy change that would make a real difference?
Give us a call, 800-989-8255. Email us, firstname.lastname@example.org. You can also join the conversation on our website. Go to npr.org. Click on TALK OF THE NATION.
Later in the program, Muslim-Americans 10 years after 9/11, but first, creation of new jobs. And let's see if we can begin with a caller. Let's go with Frank(ph), and Frank's on the line with us from Chapel Hill, North Carolina.
FRANK: Hi, thanks for taking my call. I actually own a retail business, and we're actually growing and hiring, and we're doing just fine. The biggest problem that I have is the way the tax system is set up for small businesses. Most people don't - may not understand that small business owners are taxed personally on all of the profit the business makes.
So while I'm growing my business, I'm trying to grow as fast as I can, I get taxed on the money I make even if I reinvest that money in the business. So most years, I end up paying significantly more in taxes than I actually pay myself.
CONAN: So a change to the tax code would make a big difference for you.
FRANK: It would make a very big difference if - because right now, small business owners are essentially penalized for reinvesting in their own business.
CONAN: Well, as opposed to larger ones who get to write that money off.
FRANK: Right, right, and they also retain earnings, right.
CONAN: And is anybody, as far as you know, talking about that?
FRANK: No, no, I've never heard anybody talk about that, no, absolutely. I've been watching, hoping, and I'm shocked every single year when I get my tax bill.
(SOUNDBITE OF LAUGHTER)
CONAN: All of us are shocked every year when we get our tax bill, Frank, but thanks very much for the call and continued good luck to you.
FRANK: Thank you very much.
CONAN: And joining us now is Steven Greenhouse, labor and workplace correspondent for the New York Times. He joins us from our bureau in New York. Nice to have you back, Steve.
STEVEN GREENHOUSE: Nice to be here, Neal.
CONAN: And is anybody, as far as you know, talking about closing that loophole for small businesses?
GREENHOUSE: No, I haven't heard that. They talk about doing a lot of other things to help small business, providing them with tax breaks to invest in machinery, tax breaks to hire veterans from Iraq and Afghanistan, tax credits to help hire the long-term unemployed.
CONAN: How much difference do government policies make for hiring decisions?
GREENHOUSE: I think government policies can make a big difference, and they often make a big difference. You know, if the government spends, you know, a lot of money in sort of pump priming and stimulus, you know, hundreds of billions of dollars, you know, it could put it into consumer's pockets through tax breaks or by direct programs to hire Americans, as Franklin Roosevelt did under, you know, the WPA back 75 years ago.
You know, that, you know, by putting more money in people's pockets, they'll shop more to buy cars or bicycles or groceries or hire carpenters to build an addition on their house. And that will lead to businesses hiring more people. And so...
CONAN: This is important. This actually can make a real difference?
GREENHOUSE: Yes, and I'm sure people in the chambers of commerce and elsewhere will say that if government has too many odious, onerous regulations, you know, for, you know, expensive costs for environment or job safety or health coverage or whatever, they'll say that might discourage businesses from hiring.
Now of course, you know, some supporters of regulations will say businesses are always complaining about regulations, even if the regulations might not be discouraging them from hiring.
I think a lot of economists agree, Neal, that the main problem now is there just isn't enough demand in the system. A lot of businesses feel why should I expand, why should I go out and hire more people when, you know, my receipts, my revenues, are remaining flat largely because, you know, American consumers are not doing so well because unemployment is so high and wages are stagnating.
CONAN: And how much of that is attributable to, I guess to some degree you have to say government policies, but also isn't there just a big factor of psychology, people's confidence has evaporated, so therefore they're not spending, therefore people are not hiring?
GREENHOUSE: That's - yes, Neal, that's part of it. I think the larger problem, and this goes back to when the - when we fell into recession a few years ago - is, you know, the housing bubble burst, and that caused the stock market to decline, that caused construction companies to stop building, that, you know, caused, you know, the unemployment rate to zoom upward, and as a result, you know, since the recession started, a lot of Americans have been hurting.
And, you know, if they feel more confident, then maybe they'll dip more into their savings and spend more to buy that car, to fix up that house, to go on a vacation. And when confidence is low - and right now confidence is very, very low for a whole number of reasons, because the stock market hasn't done so well or because of all these problems in Europe, because of worries about, you know, that we're going into a new recession - when confidence is low, people will spend less, and that will, you know, hurt the economy, will hurt businesses.
You know, people won't be buying as many cars, and that will hurt the number of autoworkers in Detroit. So right now the snowball seems to be rolling, rolling down in a bad way.
CONAN: In his Labor Day address, the president said we've got more than a million unemployed construction workers ready to get dirty. Right now the unemployment rate in the construction sector is at 13.5 percent according to the Bureau of Labor Statistics. And overall, employment in the industry is down 28 percent.
Michael Russell is chief operating officer of United Construction, and he joins us now from his office in Reno in Nevada. Nice to have you with us today.
MICHAEL RUSSELL: Nice to be with you, Neal, thanks.
CONAN: And Nevada has the highest unemployment rate in the nation, and I think construction, well maybe no other industry hurt worse than construction.
RUSSELL: Yeah, we've seen the construction industry unemployment rate here soar past 35 percent. And so a lot of the workers that we've had here in the past are starting to exit the state.
CONAN: And have you laid people off in the last couple of years?
RUSSELL: You know, we've gone from a core of about 75 people in our office operation down to 25. And our field operation has gone from over 500 people down to less than 20. So our business has been substantially impacted through this economic cycle.
CONAN: And when we say construction, that covers a lot of bases. What kinds of projects do you typically do?
RUSSELL: Well, typically we build commercial, institutional and retail buildings. You know, a lot of what's been impacted in the real estate market has affected our business. We are not a contractor that builds roads and bridges, so we haven't been the benefactor of any of the American reinvestment dollars that have come down the pike from the feds, so...
CONAN: The stimulus money, yeah.
RUSSELL: Yeah, exactly.
CONAN: So your - what would turn your business around? Is there any government policy that might change that you would say whoa, we need to hire some more people?
(SOUNDBITE OF LAUGHTER)
RUSSELL: Well, you know, I think it's a lot of things. I think, you know, it was touched on in earlier comments. You know, simplifying the tax code I think would help. Our business is a Subchapter S, so all of the income that we make is passed through to us personally as partners in the business to pay personal income tax on.
So, you know, again, I don't want to reiterate that too much, but one of the things that, you know, I think the Congress can do is, you know, help keep taxes low, start controlling their spending and reining in some of the burdensome regulations.
We're - you know, we have a lot of regulations we live with, safety and otherwise, and we know they're there for good cause, but the long and the short of it is, until some of the certainty can get back into what's going to happen with things like the health care law and regulatory, you know, financial, regulatory reform, we just don't know how to proceed.
CONAN: Certainty is what you're looking for.
CONAN: And is there something external to what the government might do that you're looking at to say that's a good sign, that might make me rethink?
RUSSELL: You know, I think interest rates staying low is a great sign. There is some capital formation going on on the sidelines, although people aren't cutting loose with it yet on a private capital basis. So I am seeing some positive signs in the marketplace just very cautiously optimistic still, especially here in Nevada. It's - you know, again, it's a demand issue from a real estate perspective.
You know, the customers here have all contracted. Real estate values, as they have in most places, have plummeted, and so lease rates and, you know, the availability of empty space is still quite large here.
CONAN: So a lot of capacity remains to be sopped up before they're going to start building new stuff again.
CONAN: I understand that you recently spent some time in development in another part of the industry, and that's not doing particularly well, either.
(SOUNDBITE OF LAUGHTER)
RUSSELL: Well, I think the two, you know, go hand in hand, Neal. It's - you know, real estate development is really driven by the demand of customers needing space, whether it's office space, retail space or industrial space. To give you an example, I worked at a company named Prologis for about 10 years and was one of the senior managers of their North American development business unit.
And in the good years, we would invest anywhere from $400 million to a billion dollars in real estate investments and construction here in the U.S. And at the end of 2008 and 2009, that dropped off to less than $50 million a year, to give...
RUSSELL: Yeah, so you can see that that was quite an impact on the real estate and construction industries.
CONAN: Do you see any lights at the end of the tunnel?
RUSSELL: I wish I could say yes, but we're planning for the worst and hoping for the best.
(SOUNDBITE OF LAUGHTER)
RUSSELL: As a business owner, that's what we kind of have to do these days. We've really had to take, you know, some pretty hard hits with our people, and so we've, you know, already gone through that several years ago but still always looking to, you know, be more efficient.
CONAN: Well, Mike Russell, good luck to you, and thanks very much for your time.
RUSSELL: Thank you, Neal, I appreciate it.
CONAN: Michael Russell, chief operating officer of United Construction, with us from his office in Reno in Nevada. And that kind of construction, Steve Greenhouse, that's what's going to need to get going. If you see that starting again, that would be a real green shoot.
GREENHOUSE: Absolutely. I think, unfortunately, the construction industry might be one of the last to rebound because there had been so much overbuilding during the years of the housing bubble. I think, you know, Mike Russell put it very well, and it is very sad to hear, how many people he laid off, and it must have been very difficult for him.
But he used, you know, the big word one often hears: uncertainty. And I think there are two levels of uncertainty. One is yes, he's uncertain that, you know, how well the new health care regulations be formulated, might that raise his costs, and I think to a certain degree that does discourage him from hiring more.
But I think the much bigger uncertainty that he worries about is: Will there be orders for me? Will there be people to buy homes? I imagine if a shopping mall developer asked Mike Russell will you build this mall for me, he'd do it happily, even if he has some concerns about regulations maybe making it a little more expensive to hire individual workers.
CONAN: We've heard a lot already about competing proposals this week to spark job growth. Today we want to hear from people actually making hiring decisions. Employers, tell us what one idea would make you hire more people? Give us a call, 800-989-8255. Email us, email@example.com. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.
(SOUNDBITE OF MUSIC)
CONAN: This is TALK OF THE NATION from NPR News. I'm Neal Conan in Washington. And there's good news for political junkie fans. Ken Rudin landed safely yesterday, late but safe. The infamous ScuttleButton puzzle is back. That's the real good news. You can take your best shot at solving Ken's latest handiwork at our website. Go to npr.org/junkie, and a random winner will even get a no-prize T-shirt.
Speaking of politics, if there was any doubt the 2012 campaign is clearly in full gear, the overriding theme: the economy and jobs. On the GOP side, Mitt Romney and Jon Huntsman offered plans to spark job growth. Later tonight, President Obama delivers his jobs plans.
Many of the almost 14 million people who can't find work doubt whether any proposal is going to help them. Today we're asking people who do the hiring. Employers, tell us what policy change would make you hire again. Give us a call, 800-989-8255. Email us, firstname.lastname@example.org. And you can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Our guest is Steven Greenhouse, covers labor and workplace issues for the New York Times. Let's get another caller in. This is David and David with us from Chesapeake in Virginia.
DAVID: Hi, thanks for taking my call.
DAVID: I'm a small business owner. I do environmental consulting, and my primary clientele is the construction and infrastructure industry. You know, what I've seen, I mean, my business has almost been completely shut down because of the home building issues and infrastructure, lack of infrastructure that's going on now.
You know, but even if the government was to come up and, you know, and allot X amount of dollars, for my business, the regulations are there for me to, you know, do the things that I need to do, but the problem is is that the federal, state and local governments are not doing anything to enforce those. So it wouldn't create any more work for me.
And, you know, if the gas prices were forced to be, you know, pressed lower, you know, I think that that would help stimulate the economy because, I mean, people don't have any extra money. And, you know, you get the housing market right, and you get the gas prices right, and that's going to generate people, you know, into more spending because, you know, what's the use to hire more people if I'm only going to make $20,000, but I've spent $75,000 on an employee to get that?
CONAN: Yeah, and gas prices, obviously they have come down a bit. They were really spiked earlier in the year.
DAVID: Yeah, but they're nowhere near where they should be. I mean, these oil companies are just gouging the American public. They're gouging us.
CONAN: Steven Greenhouse, is there anything the government could do? Obviously there's gas taxes. Could the government reduce gas taxes? And he's right, when the gas prices are low, that does help people who are - well, everybody really.
GREENHOUSE: In theory, the government could reduce gas taxes. That might mean more demand for gasoline, which could then end up increasing gasoline prices. And, you know, if we cut gasoline taxes, that of course will help increase the budget deficit.
My colleague Tom Friedman at the New York Times has been writing columns for years saying we should have raised the gas tax by a dollar several years ago because that would have discouraged Americans from using so much gas. That would have decreased demand, and that would have ended up resulting in lower gasoline prices and less money being shoveled abroad to Saudi Arabia and Libya and elsewhere.
CONAN: And of course lower deficits, too.
GREENHOUSE: And lower deficits, yes.
CONAN: I'm not sure David would agree with you. But anyway, David, we thank you for the call.
CONAN: Joining us now is Christopher Brandt. He founded Audacious Inquiry, a health IT consulting firm which is based in Baltimore, and he's with us here in Studio 3A. Nice of you to come in.
CHRISTOPHER BRANDT: Thanks for having me.
CONAN: And your business is - and IT in general - but your business is doing pretty well?
BRANDT: Indeed. We're cautiously optimistic about the environment, and we're growing a little bit, so...
CONAN: And how has that changed over the past couple of years, as we've all been rollercoastering through this crisis?
BRANDT: Well, I'd say at first - well, our company was founded in 2004, and we had a pretty good run out of the gate, but we definitely suffered a bit. As our customers - our organizational, corporate and commercial customers, - contracted, we did as well. But over the last couple of years, our deepening experience and expertise in health IT, as you mentioned, has been a driver for growth for us.
CONAN: Health IT, are you digitizing health records? Is that what you do?
BRANDT: Well, we're doing a few things. Ultimately, health care is at a point of generational shift. We as a country and, you know, as an industry, the health care system needs to simultaneously drive greater quality, greater patient safety and more efficient care delivery in order to support a growing and aging population.
In order for this shift to be successful, we're going to need a robust and secure technology infrastructure. So our firm has helped provide our clients, government clients, payer, so ensure our clients to implement and integrate their health care systems.
CONAN: And give us an idea. How big was your company when you started? How big is it now?
BRANDT: Well, it was just me when we started.
(SOUNDBITE OF LAUGHTER)
BRANDT: It was small, very small. Now we're 20 consultants and growing. We're growing a little bit.
CONAN: Steven Greenhouse, across the health sector, not just information technology for health, that's one part of the economy that continues to do very well.
GREENHOUSE: Yes, you have very smartly tapped into one of the few sectors of the economy that's still growing, and then you found the niche within that sector, IT, that's probably growing one of the fastest within the health care sector. So I congratulate you on your wisdom.
I'm sure our friends in the housing - you know, in the housing industry wished that their industry were growing a tenth as fast as the health care industry nowadays.
CONAN: Let's see if we can get Audi(ph) on the line, Audi's with us from Charlotte.
AUDI: Hi, there. Hi, Neal, how are you?
CONAN: Very well.
AUDI: Well, I run a health care services company, and we have a different problem. Like your guest mentioned, health care is one sector that is growing, and we have to go overseas to find the clinical talent that we are looking for. And we find it extremely hard to recruit, retain and attract talent, especially in rural sectors.
So from my perspective, you know, nothing that the government can do can help us in the immediate future. But I do think that if we do not invest in education and retraining a workforce for long term, we'll have a much bigger issue 20 years from now.
CONAN: Christopher Brandt was nodding his head vigorously with that comment. You agree?
BRANDT: I do. I think - we're a services business and a consulting company, and our strength is really a function of the capability of our team members and our people. And I'd be really concerned about any government cuts or changes that don't - program changes that don't encourage development of a technically and critical-thinking-minded workforce.
AUDI: May I also add, Neal, that we have grown almost 100 percent over the last four years and all on the back of, you know, legal immigrants and clinical talent from, you know, around the world.
CONAN: When you say clinical talent, doctors, nurses, is that what you're talking about?
AUDI: Yeah, (unintelligible), physical therapists, occupational therapists, (unintelligible), yeah, so on so forth, yeah.
CONAN: And do you project continued robust growth?
AUDI: Absolutely. We've got a network of recruiting worldwide, and that costs us $25,000 to $40,000 to bring one of these clinicians to the U.S. We've tried to approach universities. We've tried to approach to be able to offer scholarships in return for some promise of work from these candidates, but the universities are very mired in bureaucracy and, you know, it's just - it's been tough.
We don't want to spend $40,000 in recruiting costs per clinician, and yet we have to do that.
CONAN: Well, we wish you continued good luck and better success finding people in this country who can do the work you need.
AUDI: Thank you.
CONAN: Thanks very much for the phone call. And Steven Greenhouse, you do find some sectors of the economy where people say we can't find the people we need.
GREENHOUSE: Yes, it's frustrating. What's happening with Audi that he can't find, you know, occupational therapists, certain therapists, and he seeks them from abroad. You know, I think a lot of Americans would think, you know, that seems crazy. We have a 9.1 percent unemployment rate, 14 million unemployed.
You know, in my book "The Big Squeeze" I wrote about all these nurses who are being brought in from overseas, yet all these Americans at the same time would love to become nurses because those are jobs where you go to college two, three, four years, you can make $75,000, $80,000. And they say: Wait a second. Why are all these nurses being brought in from abroad?
So unfortunately, I think some colleges are too slow, as Audi said, too slow to adapt their programs to provide training to fill these jobs that really need to be filled.
CONAN: Christopher Brandt, I understand you've got some jobs posted on your website.
BRANDT: That's right, we're...
CONAN: What are you looking for?
BRANDT: Well, we're looking for engineers, software engineers and folks who are well-versed in health information exchange and health information technology. And it's not - there's not a lot of folks who have that experience, because it's a relatively new industry.
CONAN: And the company, again, if you've got that training and would like to move to Baltimore...
(SOUNDBITE OF LAUGHTER)
CONAN: ...is Audacious Inquiry. Christopher Brandt, good luck to you.
BRANDT: Thank you.
CONAN: Thanks very much. Christopher Brandt is the founder of Audacious Inquiry, a health IT consulting firm, and he joined us here in Studio 3A. Let's go next to Matt, and Matt's with us from Panama City in Florida.
MATT: Hello. Good day. Thanks for having me on the show.
CONAN: Go ahead, please.
MATT: I am a dock photographer, or I own the dock photography businesses down here on the marina. Two years ago - my last two didn't really count, with the oil spill. But three years ago, we had 72 days of snapper season, which is a busy time of the year. Almost every boat goes out and charter fishes. This year, we only had 48 days. So I had two less employees. We're 30 less days this year because of federal regulations.
CONAN: And that's presumably to prevent overfishing?
MATT: Presumably, yes. The fish were - have never been bigger, and have never been more plentiful as they have been this year. I actually went on a scientific mission with the Florida Wildlife - Fish and Wildlife here. And in an eight-hour trip, we caught 302 red snappers. I caught 50-some that day. These were all catch and release. But they were very plentiful out there. Hopefully, the science will catch up with the regulations soon enough. But, yes, directly because of federal regulations, I don't have two more employees for 30 extra days this year.
CONAN: Steven Greenhouse, this is a direct area where the federal regulations could make a big difference.
GREENHOUSE: Evidently. I'm not an expert in fishing, and I worry if I stick my toe into this area, a barracuda is going to bite me very quickly. So I'd better be careful. But you clearly, Neal, there are areas where overregulation can result in a decline in jobs, can result in companies laying off people. I think President Obama in his speech tonight, he'll probably, you know, he'll probably address somewhat the Republicans' concern, businesses' concern that there's overregulation.
But I think his main concern tonight is going to be try to find ways for government to stimulate jobs, you know, through tax breaks, through extending unemployment insurance, by, you know, giving states and cities money to, you know, not to lay off teachers, not to lay off first responders like cops and firefighters. But, you know, as Matt said, you know, there will be concerns about trying to reduce regulations at least around the edges, so that they're not too onerous for business.
CONAN: Matt, thanks very much for the call. It sounds like...
MATT: Thank you.
CONAN: ...that one day catching 50 fish must have been a pretty good day.
(SOUNDBITE OF LAUGHTER)
MATT: Yes, sir. It was a lot of fun.
CONAN: All right. Thanks very much for the call. We're talking about what could convince employers to start hiring again. Steven Greenhouse of The New York Times is our guest. You're listening to TALK OF THE NATION, from NPR News. And I wanted to read some emails that we've gotten, this one from Timothy in South Bend: We're a small engineering architecture firm. All the tax cuts in the world won't give us any incentive to hire. Eliminate regulations, not going to hire anybody, either. Give us a project, and we'll be hiring more draftsmen, engineers, architects.
When the government invests in infrastructure, we hire engineers. Those projects allow construction companies to hire workers. All those new hires buy stuff, which prompts the private sector to make more stuff and hire more people to make it. It's an easy snowball to start. Why is this not a no-brainer? This from Kevin in Lindberg(ph) - Lynchburg, Virginia: The bottom-line is demand. In that, there is very little. If there's no demand for a product or service, it doesn't matter what the taxes and regulation issues are. People will hire when the demand for their product exceeds their ability to produce.
And this from Chris: Streamline the process for clearing new medical equipment through the FDA. My government - my company has products that have all been in Europe for five years, but are taking a long time to be approved by the U.S. Once the products are cleared, my company will start hiring. Steven Greenhouse, there's a lot of complaints about backlogs, not just at the FDA, but at places where you'd think you'd want to get things through, like the patent office.
GREENHOUSE: Yes. Business often says, you know, government should get out of the way, should reduce regulations, should make it easier to approve new drugs, new equipment, new patents. And, you know, again, it's hard to say, well, the patent rules are too strict, or is FDA testing of new drugs and new equipment too tough. It's hard to wade in there. But, you know, there is a sense that, you know, like the person who said, you know, we - what we need is new projects. What we need is new government spending.
Everyone wants government to do more that will help them. And we've heard some, you know, business say it's not the regulations that's preventing us from hiring. It's that there isn't enough demand. We've heard other business folks on the show say it is regulations. So I think the president has to address many, many complaints coming from many different directions. You know, you had two emails right now where both people said we need more demand. Only when we have more demand, only when there's a call for us to produce more than we're already producing, will we really hire more.
And I think, you know, as you said earlier in the show, consumer spending is flat. Consumers are flat on their back. Unemployment remains high. Confidence remains low. Wages remain flat. And I think the president, you know, is sort of going to put on his Keynesian hat tonight and say we the government - seeing that the economy is flat on its back and consumers are flat on their back - we the government have to stimulate demand. And we will do that through some infrastructure projects that might maybe, you know, will give - write an email, you know, new projects to do, and will give cities and states money to hire teachers, to hire cops, to hire firefighters.
CONAN: And I wanted to get that point in. This was in a letter to The New York Times editor page yesterday. Abram Katz, from New Haven, asked why all the focus is on infrastructure jobs, he says. What about skilled, unemployed, educated, white-collar workers like teachers, journalists, pharmacists, middle-management and so on? Most of us are in our 50s, which essentially removes us from the construction trades job market. I'm willing to learn welding or carpentry, but who would hire a 60-ish welder with no experience? Millions of people are in the same straits as I, yet we are invisible.
GREENHOUSE: To be unemployed and to be in your 50s and 60s, when there are 14 million other people unemployed, you're in - unfortunately, you're in a very tough situation. Now, I know some, you know, people who have been laid off in their 50s who found jobs, but, you know, I and other people, The New York Times have interviewed - done stories about many people in their 50s who are part of the long-term unemployed who are out of work for six months, nine months. I think, you know, to the extent we can get the economy growing again, get more businesses hiring, that will eventually, hopefully, make it easier for the older people who are unemployed.
But we really, you know, again, we have 14 million people unemployed. And we really have to, you know, somehow create a million jobs and two million jobs and three million jobs. And then it will become easier for the people who've been laid off a long time. But the road isn't easy, Neal.
(SOUNDBITE OF LAUGHTER)
CONAN: No. It is not easy. We'll hear from the president later tonight. Steven Greenhouse, thanks very much for your time, as always.
GREENHOUSE: Nice to be here, Neal. Thank you.
CONAN: Steven Greenhouse, labor and correspondent - workplace correspondent for The New York Times. Coming up, Muslims in America, 10 years after. Stay with us. It's the TALK OF THE NATION, from NPR News.
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