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The case for keeping Congress red

Rep. Jason Lewis
MinnPost photo by Sam Brodey
At a recent get-out-the-vote event in Eagan, Rep. Jason Lewis opened his remarks to GOP volunteers by rattling off the good things that are happening with the economy.

Republicans’ message as they work to hold on to thin majorities in the U.S. House and Senate might best be summed up by that time-honored political adage: “it’s the economy, stupid.”

With less than two months to go before the November midterms, Republican incumbents are pointing to a set of glowing economic markers — a 50-year low in jobless claims, three percent GDP growth on the year within reach — and they are arguing that their “pro-growth” policies have been the fuel that jump-started a stalling U.S. economy.

In the two Minnesota battleground U.S. House races where incumbent Republicans are facing re-election, 2nd District Rep. Jason Lewis and 3rd District Rep. Erik Paulsen are leaning hard on the stronger economy. They’re plugging the GOP’s tax cut bill at every turn, arguing it’s making people better off, and they’re telling voters that if they like what they’re seeing, Republicans deserve another two years in the House majority.

The conventional wisdom in electoral politics is that if voters are feeling the effects of a good economy, they’ll be inclined to reward the party in power for it. Yet, it’s Democrats, not Republicans, who are odds-on favorites to win control of the House in November, and that’s largely because these midterms are shaping up as a referendum on President Donald Trump and his popularity more than anything else.

Recent political history shows that midterm elections tend to be dominated more by how voters feel about the president than they do about the economy. This year’s election could see the biggest gulf between those attitudes in decades: not since the Harry Truman presidency has consumer confidence in the economy been so high while a president’s popularity has been so low.

‘Humming with confidence’

At a recent get-out-the-vote event in Eagan, Lewis opened his remarks to GOP volunteers by rattling off the good things that are happening with the economy, framing his reelection bid — and the broader effort to hold the House — as an effort to continue on a path of economic growth.

He mentioned 3 percent wage increases, 4.1 percent economic growth, what he called the best job market in 17 years, and the average tax cut a family in the 2nd District is slated to receive under the GOP’s tax cut legislation, which he cited as $3,000.

There’s certainly no shortage of positive economic indicators for Republicans to point to: in the second quarter of 2018, the U.S. economy grew by 4.2 percent, the biggest increase in four years, which puts it on track for an annual growth rate of 3 percent, a benchmark that has not been surpassed since 2005. In August, the national unemployment rate was 3.9 percent, down nearly a point from the beginning of 2017. (Minnesota’s unemployment rate was estimated at 3 percent in July 2018.)

The Dow Jones Industrial Average, an index of the handful of big companies that make up a big chunk of the stock market, has hit record highs in 2018, and consumers’ confidence in the economy is at its highest point in 18 years. (Wage growth is currently at 3 percent — a figure many Republicans tout as a sign of progress — but inflation is rendering that rate of wage growth basically moot.)

“Our economy is humming with confidence, it is shining with with growth and optimism,” said Paulsen in an interview with MinnPost. “The psychology of folks feeling good about their own situation economically is important, but more importantly, they feel good about their neighbor.”

Paulsen, who faces wealthy Democratic businessman Dean Phillips in what could be his toughest re-election bid yet, said the economy is a central component of his message to voters in CD3, a west metro district that is home to several Fortune 500 companies and is, on average, the state’s most affluent district.

“I just make the case I’m following through on what I promised I’d work on,” he said. “We were told for years that the economy would never perform above 2 percent. Now we’re at 4 percent economic growth. The economy is booming again.”

Clearly, Lewis — who faces former medical device executive Angie Craig in a rematch of the 2016 election — is talking a lot about the economy as he persuades voters to grant him a second term.

“We have done everything that we said we were going to do and the result is, when the government gets out of the way, labor and capital come together, markets respond, and you get this rising tide of economic growth that benefits everybody,” Lewis at the Eagan event in August.  “Understand,” he added, “if we lose the House, all of that goes away.”

Rep. Tom Emmer, who is not expected to face a tough reelection fight in his 6th District, helps Republicans craft election strategy as a top official at the National Republican Congressional Committee. He says he asks voters two questions: if they feel safer than they did two years ago, and if they feel better off than they did two years ago.

“That answer is, clearly, yes,” he said. “All the jobs that have been created, all the job openings, real wages are rising, these are all good things… We had over 4 percent economic growth. If we continue on that trend, I think that’s the message.”

Center on the tax bill

To explain how GOP governance has led to an improved economy, Republicans point to regulation-cutting moves in Congress and the White House and how those have contributed to a broadly more fertile climate for business.

But mainly, Republicans like Lewis and Paulsen are touting the tax cut bill Republicans passed in 2017 to tell the story of increased economic growth — though that strategy is not without risks.

The bill, which permanently slashed tax rates for corporations and cut individuals’ taxes for the next decade to the tune of $1.2 trillion, was hailed by the business community, which says it has used the capital to reinvest in workers. (Most companies have largely rewarded their shareholders with savings generated by the tax bill.)

“We’ve been waiting for 31 years for tax reform under the auspices it would get the economy booming again,” said Paulsen, who helped to craft the legislation as a member of the powerful House Ways and Means Committee. “And that’s what it’s done.”

Though most people won’t feel the full impact of the tax bill’s changes until they file their 2018 taxes, Paulsen said the restructuring of corporate taxation has led to investments in the U.S. economy and is leaving people feeling better about where they are financially.

But the tax bill was an unpopular piece of legislation when it was being considered, and it has only gotten less popular over time. A June poll from Monmouth University found that 34 percent of Americans approved of the legislation, while 41 percent disapproved — a breakdown that critics of the legislation say is remarkable for a bill that cuts taxes, among the most popular things a government can do.

Rep. Erik Paulsen
MinnPost file photo by Bill Kelley
Rep. Erik Paulsen said the economy is a central component of his message to voters in CD3.
According to Vanessa Williamson, a fellow at the Brookings Institution think tank, though the tax bill is Republicans’ primary legislative achievement, turning it into something that helps them keep their majorities in Congress, and safeguard endangered incumbents will be very difficult.

“Republicans are in a hard place if they want to run on this tax bill,” she said, “because major provisions are unpopular even with the Republican base. And it wasn’t a real priority for American voters, or even Republican voters, to have a major piece of tax legislation be an achievement they’d be running on.”

She also issued a broader warning about the limits of a good economy: while the it matters a lot in presidential elections, she argues that it is not a good indicator of which party has an advantage in midterms, partially because voters are less likely to reward or punish their individual member of Congress based on how they feel about the economy.

“People think the economy matters a lot for elections — that’s true,” she said. “It just doesn’t hold in midterms… If I were a Republican strategist, I wouldn’t bank on the economy helping this year because on average, you wouldn’t expect it to help in a midterm that much.”

The Trump factor

Then there’s the issue of Trump. Historically, midterm elections — especially those during a president’s first term — tend to be referendums on the president, with the outcomes a reflection of their popularity.

Trump’s historic unpopularity is enough to create serious headwinds for Republican incumbents like Lewis and Paulsen. But there’s concern among Republicans that the president’s actions aren’t making it any easier for them to spread the good news about the economy.

For one, the president’s aggressive approach on trade, which has entailed slapping steep tariffs on imported products from Canada, China, and elsewhere, has sparked trade conflicts that have seen countries impose tariffs of their own on U.S. goods.

Workers and businesses in the agriculture and manufacturing sectors have been particularly hard-hit, forcing tough decisions about worker layoffs and future business investment, and raising the possibility of higher prices for consumers. The trade conflicts have given Paulsen and Lewis’ opponents an opening to puncture the GOP’s economic growth balloon and paint them as bad on the economy.

But Trump has cast the trade wars as necessary to strengthen the economy. He and his administration are frequently talking up the economy, with the president himself taking plenty of opportunities to contrast certain statistics with those of his predecessor, Barack Obama. At a campaign rally last week, Obama criticized of Trump for taking credit for economic growth, which escalated into a feud between the two presidents. That could make the issue more galvanizing for both parties’ bases of supporters ahead of the election.

Still, there’s evidence that Trump believes that the midterms will swing on other issues besides the economy. The president’s signature issue of immigration, for example, is one that he believes will help the GOP safeguard its majorities in Congress. Beyond that, Republicans are seeing value in turning to a strategy based on inflaming culture-war flashpoints, like kneeling during the national anthem at pro sports events, to galvanize the GOP base to the polls.

Republicans like Paulsen would like to see Trump focus more on the economic message. “He has a tendency to want to stay on offense and move on to the next thing right away,” Paulsen said of Trump. “Those tendencies can be distractions from some of the economic benefits people are feeling right now.”

“It’d be nice if he would just sit back, take credit, and go, ‘What’s next?’” Paulsen said. “I think some of the trade and tariff policies have a tendency to backfire, we’ve seen that already… I’m going to continue to voice my concern about that. We don’t want to lose this momentum going into next year.”

Democrats: Not the GOP’s economy

Democratic candidates running against GOP incumbents are talking about a lot of different things in this election, from health care to immigration to Trump. But they are finding ways to put a damper on the economic case Republicans are making .

Phillips, the DFL challenger to Paulsen in CD3, says there’s no doubt the economy is strong, but he questioned how much Trump and the GOP had to do with it. “The economy was doing well before Trump’s election, and it would have continued to grow,” he told MinnPost, echoing arguments from many Obama-supporting Democrats.

He also is criticizing the tax bill, which he said he would not repeal but revise, so that more benefits flow to working-class and middle-class taxpayers. Phillips said the tax bill boosted the economy, but called it a “sugar high.” “It’s no surprise that when you take a trillion to a trillion and a half dollars and add it to our national credit card debt, it’s going to be a boost to our economy,” he said.

Craig, running in CD2, has framed the tax bill as a historically bad piece of legislation that “lit a match” to income inequality in the U.S., and said she would repeal it.

But the U.S. economy is probably at its strongest point in any midterm election since 2006, said Stan Veuger, a political economist at the American Enterprise Institute, a center-right Washington think tank. “Obviously, the economy is good and it should help incumbents,” he said. “The economy is doing this well, and Republicans are still looking like they’re doing very poorly.”

In 2006, however, Democrats won control of the House in a landslide, thanks to public dissatisfaction with the George W. Bush administration and the Iraq War. They are hoping that opposition to Trump and the GOP — over their economic policies and beyond — will fuel a similar wave.

Republicans have a different election year in mind: 1998, when voters tuned out a Republican Party beating the drum of impeaching President Bill Clinton and instead gave new seats to Democrats on the heels of several years of strong, sustained economic growth.

Today, Republicans believe Democrats focus on Trump at their own peril. “People are more concerned with economic growth than a negative message,” Emmer said. “Democrats are making those same mistakes that Republicans made back in 1998.”

“A lot of this election is going to be about the referendum on Trump,” said Brookings’ Williamson. “But you have to run on something. If you’re an incumbent running in a good economy, you’re going to run on the economy. If you’re an incumbent in a bad economy, you’re going to run on something else.”

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Comments (29)

  1. Submitted by Robert Moffitt on 09/11/2018 - 10:50 am.

    I’m pretty sure our economy is doing well in spite of a Republican-led Congress, not because of them.

    • Submitted by Douglas Shambo II on 09/11/2018 - 11:51 am.

      I couldn’t agree more. Republicans can’t grant a tax cut (handing huge tax cuts to big business and billionaires), drastically raise military spending, acquiesce to the WH leveling ridiculous and uncalled-for tariffs against mostly friendly countries that will drive down employment and drive up the cost of goods, blow a gigantic hole in the national debt, and claim that they are anything like the party of fiscal or economic responsibility.

    • Submitted by Virginia Martin on 09/11/2018 - 12:26 pm.

      It’s doing well thanks to President Obama. He started the recovery. The current recovery is based on the tax cuts to the very wealthy, who are seeing to it that the economy prospers and keeps republicans in office. But what comes next isn’t so pretty: an enormous deficit that WE will pay for in the form of reduced health care, social security (we can’t afford it, you know, because of the huge deficit), and much else. Beware.

  2. Submitted by Alex Schieferdecker on 09/11/2018 - 11:03 am.

    If you look at any economic data, for instance, this graph of GDP (, the impact of GOP governance is impossible to distinguish.

    The current economy is the result of continuing trends of growth that began in 2010.

  3. Submitted by Gene Nelson on 09/11/2018 - 11:03 am.

    Hmmmm…the repubs gave us both the Great Depression and Great Recession and since the days of Reagan, massive record deficits that today under trump are $1 Trillion a year.
    They love to point to GDP growth and unemployment, while ignoring it is simply a continuation of the Obama years while they ignore that GDP growth is going to ONLY the wealthy…not the people.
    Dishonesty and manipulation seem to be the repub way.

  4. Submitted by Alan Davis on 09/11/2018 - 11:34 am.

    The GOP wants to roll back health care in MN. They prefer to tilt the economy to disadvantage working people. They deny climate change. They discriminate against women and would be happy to outlaw abortions, which would make millions of women outlaws or victims of coat-hanger surgery. Of course the stock market is up, since the give-away-the-country-to-the-1% tax cut allows corporations mostly to use their tax breaks to buy back their own stock without giving raises to workers. Infrastructure could have used that money to benefit all of us and create needed work. Social Security and Medicare are retirement and health care programs for retirees paid for over decades, not “entitlements.” They are under threat if the GOP is in power, since the GOP donors are salivating at the chance to get their hands on that money. The only thing for MN (and the country) is a big, blue wave. Let’s all of us who give a damn work to make that happen. Vote. Help others register to vote. Resist. Defeat.

  5. Submitted by Ray Schoch on 09/11/2018 - 12:39 pm.

    I’m not really a convert, but am nonetheless inclined to think Robert Moffitt is closer to being correct than Erik Paulsen. Trump-induced tariffs will hurt plenty of workers that haven’t been bribed or bought off, as will apparently be the case for pork and soybean producers, and the Republican tax bill is a national catastrophe in the making – for my children and grandchildren.

    I have no idea yet whether I’m going to be better off – as a retiree on a fixed income – under the new tax legislation than I was before it was passed, and I also don’t know how well federal and state tax revisions are going to play with each other when the time comes to figure out whether I have to send a check or will be getting one. But that’s personal, and tax laws affect the state and the nation, not just an individual.

    What every economist worth her/his salt will tell you is that ballooning the federal deficit – a signature feature of the Republican tax bill – much like running up a big credit card balance, will eventually have consequences far beyond the short-term electoral horizon that the current GOP seems to be using, and just like running up a big credit card balance, those consequences are going to be negative. The political party that used to be known for its fiscal conservatism has become the party of fiscal irresponsibility.

  6. Submitted by Brian Simon on 09/11/2018 - 01:23 pm.

    Where are the deficit hawks? Or are they going to save that argument until they’re back in the minority?

    • Submitted by RB Holbrook on 09/11/2018 - 01:37 pm.

      Oh, really, Mr. Simon. You don’t think The Deficit was ever anything more than a pretext to blow up the social safety net, do you?

      • Submitted by Curtis Senker on 09/11/2018 - 10:37 pm.

        “Blowing up the social safety net” comes from the same pool of laughable talking points as “underfunded public education”.

        And the truth (massive increases) have led to increased failure.

        Facts are often inconvenient.

        • Submitted by RB Holbrook on 09/12/2018 - 09:03 am.

          When it’s more money for infrastructure, we have to be careful and watch every penny “because of the deficit.” When the knives are being sharpened to come after Medicare or Social Security, it’s “because of the deficit.”

          When it comes to tax cuts for the wealthy, we here some hallucination about how it will “pay for itself” by spurring economic growth, despite all factual evidence to the contrary.

          Those are facts. Those are not what you have been told are mere “talking points” by whatever conservative website has given you your orders for the week. Facts, sir.

        • Submitted by Edward Blaise on 09/17/2018 - 02:28 pm.

          You obviously were not standing around the fire at keggars with Paul Ryan where they dreamed of blowing up the social safety net. Or so he said upon the passage of the tax bill:

          “Later in the interview, Ryan discussed the GOP’s efforts to reduce government spending on health care, specifically the party’s plans to alter Medicaid (the main health insurance program for the poor) by giving the states more control and “capping” the program’s rate of growth. “We’ve been dreaming of this since I’ve been around—since you and I were drinking at a keg,” he told Lowry. The remark drew loud laughter from the crowd.”

          These things: ” ” are quote marks indicating exact translation of written and spoken words. Otherwise known as the place you find facts.

  7. Submitted by Joel Stegner on 09/11/2018 - 01:24 pm.

    Are average people better off financially today? Hardly. Debt levels are very high, available money for a emergency very low pay increases maybe this year but not regularly, a few got a small bonus from the huge corporate tax cuts, costs of healthcare, higher education and housing sharply up, students leveraged up to their eyeballs (except for the trust fund babies), no real help for older workers impacted by age discrimination and layoffs. Not like average people are fully participating in the prosperity.

    But do Republicans notice or care? Are they willing to spend money to help? No, they have bright ideas like cutting food stamps, affordable healthcare and housing funds and even Medicare to pay for tax cuts to benefit themselves.

    And if Trump crashes agriculture and then our economy? What then? Will their greed subside? Trump has been quoted as linking all the opportunity to make money during the Great Recession, taking advantage of people’s suffering. That and not paying taxes is being “smart” as in there is a sucker born every minute. If you are smart and not a sucker, you will vote for TVs party who cares that average people have an opportunity Toto experience the American dream.

  8. Submitted by Steven Prince on 09/11/2018 - 03:05 pm.

    The Federal Deficit has gone up $100,000,000,000 (that’s billions folks) in just the first 8 months of 2018 (over 30%) under Republican leadership and thanks to their tax cuts. Imagine what happens to the deficit if the economy gets a cold.

  9. Submitted by Bill Schletzer on 09/11/2018 - 03:09 pm.

    Gee, how did you get quotes from Paulsen. You must not be a CD3 voter since he is so good at avoiding direct interaction with his constituents. He’s now trying to highlight the one vote out of scores where he didn’t follow Trump in order to make himself look independent. His only other ad on his own record is to call the budget buster tax bill a middle class tax cut. Since he has little positive to run on he focuses on attacking Phillips. He only won this district because he was following Ramstad, who was an honorable, moderate Republican.

  10. Submitted by Howard Miller on 09/11/2018 - 04:42 pm.

    Republicans doubled the deficit they were handed. They blew that largely on tax cuts for the wealthy, and a boost in defense spending. Of course revenue is down going forward, so the debt will accumulate in accelerating amounts.

    Meanwhile Trump plays footsie with international trade tariffs like a newly pubescent male, amazed at how he feels when dealing with LARGE matters. Contrary to the advice of economists of every flavor, except those few who report to him.

    Eventually that will catch up to aggregate economic results. If Paul Ryan engineers cuts to Social Security, Medicare, Medicaid on top of that …. and adds Tax Cut II … the rich will love him, but lots more Americans will be burned and feeling it acutely, and the Republican brand will have devoured itself in greed.

  11. Submitted by Frank Phelan on 09/11/2018 - 04:53 pm.

    How was the economy at the end of the last couple of GOP White House eras?

  12. Submitted by Tim Smith on 09/11/2018 - 08:23 pm.

    Pretty sad…

    Its the urban alt lefts job to tear down everything right now. No plans to spur the economy, wages., etc. they sat by an head nodded during the slow economic n wage growth years under the prior occupant. The world economy recovered, unemployment went down, and O takes all the credit. Hmmmmmmm

    • Submitted by Dennis Wagner on 09/12/2018 - 09:18 am.

      Hmmmm: Seems the left tore down the unemployment rate from ~ 10% in 2009 to ~ 4.8% in early 2017. Facts is facts! The “R’s” haven’t moved the needle 1%, but want the credit for the 5+%. Not to mention taking out a $1.5T pay day loan for the uber-wealthy to juice the numbers. Please give folks some credit, its disrespectful to suggest that folks will just fall for some comments W/O checking. . .

    • Submitted by Frank Phelan on 09/12/2018 - 08:34 pm.

      Give me a solid 12 months of real (inflation adjusted) wage growth for production and non-supervisory workers and get back to me.

      One just doesn’t cut it.

  13. Submitted by Richard Helle on 09/11/2018 - 08:49 pm.

    The GOP strip mines the economy. Tax cuts for corporation at a time of record corporate profits. Tax cuts for the wealthy at a time of the greatest income inequality since the ’20s. Milton Friedman and the Supply Siders were correct in that reducing the tax obligation for the wealthy and corporations produces tremendous wealth. The fantasy of this system is that a significant % of that wealth will trickle down to the middle class and the poor. That never happens. It doesn’t happen because the wealthy have no reason or inclination to allow even a trickle to flow anywhere but into their pockets. Trillions are sitting in banks on islands doing nothing.

  14. Submitted by Joe Musich on 09/11/2018 - 09:16 pm.

    So if memory and my search engine of choice serves me correctly the “it’s economy stupid,” was trotted out when the economy wasn’t doing so well. Some would have it winning the 1992 election. On the books the economy might look good for some but most it is not the some as many have pointed out here.
    But we If we go with the good economy premise then a phrase like the historical word play or that suggestion the economy is the reason to keep things in place is not as meaningful when it was originally used. Might be a great deal for the market and a little more water of the big toe for people on the other end of the spectrum, I really do not thing it will be what the election turns on. It will be babies in cages, nuclear insults, abrogation of world law and the greed arising out petulant heartless authoritarian capitalism.

  15. Submitted by Mark Iezek on 09/11/2018 - 11:06 pm.

    In the last hundred years, Republicans have had control of the White House and Congress for longer than two years only twice. The first was under Harding/Coolidge/Hoover, the second under George W Bush. We got the Great Depression and Great Recession. I don’t want to try long-term Republican control again.

  16. Submitted by John Evans on 09/12/2018 - 08:47 pm.

    Deficit spending to increase economic activity is what you call “fiscal stimulus”. It is a tool that you use to pull an economy out of recession. Obama took office at the start of a very deep recession, and the Republicans would only pass a relatively small stimulus bill. That’s why the recovery was so predictably slow. The Republicans claimed that fiscal stimulus was some Keynesian voodoo, that it wouldn’t work, and even if it did, it was immoral and would cause high inflation.

    Now, after the economy has recovered, the Republicans enact a much larger fiscal stimulus at a time when it is not needed. Of course the economy is growing! It isn’t rocket science or some business climate magic.

    But this is not sustainable. The next Congress and the next administration are probably going to be forced into an austerity stance to stabilize it. That’s the long con the Republicans have been playing.

  17. Submitted by Joe Musich on 09/13/2018 - 01:52 pm.

    And another thing, the vile that is ozzing out of the GOP machine in the form of advertising this year maybe enough to sink their collective destiny. The lyin liars have upped their lying game. Some of the twisting of facts in the Phillips campaign are so crazy that they remind me of the condition of the WH. Most citizens already do not trust the red if there is the least amount of fact checking done by voters the heavy handiness of the GOP advertising is going to back fire with voting explosions no Fourth of July has ever seem. Hey not a bad idea voting on the Fourth instead of a military parade should that still be on the agenda shortly.

  18. Submitted by Michael Hess on 09/14/2018 - 08:32 am.

    The GOP congressional reps need to defend why they did not try at all to protect Minnesota from the impacts of SALT deduction limitations. It’s unfortunate some of the voters who think their paychecks are bigger due to lower tax rates will discover it’s just withholding that dropped and with a step up in taxable income they now owe more, not less, due to the GOP tax bill.

    • Submitted by Frank Phelan on 09/14/2018 - 09:57 am.

      Well for that to happen, Democrats would have to be good campaigners. Not great, just good.

      Don’t hold your breath waiting for Democrats to take advantage of ready made issues.

      • Submitted by Dee Ann Christensen on 09/16/2018 - 12:16 pm.

        Have you seen or heard Dean Phillips campaigning? Not only is he a likable politician, but he is a fierce campaigner.

  19. Submitted by Mike Davidson on 09/14/2018 - 08:39 pm.

    For the GOP and Trump to act like Trump just came in and waved a magic wand for the economy is ignorant. Trump and the GOP are doing things that George W. Bush and his GOP-controlled Congress did from 2001 to 2007 before Democrats could provide a stop-gap. They slashed taxes for the wealthiest, raised military spending, funded two wars without putting one of them on the books, and deregulated as much as they could get away with deregulating. What did that get us? It got us the Great Recession.

    Under Obama the economy grew slowly at first, but we had six years of continuous private sector job growth, the stock market recovered and so did the economy. The economy was doing great well before Trump came into office. Trump has managed to keep the momentum going, and for that I am grateful, but we have not had time for his policies to have full impact. Trump and Congress gave bailouts to farmers because his tariffs had negative impacts.

    People think Republicans are great for the economy because they get a little bit up front, and continuously fall for the line that trickle down economics works. It doesn’t. It’s been proven time and time again, yet people keep falling for it.

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