Saturday , April 17 2021
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Articles by Yves Smith

Inflation in the Aftermath of Wars and Pandemics

2 days ago

Yves here. This article provides an interesting counterargument to the widespread belief that Covid-related stimulus will generate inflation. Aside from the fact that the economy was below capacity before the Covid crisis (supported by the high level of involuntary part-time employment) and therefore its ability to support more demand is likely high than deficit hawks would have you believe, the lack of labor bargaining power will seriously dampen any one-shot spending from producing sustained wage gains. And remember, in an services-dominant economy, labor costs are the single biggest cost category.
And I am very fond of this sort of analysis. Ken Rogoff’s and Carmen Reinhardt’s study of 800 years of financial crises produced the important finding that high levels of international capital

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Links 4/15/2021

2 days ago

Dutch citizens are using a “doorbell” to help fish get past barrier New Atlas (furzy)
Nepal rhino numbers rise in ‘exciting’ milestone BBC
Ancient Greece’s Army of Lovers New Yorker (dk)
Ponzi schemer Bernie Madoff dies in prison at 82 Associated Press (Kevin W)
Boy, 12, dies after doing TikTok blackout challenge Independent. :-(. Too young to be Darwin Award material, you need to be of the age of consent.
The first swarm of genetically modified mosquitos is about to hit the US Popular Science (resilc)
These sneakers are woven by robots and have 3D-printed soles Boing Boing. Resilc: “Great, more unemployment in Bangladesh. Maybe they can code….”
Encryption Lava Lamps Atlas Obscura (Chuck L). Very cool.
New Zealand Just Passed a Climate Change Law No Other Country’s Dared to Tackle

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Michael Hudson: America’s Neoliberal Financialization Policy vs. China’s Industrial Socialism

2 days ago

Yves here. Michael Hudson said he both enjoyed and very much appreciated the robust discussion among members of the commentariat last weekend about what to call China’s economic model. He’s keen to continue the discussion. To advance that end, Michael has graciously given us a lecture being subtitled in Chinese for release in a few weeks. It summarizes a series of talks and will also be included in his my book to be published later this summer, “The Destiny of Civilization: Industrial Capitalism, Finance Capitalism or Socialism.” As you can see, Michael focuses on finacialization as a central point of difference between the two systems.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of

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Pricey Learning Pods Are Now Helping Vulnerable Students. Will the Trend Survive the Pandemic?

2 days ago

Yves here. I wish someone could provide a range of guesstimates as to what various interventions in schools would cost to improve ventilation, as opposed to learning pods at $13,000 a semester. The problem, as anyone who has spent much time in NYC or other East Coast cities knows, most schools are old, and some are even antiques. But older schools would have windows that were originally designed to open, and one would assume could be or in most cases were fitted with screens.
In any event, the learning pod remedy, while clever, is depressingly pricey. And even worse, reading between the lines, it appears to be a selling point for charter schools. And if you read far enough into the article, you will see the hand of Bill Gates.
In other words, this is clearly a planted story, but you can

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Whither AOC?

2 days ago

Yves here. Tom Neuburger gives a hard look at AOC’s recent donations to corporate Democrats and tries to ferret out what she intended to accomplish.
Tom is at a loss to understand why AOC chose the party members she did. I am at a loss to understand why she thought $5,000 donations would have made any difference to the recipients even if they had been on board with taking funds from her. As I am sure readers know, there’s a dark art as to how heavyweight bundlers and donors work around formal contribution limits.
And on top of that, Congressional Democrats run a pay-to-play operation. Kicking in enough money to the DCCC is the cost of entry for getting House committee leadership positions. We explained this back in 2011, via the work of Tom Ferguson, in Congress is a “Coin Operated

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Experts Lay Out Their Case Against Carbon Pricing

3 days ago

Yves here. This article takes a look at how little progress is being made against climate/carbon emission targets and recommends more aggressive government action. Presumably the book it’s summarizing, Making Climate Policy Work. However, it sets up a straw man by equating carbon pricing with cap and trade and carbon offsets. We’ve called out those approaches starting with the early days of this website, in 2007, as gimmicks that enrich intermediaries, are rife with fraud, fail to change behavior, but mislead some do-gooders into thinking they’ve accomplished something.
A carbon tax is not a new idea. Al Gore pumped for it in 1992. Illustrious economists, including Fed chairmen, two former Treasury secretaries, and Brookings recommended one in 2019. The Financial Times called for “a clear

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Why Work at Home Is Not Likely to Thrive After the Covid Era

3 days ago

Many white collar workers seem to be enthusiastic about the work from home trend, now freed of time-eating commutes, office politics, and hovering bosses. It’s hardly a secret that Covid-induced fear of commuter trains, busses and elevators has led CEOs to revamp operations and allow employees who can to work remotely. It has already radically reshaped the residential real estate market, with professionals who have extra cash hoovering up houses in exurbs or other states with lower costs of living but reasonable amenities.
But is this shift a lasting development? Remote work is hardly a new concept, as outsourcing and offshoring of lots of tasks, such as coding, call centers, and legal research attests. Despite the press and broker enthusiasm for this shift, it’s likely to wind up being

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Slaughter Central: The United States as a Mass-Killing Machine

3 days ago

Yves here. Tom Engelhardt tries to get his arms around US weapons sales and use. The figures are depressing, particularly in comparison to those of our nominal peers. And the intensity of our fixation with killing has only grown only over time. Just look at TV. In its early, tamer days, frontier shows like The Rifleman and Gunsmoke gave weapons top billing. Now in our post-Vietnam, post Archie Bunker of greater realism, police shows have gory gunplay as their prime offering, with big side portions of blowing things up and car chases/crashes. We even have a prime time show, The Blacklist, where the lead is assured to shoot at least one person every episode. Better to look at the fictionalized version, where we know no actors were hurt, than clips of the real thing from the Middle East,

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Lessons from the First New Deal for the Next One

3 days ago

Yves here. While this article has a lot to recommend it, I have to voice some reservations. The first is that it jumps on the “Biden as FDR” bandwagon, which Lambert debunked yesterday. The second is the New Deal brand expropriation by Green New Deal advocates.
As we’ve stressed repeatedly, the Green New Deal proponents will not acknowledge, let alone promote, far and aways the most important and urgent measures we can take to combat climate change: radical conservation. They aren’t even pushing for some of the measures implemented during the Oil Crisis to discourage fossil fuel use, like setting summer thermometers at 77 degrees to reduce air conditioning use, every other day access to gas stations, and encouraging commuter ride-sharing. These may seem merely symbolic to the level of the

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Only Multilateral Cooperation Can Stop Harmful Tax Competition

4 days ago

Yves here. My tax maven friend has mentioned off and on that OECD countries have been working on how to stop or at least reduce multinational tax avoidance via artful transfer pricing and other scheme, via their Base Erosion and Profit Shifting initiative, or BEPS. The wee problem is it was launched in 2013 and it’s now 2021. Will the US showing more support make a difference?
By Anis Chowdhury, Adjunct Professor at Western Sydney University and University of New South Wales (Australia), who held senior United Nations positions in New York and Bangkok and Jomo Kwame Sundaram, a former economics professor, who was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. Originally published

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Links 4/13/2021

4 days ago

Why Read the Classics? Abdelfattah Kilito, Baffler (Anthony L)
Japan to Dump Treated Radioactive Fukushima Water Into Ocean Bloomberg (David L). Not news per se, more a status update.
Despite Pandemic Shutdowns, CO2 Now at Levels Unseen in 3.6 Million Years Defend Democracy
Airborne plastic pollution ‘spiralling around the globe’, study finds Guardian (Kevin W)
Injectable gel found to help reinforce and resurface joint cartilage New Atlas (Kevin W). A way away from prime time. Only mice studies.
Brain Wifi Aeon
Here’s Why Stress Could Make Your Hair Fall Out, According to New Mouse Study Science Alert (Chuck L)
On a limb: Despite resistance, a group of researchers is investigating the possibility of a new mental health disorder STAT. Gah. An excuse for more medding of kids.
Can drinking

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Michael Hudson Asks Our Readers: If Democracy Winds Up Creating Financial Dominance, What Do We Call China?

7 days ago

Yves here. I hope readers will take Michael Hudson’s query to heart. His work has demonstrated how the financial sector tends to gain power and increase inequality if unchecked via debt jubilees or other methods to keep it from acting as a rentier and creating debt peonage. He wonders what would be the most fitting label for countries that like China have adopted substantial elements of a modern market economy but are taking steps to restrict the influence of financiers.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “and forgive them their debts”: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year
The inability of

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Prince Philip Was the Godfather of Anglo-British Nationalism

7 days ago

Yves here. It may seem odd to commemorate the death of Prince Philip, since the British monarchy is a hoary symbol of [take your pick of positive or negative associations] whose main purpose today is brand-building. Yet even today, the Royals exercise influence over politics (one recent article described the Queen’s extensive but quiet lobbying in defense of her tax havens), opinion, and fashion. A bare minimum, they are billionaires whose deal with the British public is they get to rattle around their drafty castles, have staff and allowances, in return for looking useful and making lots of appearances. One friend explained that the reason Meghan was so quickly unhappy with her new role was that she didn’t understand the job description. No, you do not fly on private jets. Yes, you spend

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What Covid Means for the Athlete’s Heart

11 days ago

Yves here. We’re running this post as an apparently badly needed reminder that the consequences of getting Covid extend beyond the risk of death, hospitalization, and missing time from work. Many who contract Covid suffer from damage that may be lasting, from serious lung abnormalities to kidney impairments and brain inflammation. This post focuses on the heart.
By Markian Hawryluk. Originally published at Kaiser Health News
For sports fans across the country, the resumption of the regular sports calendar has signaled another step toward post-pandemic normality. But for the athletes participating in professional, collegiate, high school or even recreational sports, significant unanswered questions remain about the aftereffects of a covid infection.
Chief among those is whether the

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Wikipedia’s Deep Ties to Big Tech

11 days ago

Yves here. This is a greatly expanded and considerably broader follow-up to an article on Wikipedia by Michael Olenick early this year, Wikipedia: The Overlooked Monopoly. Here, Olenick debunks the idea that Wikipedia is impoverished by showing not only its level of funding but also digging into its sources, a considerable amount of which comes from Silicon Valley titans via intermediaries. He also shows how Wikipedia’s entries (and absence of them) are slanted to favor its tech backers.
By Michael Olenick, Executive Fellow, INSEAD Business School. Originally published at the Institute for New Economic Thinking website

There are no polls, but it is a safe guess that the general public thinks of Wikipedia, the ubiquitous online encyclopedia, as one more plucky non-governmental organization

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FBI Investigating Reporting Fraud at $62 Billion Pennsylvania Public Pension Fund, PSERS; Returns Allegedly Falsified to Avoid Increased Worker Contributions

11 days ago

Frankly, it’s surprising that it’s taken this long for an investigation of a public pension fund over allegations that it lied about its returns. But it’s not a surprise that it took Federal investigators, as in the FBI, to saddle up, in this case against a Pennsylvania Public School Employees’ Retirement System, aka PSERS.
Readers regularly lament how CalPERS regularly and obviously runs roughshod over the law and board members openly violate their fiduciary duty by not even pretending to oversee staff adequately and undermining anyone who dares to do so. That’s because CalPERS has the deficient governance structure that is pervasive among US public pension funds: boards captured by staff and a dearth of other local or state supervision and enforcement. So things have to get really bad,

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Good Friday and Easter Church Raid Attempts by Police Over Covid Intensify Conservative Christian Vaccine Hesitancy

12 days ago

Yves here. We didn’t expect to return to a heated topic so soon, that of conservative Christian resistance to Covid 19 vaccines, which we discussed late last week. As the post described, they have two grounds for concerns. One is the use of fetal stem cell lines. The connection to the vaccines may seem pretty strained to those not sensitive to this issue, but it isn’t fabricated.1
The second is that the proposed vaccine passports sound like the Mark of the Beast. Lambert found the relevant section in Revelation 13:
11 And I beheld another beast coming up out of the earth; and he had two horns like a lamb, and he spake as a dragon….
16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
17 And that no man

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Martin Luther King’s America Redux: “The Greatest Purveyor of Violence in the World”

12 days ago

Yves here. Comparatively few recall that Martin Luther King fell into disfavor in the US when he became an early critic of the War in Vietnam. King described how the cost of the conflict fell disproportionately on young black men and that military spending drained resources from social programs. But he also stated that as an advocate of non-violence, he had to stand for it in all settings, which included opposing US aggression abroad.
We’re fans of Liz Theoharis, and we hope you appreciate her use of the anniversary of King’s Beyond Vietnam, and his assassination a year later, to see how little has changed in the past half-century plus.
By Liz Theoharis. Originally published at TomDispatch
Fifty-four years ago, standing at the pulpit of Riverside Church in New York City, Martin Luther

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Links 4/3/2021

14 days ago

The minds of plants aeon (Douw)
Video captures deer flying through a school bus windshield BBC. Looks like the deer was OK.
Seal Alliance asks walkers to give the animals space as lockdown eases BBC
In an anti-tick effort, officials call for more moose-hunting permits in NEK VTDigger (resilc)
Where billions of cicadas will emerge this spring (and over the next decade), in one map Vox (resilc)
Drones Flying Over Arlington to Measure Deer Population Newsroom (resilc)
Overuse of antibiotics threatens China’s fish farms, scientists warn South China Morning Post
Meet Boston Dynamics’ next commercial robot, Stretch ars technica (resilc). So much nicer: Walking machine test YouTube
Not so vanilla: The mission to spice up our favourite flavour New Scientist (Dr. Kevin)
A town’s water is

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Why the Government Bonds Owned by the Bank of England Are Not a Debt Burden, Even When They’re Repaid

14 days ago

Yves here. While I wish I had some Easter programming, a mini tutorial will do. It would have been helpful for Richard Murphy to have also deployed the usual bookkeeping T accounts, since some find those visuals to clarify the money flows, but I trust this explanation of (fiat issuer) government bonds held by central banks works on a stand-alone basis.
By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK
I received

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QE During the “Everything Mania”: Fed’s Assets at $7.7 Trillion, Up $3.5 Trillion in 13 months

14 days ago

Yves here. Even though I did not agree with a lot of what the Fed did during and after the crisis (at a minimum, institutions that needed Fed assistance, like Citi, or did nasty stuff, like Citi and everyone else, should have had their boards replaced and execs in the units that did Bad Shit forced out), I did understand their reasoning. Like Wolf, I’m at a loss now.
By Wolf Richter, editor of Wolf Street. Originally published at Wolf Street
The Fed has shut down or put on ice nearly the entire alphabet soup of bailout programs designed to prop up the markets during their tantrum a year ago, including the Special Purpose Vehicles (SPVs) that bought corporate bonds, corporate bond ETFs, commercial mortgage-backed securities, asset-backed securities, municipal bonds, etc. Its repos faded

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The ‘Roaring Twenties’ and Covid Recovery: Revisiting the Evidence for Europe

15 days ago

Yves here. I’m not sure I get this post. Seriously. It is clever to use the recovery from World War I and the Spanish Flu as a point of departure for discussing the real economy after Covid. But the world was vastly different then. Pre Great War globalization broke down. The major powers went back on the Gold Standard, although Peter Temin has argued, persuasively, that that was the worst thing they could have done and that it led to the Great Depression. And the world didn’t have to worry about resource scarcity and global warming back then either. And we aren’t yet done with Covid.
I also have trouble seeing the “Roaring Twenties” being depicted as a broad-based major economy phenomenon, even though he presents charts showing that for major European countries. England is not part of this

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Good Friday Special: Marcelito Pomoy – The Prayer

15 days ago

It’s unseemly to whine, but when enough little train wrecks pile up, it’s not quite the Ever Given in the Suez, but it can feel as difficult to get cleared out. Yesterday, on top of the bizarre spectacle of the assistants to three different doctors ghosting me (all with practices that have official “we schedule appointments in 24 hours” policies), USPS just messed me up with returning a letter I’d sent certified….as undeliverable….to Vanguard with the correct address! And that itty bitty SEP IRA contribution needed to be postmarked by March 15, which can’t happen absent a time machine. BTW, the MDs ghosting me had nothing to do with insurance or payment; we hadn’t gotten that far in the intake process.
So rather than attempt to write a post and have it either not be all so hot or take too

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Christian Nationalism Is a Barrier to Mass Vaccination Against COVID-19

15 days ago

Yves here. I’m running this post with its original headline, although the article doesn’t make terribly clear what “Christian nationalism” is. The author defines is at extreme evangelism but I’m at a loss to understand what makes that “nationalism”. The reason I am running this article is that it discusses an specific issue that IM Doc mentioned back in early February.
And even though we are discussing different subcultures in America, we might as well be talking about different countries. One of the lessons I learned by virtue of deciding to see the world on the McKinsey plan, was that virtually without exception, US companies entering a foreign market would royally screw things up. Even if they’d managed to hire good managers from the new market, the top brass would reject recommended

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China and US: Stumbling into War?

15 days ago

Yves here. While the general thesis, that opposed interests, rising hostility, lack of negotiating inclination/skills, mutual misunderstanding, and aggressive gestures being believed to be popular at home could too easily lead to an otherwise not intended war, is sensible, I’m not sure I agree with Klare’s take on Taiwan. He acknowledges that “Both sides recognize that such contradictory impulses are only likely to be resolved through armed conflict” yet argues that neither side wants war but that it might come about by mishap. That’s not the report I get from individuals in countries in Southeast Asia who watched China’s seizure of Hong Kong with alarm. They admittedly can react to only what they see, but they view China as full intent on perfecting its territorial claims and therefore

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Twitter and YouTube Manipulation in Trial of Derek Chauvin for the Death of George Floyd?

16 days ago

Due to the hour and the terrible general state of search, I can’t prove a negative, but I sure don’t like what I am not seeing regarding the trial of Derek Chavin on Twitter. And I’m not clear on how much of what I am not seeing is due to the US press or our tech overlords.
By sheer happenstance, when looking for something to watch while doing one of the few forms of lower body exercise open to me (standing on a whole body vibration plate), I turned on Court TV. Court TV has gavel to gavel coverage. You can also find YouTube videos of the full day of each day of the trial posted by NBC, the Washington Post, and other media outlets. So I am not asserting that some key material is absent from the Internet, but that particularly important bits are not being showcased.
What I saw in the mere

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LACERS Board Member Lambastes Lousy Private Equity Returns as More Studies Confirm Poor Performance for Decades

16 days ago

More and more public pension trustees are willing to say that the private equity emperors are looking awfully naked. LACERS has joined the club, with board member Sung Won Sohn sharply criticizing results considerably below LACERS’ benchmarks. Sohn’s views carry some weight, since he’s a prominent economist and former banker.
But as important, more and more studies and papers are confirming what we’ve said for years: that private equity does not deliver superior returns. We’ll briefly discuss the unwelcome truth-telling at LACERS and then turn to an important study by the authoritative CEM Benchmarking which found that private equity hadn’t outperformed since 1996. This is a devastating finding, since other analyses that questioned private equity results tended to date the shift to

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Getting a Prescription to Die Remains Tricky Even as Aid-in-Dying Bills Gain Momentum

17 days ago

Yves here. “Right to die” is a product of Christian prohibitions against suicide. After all, none of us gets out of here alive. However, the issue of pain or severe debility among the old and not necessarily so old is seldom discussed in polite company. My father shot himself when he could no longer endure the horrific symptoms of an autoimmune disease that was always fatal. One of my parents’ friends had successfully fought off breast cancer a couple of times. When it recurred and she was facing regular intubations to drain her lungs, and not high odds that treatment would work, she took a lethal dose of sleeping pills she’d hoarded. Another friend of my mother’s simply quit taking her meds and stopped eating. She died in a few weeks.
As one friend said about my father’s suicide: “He was

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Links 3/31/2021

17 days ago

Police say they found mafia fugitive on YouTube, posting cooking tutorials ars technica (BC)
Mother knows best! Cat carries one of her kittens into Turkish hospital and ‘asks doctors for help’ after the small animal developed an eye infection Daily Mail (Kevin W)
G. Gordon Liddy, planner of Watergate burglary, dies at 90 NBC (furzy)
Heavy Rain Brought Spectacular Waterfalls to Australia’s Most Famous Rock Atlas Obscura. Chuck L: “Stunning photos.”
Consider the Stork London Review of Books (Anthony L)
Living in a World Without Stars Lapham’s Quarterly (Anthony L)
Scientists Discover a Hidden Law Behind The Pointy Bits on All Living Things ScienceAlert (Kevin W)
Elizabeth Kolbert’s new book explores striking ways to fix our ecological problems PBS
Is the World Going Plant-Based? It’s

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A Covid Tragedy: “Wholesale Discrediting of Our Health Science Institutions”

17 days ago

Yves here. Quite a few readers responded strongly to a comment that came late in Nick Corbishley’s post yesterday on Ivermectin, from a reader in despair about what Covid had reveled about the state of health science in America, not just too many signs of weak organizational competence (like the CDC’s test kit fiasco) but also the quiet contempt which too many institutional leaders apparently have for the public at large. Why, for instance, did anyone think it made any sense to tell the Noble Lie about masks? How hard would it have been to promote the purchase and use of cloth masks and discourage buying of medical procedure masks? And now to just expect everyone to forget the deadly flip-flopping on masks rather than taking the adult step of ‘fessing up and apologizing?
I will admit to

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