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Oct-21-2010 01:55printcomments

21st Century Governance: A Plan for Oregon

The State must adapt to the circumstantial needs of society, but it should never lose sight of its fundamental purpose

Oregon capital
Photo by M.O. Stevens Courtesy: Wikimedia Commons

(EUGENE, Ore.) - Unsustainable. This one word sums up the condition of our State and Federal governments. Unemployment, debt, foreclosures, excessive taxation, corruption, and apathy: these are the symptoms of an unsustainable government and a failed political process.

The symptoms of our unsustainable government are acutely felt by the majority of the population. A minority who still enjoy positions of relative wealth and power are grasping for ways to reform the system that brought them their elevated status, but even they lack faith that they will succeed.

If fear and desperation are to be found amongst the unemployed who are facing homelessness, these emotions are even more pronounced amongst the relatively wealthy. The wealthy have far more to lose.

There is complete agreement on all sides of the political spectrum about the crucial problems our society faces. What is lacking is any cohesive plan for addressing our real problems. Since no practical policy proposals are on the table what takes their place is meaningless political partisanship, obsession with the irrelevant, and a thousand false promises and impossible schemes.

The only people with a real plan for dealing with the crisis of failed government and a failed economy are the “short sellers.” The people who are betting on collapse. Those who have invested in collapse and are doing everything in their power to see their investments realized by precipitating collapse.

Make no mistake, the multi-national corporations are betting on collapse. They have “diversified” their operations, at great cost, and the collapse of their domestic competition would greatly increase the profitability of their international operations.

Make no mistake, the wealthy individuals and corporations investing in building private armies, private intelligence operations, private police forces, and private prisons are betting on collapse. You don’t need a private army in a peaceful civil society. The backers of the Blackwaters and DynCorps clearly have a future in mind for the U.S. that is frankly terrifying.

Make no mistake, the Wall Street banks are betting on collapse. They are the ones who created the financial instruments and casino environment that actually make it possible to bet on failure and profit from disaster.

If you want to understand why the Federal government does not work, you must understand that a large chunk of the funding that gets politicians elected comes from individuals and corporations who are betting on a depression scale collapse of the U.S. economy. They stand to profit from such a collapse, and are doing everything they can to hasten this collapse.

Crucially, the people who are betting on collapse did not create the unsustainable conditions that make collapse likely. They may be cheering for collapse and seeking to thwart piecemeal reforms that would keep the wheels on in the short term, but the long term trends that portend economic and governmental collapse would exist with or without opportunistic speculators seeking to profit from collapse.

While the speculators on Wall Street may be amoral and sociopathic, which is good justification for keeping them far away from the levers of governmental power, they cannot really be blamed for having the intelligence and foresight to recognize that the U.S. is caught in an unsustainable downward spiral.

The 20th Century

What exactly is unsustainable about our government and economy? The most fundamental element of sustainability is the relationship between society and the natural resources that it depends on.

When America was colonized by Europeans if offered a massive bounty of natural resources. The natural resources offered by the United States and Canada were positively massive compared to the needs of the European population that settled this country. Consequently, the colonists focused their economic efforts on extraction and export of natural resources.

Extraction of prime natural resources is a highly profitable activity, and thus it resulted in rapid growth of the European population in America, and a progressive colonization of the entire North American land mass.

However, a high growth extraction based economy is obviously unsustainable over time. By the turn of the 20th century Europeans had seized all of the land they could, which meant that it was no longer possible to achieve growth through further colonization of the North American land mass.

This point in history thus signaled a fundamental shift in the operation of the U.S. government and economy. Further colonization of the North American landmass was no longer possible, which meant that further exercise of the colonial program (theft of land and extraction of resources) could only be exercised extra-territorially or through internal conflict.

In 1900 the population of the United States was 76 million and the population of Oregon was about 400 thousand. Today the population of the U.S. is approximately 300 million and the population of Oregon is almost 4 million.

During the course of the 20th century the colonial program was very much in full effect. Now, however, we have reached a point where the limits of international colonization have been reached and passed. Intra-national conquest, achieved through economic means by one class of citizens against others, has created an unsustainable distribution of wealth which cannot be maintained, let alone further extended.

The age of colonialism is over. Survival in the 21st century must be on the basis of a sustainable relationship between the people and the land. There is no other option.

The establishment of a government and economy based on a sustainable relationship between the people and the land cannot be achieved through institutions that were created to perpetuate colonialism, expansion, and exploitation.

A fundamental reconstruction of governing institutions, both Governments and Corporations, is a necessity for the long term survival of our State and Nation and People. This reconstruction cannot happen overnight. It will be the work of decades at least. However, it cannot commence unless its necessity is recognized and a cohesive program for reconstruction is laid out.

The State of Oregon

It must be recognized that citizenship in the State precedes and is superior to national citizenship. The U.S. was only created as a nation, and could only be created as a nation, by the combination of individual States and the consent of their citizens.

The first and most important political principle that must be recognized is that loyalty and duty to the State supersedes loyalty and duty to the Federal government, the United States. This is a fact of history and a fact of Constitutional construction. It is also a fact that the propagandists who favor the collapse of our nation would prefer that we forget.

The United States cannot be a strong nation unless it is made up of many strong independent sovereign States.

For every citizen in the United States, their primary political power exists in their State citizenship, not in their United States citizenship. The centralization of power in the Federal government, and the mass propaganda that makes Federal politics the focus of all policy discussion is purposefully designed to strip all citizens of their true political power, which lies in their State citizenship.

The State of Oregon, having just more than 1% of the U.S. population, has a corresponding proportional influence on the conduct of the Federal government. At best we have a 1% say in Federal policy. In practice, we have no say in Federal policy.

If Oregon is to have a strong sovereign government it must be based on unity between the people of this State that ignores divisions created by the national political parties. A strong sovereign government in Oregon must be based on the principle of defending State interests against a Federal government, multi-national corporations, and Wall Street banks that pursue policies fundamentally contrary to the interests of our State.

It must be recognized that the U.S. government is a creature of the North Eastern States, New York foremost amongst them. Oregon, and the Western States in general, are as much colonies of the U.S. government as the original 13 states were colonies of Great Britain. The Federal government owns 50% of the land in the State of Oregon, and most other Western States.

The original 13 colonies declared independence because they did not want to pay taxes to London. We are farther from New York and Washington D.C. than they are from London. Why do we pay taxes to them?


The real goal of tax reform should be ABOLISHING the income tax, at both the State and Federal level. Go ask the Republicans and the “Tea Party” how they feel about that. Good luck.

The workers of this State do not owe a dime to the Federal government. How is it that people who own nothing should pay taxes to the largest land owning entity in the State? The Oregon State government is the second largest land owning entity. Why should people who own nothing pay taxes to that body?

If there is no income tax, then how should the government support itself?

A property tax should be wholly sufficient to support a government. A property tax is perfectly proportional, in that those who benefit the most from government are the ones who pay for it.

In the State of Oregon there is one type of entity that is immune from income taxes. Foreign banks are immune from paying income tax of interest income from mortgages.

This situation is emblematic of all tax policy as it currently stands: productive workers pay the taxes; those who do nothing and collect income through financial speculation and fraud pay nothing.

Banks own a great bulk of private land through mortgages, and yet they pay no property tax on the land they own and they pay no income tax on the interest income their mortgages generate. Instead, home “owners” who may own only a small fraction of their land pay the entire property tax, while at the same time they pay interest to a foreign bank which pays no tax on that income.

A real property tax must not stop at land. All property: land, stocks, bonds, “intellectual property,” etc, should be taxed equally and indiscriminately. If it is listed as an asset on a corporate balance sheet, then it should be taxed as property. Taxation in this manner could be at less than 1% and it would be more than sufficient to cover all of the necessary spending of the State government.

Taxation of property would end the cycle of ever increasing government budgets. As it is, increasing incomes increase tax revenue proportionally. The real value of property very stable. If there were a tax on all property it would eliminate the motivation for the speculation and fraud that drives the current fluctuations in the market value of property.

Most importantly, a tax on property would assign the costs of maintaining government to those who benefit most from government. Government exists, in the main, to protect property rights. There is a perfect correlation between those who own the most property and those who benefit most from government.

A flat, fixed, and equal tax on all property would eliminate all of the absurdity of the income tax system, all of the deductions and loopholes, and all of the accounting tricks and nonsense.

It would allow the State government to fairly tax all of the foreign corporations doing business in the State, which is impossible to do with an income tax based system.

Usury (Money Lending at Interest)

The immunity that foreign banks enjoy from taxation of interest income should be reversed. Interest income should be taxed, and it should be taxed heavily, until we reach the point where charging interest in money lending is banned entirely.

Interest in money lending has no place in a rational stable economy. When a bank loans money at interest they take no risk and have only an upside potential. On the contrary, real investment involves taking risk. Thus, allowing interest in money lending fundamentally destabilizes the economy because it shifts capital from real investment to interest based money lending. Unless interest is completely banned we can never have a stable productive economy that rewards real investment.

We can abolish the income tax in Oregon. We cannot abolish the Federal income tax. However, if we rationalized tax policy in our State, we would immediately benefit from a significant shift in the balance of payments flowing in and out of our State. The tax burden would be shifted from our working citizens, who for the most part have very few assets, to the foreign corporations that own the bulk of the assets in the State.

Eliminating income tax immunity for foreign banks and then implementing a progressively increasing tax on interest income would also significantly shift the balance of payments in and out of our State and shift the tax burden from our productive working citizens to foreign financial speculators.

The Roles of Government and Business

Socialism, Communism, and Fascism all describe the same thing: the unity between private for-profit enterprise and the police power of the State. This is not a good thing.

The fundamental problem with socialism, communism, and fascism is that the State must be based on providing justice for its citizens. For-profit enterprise is based on competition and the benefit of one over another. When the State uses its police powers for the benefit of for-profit private enterprise it inevitably must abandon its primary role as a provider of justice for its citizens.

The United States as a whole has slipped into a dangerous combination of the State and private for-profit enterprise. This combination has clearly diminished the role of the State as a provider of justice and in turn it has destabilized our economy, where winners and losers are now decided by the police power of the State as opposed to being decided by economic productivity.

The combination of business and government corrupts both. Government, once it has a stake in the profitability of business, becomes corrupt. Business, once it is supported by government, becomes monopolistic, inefficient, and incompetent.

One of the great tasks for reconstructing society in the 21st century is to separate essential non-profitable (in market terms) government functions from private for-profit business.

One of the great lies, propagated by corporate propagandists, is that government is taking over business. In actuality, the truth is the direct opposite. Corporations, through the wealth of their members, have taken over government in order to enrich themselves.

The business landscape in America is even more starkly divided between “haves” and “have-nots” than the population generally. The “haves” are government backed monopolies which have eliminated or bought out all of the competing businesses in their industries of any appreciable size. The “have-nots” are the businesses run by individuals who do not pull the strings of corrupted decision making in government.

The competitive economy in the United States is a farce. The Federal and State governments control 30-40% of all spending in the economy directly. The secondary impacts of government spending effectively make the U.S. a centrally planned state-run economy, at least to the same extent as any of the “communist” nations ever were.

What is crucial to recognize is that some necessary social services cannot be effectively provided by for-profit enterprises: amongst these are education, public safety and defense, health care, housing, agriculture, and critical infrastructure (banking, energy, transportation, communications).

The test for what is the proper domain of government and what is the proper domain of private for-profit enterprise is easy: if the government cannot stand without it, it is an inherent government function.

A government cannot stand without the people being housed, fed, healthy, and safe. A modern government cannot stand without currency, transportation, energy, and communications.

The domain of private for-profit enterprise is, where possible, to provide products and services that are ancillary to the main necessities of society and government in the most efficient manner. Those products and services which are essential to society and government must always remain in the hands of the people directly or in the hands of the government through public agreement.

Private for-profit enterprise can be relied upon to manufacture toys and produce popular entertainment. It cannot be relied upon to provide the necessities of life. Making a mistake on this point is essentially suicidal. Some tasks, such as manufacturing tools, clothes, etc, can be delegated to private for-profit enterprise under limited conditions in order to increase efficiency, but only under close supervision.

Separating Business and Government

True governmental functions are not profitable in the conventional business sense. They are engaged in for the common good. They are necessary, in that society could not function without them, and yet their costs and benefits cannot be directly assigned to individuals. For this reason, it is foolhardy to attempt to assign essential government functions to the private for-profit sector.

However, there are a class of essential products and services that have historically been provided by the private sector, with government enforced monopolies and financing, such as banking, agriculture, energy, telecommunications, and health care.

The comingling of government and business cannot simply be ended. There must be a progressive and orderly reconstruction of the way essential social necessities are delivered to the public that bridges the gap between the current dysfunctional and failing system and a more sustainable long term model.

Crucially, it should be recognized that placing essential industry under public control is the direct opposite of imposing government tyranny.

The current system of delivering essential public services is tyrannical. It places control over the necessities of life and social well being in the hands of an elect few who posses monopolies enforced by the State’s police powers and who govern in secret and without any legal constraint.

Devolving power over the necessities of life and social well being from the unelected and unaccountable corporate elite, and returning control over these necessities to the people, is not an embrace of tyranny. It is an embrace of freedom, common sense, and sound governance.

Liars lie, and the propagandists for private tyranny have become very adept at infecting our political discourse and thinking with their deceitful doublespeak arguments against true freedom.

Taking control over essential social necessities out of the hands of private tyranny does not necessarily imply handing this control over into the hands of a centralized governmental tyranny.

Simply allowing the people to own their own property, organize freely under the law, and conduct their business without being assaulted by government supported monopolists would suffice to eliminate both state and private tyranny.

Do not buy into the false argument that placing constraints on private tyranny is itself a form of tyranny. This is the ultimate doublespeak lie, which is repeated ad nauseum in political propaganda. Placing constraints on private tyranny is justice. That is what government exists for. That is its one true legitimate purpose.

A Publicly Owned Corporation

Currently, the State of Oregon spends billions of dollars in taxpayer money every year on contracts with private for-profit corporations. The State gives away hundreds of millions of dollars in corporate welfare in the form of tax subsidies and direct payments.

Eliminating the income tax entirely, and implementing a system of equal taxation, would deal with the welfare kings and queens on the public tax subsidy dole. However, in order to staunch the flow of tax payer money into the hands of corporate welfare recipients through contracts and direct payments a more significant reconstruction of the State bureaucracy is necessary.

Some services, particularly education, essential services for children, defense, public safety, and the operation of government itself are inherently “unprofitable” in the market/business sense of the word. We engage in them as a society because of their necessity and intrinsic benefit, and yet their costs and benefits cannot be directly assigned to individuals.

These core governmental functions should be performed by the existing State government as it is currently structured. They must be supported by taxes, because the people who incur the costs for these services cannot pay. These are shared responsibilities, necessary to the functioning of society as a whole, which must be borne by those members of society with the capacity to pay.

The crucial separation from existing policy which must be made is that the State government must be barred from contracting with private for-profit entities in the provision of its essential core functions. This change in law would establish a firewall between essentially unprofitable public services and private for-profit business, thus eliminating much of the current incentive for corruption that exists in our system of governance.

If the State government were pared down to only providing its core services, and only providing them on a non-profit basis, this would eliminate at least half of current government spending. However, this action cannot be taken in a vacuum. If left to the “invisible hand of the market,” as the libertarians and tea partiers suggest, this devolution of government power would result in chaos and collapse.

What could bridge the gap between government and business, as it currently stands, is the creation of a publicly owned corporation, which would take over administering all of the current government spending that is currently being used as welfare for private for-profit corporations.

Whereas the State currently acts as a conduit for moving tax payer money from the people as a whole to a few chosen individuals and corporations, a publicly owned corporation would use this same money to perform the same tasks, while keeping the ownership and profits from this activity in the hands of the taxpayers who fund it.

A public corporation would exist on a level playing field and under the same laws as all existing corporations, eliminating any claims of undue monopolistic privilege. This corporation would be structured to give every citizen of the State an equal share, and it would be initially be funded through tax revenue on the same equal basis. Unlike the State government, this corporation would be expected and intended to make a profit, or at least break even, from its activities.

A publicly owned corporation, owned by the citizenry as a whole, would allow the people to organize and compete on a somewhat more equal level with multi-national corporations that match or exceed our State government in size.

As it is, taxpayers see their money being bled out through corrupt government into the pockets of corporate shareholders. Banning transfers between the State government and for-profit corporations would shut of the spigot of corporate welfare at the source. Creating a publicly owned for-profit corporation would allow our citizens to continue managing the money currently being dumped on the private sector, while retaining the assets and profits from this investment activity.

Most importantly, the creation of a publicly owned corporation, capitalized with tax dollars currently being spent on corporate welfare, would allow us as a State to move into critical industries such as banking, health care, and telecommunications.

This discussion is somewhat abstract, so let me give a few examples:

Every year taxpayers transfer hundreds of millions of dollars to private for-profit corporations providing health insurance. This money ends up in the hands of private for-profit hospitals, doctors offices, etc. We also spend hundreds of millions of dollars financing education for future doctors, nurses, dentists, etc. This system is insane.

If a public corporation existed, which could depend on receiving government contracts to the tune of a billion dollars a year, and could co-ordinate with other government expenditures on education and the provision of health services, it would be possible to break the grip of corporate monopolists on the health care “industry.”

The essence of establishing a publicly owned for-profit corporation is that it could legally compete as a private entity with any other corporation, and yet it would be controlled in exactly the same way and by the same people as our government. There would be no collusion between the government and the public corporation. The owners and voters would simply be the same people with identical interests.

Through a publicly owned corporation, the citizens of our State could combine to establish banks, insurance companies, telecommunications companies, and any of the other businesses that our essential to the maintenance of our society. Under our current governmental structure, the State is barred from participating in all of these industries.

Why should the people of Oregon own a bank? The bottom line is that the people of New York have a Federal monopoly on banking, and if we play by the rules they have made, we will always be paying taxes to them.

The people of Oregon pay interest, probably in the range of 3-7% or our GDP annually, to foreign banks. We pay transaction fees, over 1%, on every electronic exchange of money, which is now most of our consumer commerce. Can we afford to pay roughly 5% of our GDP in taxes to foreign entities which contribute nothing to the productivity of our State?

We already pay 20% of our income to the Federal government in taxes. How much of your money do you really want to give away? If you are going to give money away, then give it as charity for the needy, not as tribute to foreign banks.

A publicly owned corporation, owned by all of the citizens of our State, and capitalized with money currently being spent on corporate welfare, would immediately end the transfer of taxpayer money to private for-profit corporations. In the long term, it would completely reshape the relationship between the government, business, and the people.

The concept of a publicly owned corporation is too complex, and its implications too extensive, to do it justice in such a small space. I could write a book on the subject, including many examples of comparative institutional structures taken from around the world. For the time being, I will leave it at this, and present this concept as a “teaser” which should hopefully whet your appetite for a path past the absurdity of the fake capitalist/communist paradigm that our political discourse is rutted in.

Remember, capitalism is spending tax payer dollars on stadiums and welfare. Communism is spending tax payer dollars on productive industry.

Public Safety and Defense

Oregon Gov. Ted Kulongoski and
Tim King in Kabul, Afghanistan

As a sovereign State, we are invested with the responsibility of self defense. Our Governor is Constitutionally charged with the responsibility of being Commander-in-Chief of our State’s military forces, now consolidated in the National Guard.

Without claiming any expertise in military matters, I would observe that our current State government seems to be woefully deficient in executing its responsibilities in this department, and that a new course in the self defense department should be considered and discussed.

Our current Governor is the self-declared “longest serving war time Commander-in-Chief” in the history of our State. I would suggest that this is an ignoble honor. The practical self-defense capabilities of our State are non-existent, and our citizens have been deployed in fruitless foreign wars for a decade running.

What I would suggest for consideration is the creation of a Constitutionally mandated defense force for our State with compulsory service for all able bodied adults. Such a defense force would be constricted to exclusive service within our State’s territorial borders. Compulsory service would educate all of our voting citizens in both the practical and moral considerations of exercising military force for self-defense. Such an education would surely increase the understanding of our voting public, while at the same time increasing the general safety, solidarity, and social conscience of our citizenry.

The importance of a capacity for self-defense cannot be understated, and yet the adverse consequences of an improperly exercised military capacity are the greatest potential threat to the stability of our society.

Throughout history, the formula of a citizen militia, tasked only with self-defense, has been confirmed as the appropriate State organized military institution. This formula was shared between the Roman republic and Ghandi’s mass movement for non-violent resistance.

The right of self-defense is firmly established by history, and enshrined in our Constitution. This is a duty for all able bodied people of conscience.

The right and duty of self-defense is rooted in an understanding of natural law. If people are granted control over land then they have a duty to defend their right against usurpers who would despoil their land to the detriment of humanity in general. This is a sacred right/duty that supersedes all human governments, and consequently, it is irrevocable.

The people of Oregon have been granted a land mass of incomparable fertility, diversity, and size. It is no exaggeration to say that the citizens of this State have a sacred duty to faithfully exercise their stewardship over this land. A thoughtful and comprehensive social organization for self-defense is an inescapable aspect of this sacred duty, and it should be treated as such in our political discourses.

Noblesse Oblige

America is not a classless society. We have an aristocracy on many levels. If the masses are unaware of this fact, it matters little. If the aristocracy is unaware of this fact, it is the seed of their downfall, and the demise of our society.

Wealth, in particular productive property, is a responsibility and a duty. You either exercise your responsibilities and duties or you get replaced. That is the natural law as it has been passed down for millennia. If you disagree, argue with history.

The classical conception of social class goes like this: God has granted privilege to the righteous, and they have a responsibility to act as stewards according to the will of God, in accordance with the privilege they have been accorded. If you substitute “nature” for God you can shift that paradigm into the modern scientific parlance.

The bottom line is that humans are ants living on an unstable hill, controlled by forces and laws that are far beyond their control, which they don’t understand. Anyone saying different is a liar.

The appropriate response to wealth and privilege is to be terrified of the responsibility that has been conferred on you. Every dollar you have in your hand could feed, clothe, and house a person from your community. If you spend it frivolously, you are killing your community and killing yourself in the process.

The obligation of wealth should not be misunderstood. Humans are one community, and those who have been given more are charged with the responsibility of taking care of their immediate neighbors who have less. This is an obligation and a duty.

The obligations of wealth do not preclude living better than those in abject poverty. The flip side of this conversation is to recognized that many of those in poverty are there as a result of their own poor choices, for which no other person is responsible.

There is a clear responsibility to take care of all children, regardless of the conduct of their parents. The communal responsibility for the rearing of children predates civilization, and was recognized in the tribal era, when humans were little more than monkeys. If we should abandon such fundamental principles now, it is surely a sign of our imminent demise.

Ultimately, people of wealth must strike a balance according to their own conscience. However, they should never be deluded into thinking that they will not be judged according to their actions.

Justice and the Role of the State

Justice is the foundation of reality. All reality exists in balance and according to law without any contradiction. This is a philosophical truism. You can say Jesus, Allah, Yin and Yang, or the big bang, it does not matter.

Reality is what it is. One truth. One reality. One God. All of the antecedents being synonyms for each other.

Every person is inevitably bound to reality. It doesn’t matter if you call it God, nature, or scientific law. They are all the same thing.

Humans cannot create anything that exceeds their own position. When we combine to create governments, those governments are always subservient to our own individual limitations. We can never violate the laws that bind us individually by combination in larger social institutions.

Consequently, the only legitimate government is a government based on the fundamental reality of justice, balance, and harmony. So it is that the Rev. Martin Luther King Jr. said “The arc of the moral universe is long, but it bends towards justice.”

If an individual violates the law, they only hasten their own demise. If a government, a combination of individuals, violates the law, it only hastens its own demise. That is the law. It needs no enforcement mechanism. It is a law because it cannot be violated. There is no need for enforcement because transgression is impossible.

Violating the law is death, as sure as running off a cliff.

Providing justice is the most essential role of the State. Defending property rights can be a just role for the State, but it is prone to perversion through greed. Beyond that, the State must adapt to the circumstantial needs of society, but it should never lose sight of its fundamental purpose.

This is the immutable “law of nature and nature’s God,” as Thomas Jefferson put it. It can only be ignored at the price of personal destruction.

=================================== Business/Economy Reporter Ersun Warncke is a native Oregonian. He has a degree in Economics from Portland State University and studied Law at University of Oregon. At a young age, his career spans a wide variety of fields, from fast food, to union labor, to computer programming. He has published works concerning economics, business, government, and media on blogs for several years. He currently works as an independent software designer specializing in web based applications, open source software, and peer-to-peer (P2P) applications.

Ersun describes his writing as being "in the language of the boardroom from the perspective of the shop floor." He adds that "he has no education in journalism other than reading Hunter S. Thompson." But along with life comes the real experience that indeed creates quality writers. Right now, every detail that can help the general public get ahead in life financially, is of paramount importance.

You can write to Ersun at:

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