Standards II (revisited)

OK, the last post about standards drifted way off topic, or so it seemed to some. I tried to get a screen grab of an interview with the owner as seen on FOX News. Since I could not get a direct link to the clip, I grabbed it and reduced it in size to post. Unfortunately the video clip is still too large, even after I reduced the resolution by 50%, so here is the audio from the clip. The video just included stock footage that many have seen before. The point is that he took the effort to exceed standards, deeper pilings, special windows and accepting the fact that the first floor would be swept away.


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Trumponomics vindicates TKC 1101

TKC 1101, you were right.   You have been consistently correct on the American economy.   I have enjoyed your anecdotal approach to the underlying economy, the bottom-up view that told us that President Trump was on the right track to put America back to work and make America great again.   The gang of smart people at BallDiamondBall are similarly vindicated.

You are going to enjoy this article, even though you have to go to National Review to read it.  Deroy Murdoch has a great article up, titled “Obama Didn’t Build That.”   D. Murdoch uses a few good illustrations to completely dismantle Obama’s efforts to take credit for the Trump economy.

Murdoch’s illustrations come from a White House press conference that was held on September 10.  Sarah H. Sanders hosted while Kevin Hassett spoke.   K. Hassett is the Chairman of the White House Council of Economic Advisers.   I will provide links in the comments.

The Trump economy rocks.

Naysayers

I had a good laugh listening to NPR’s “Marketplace” coverage of the stock market highs.   They tried to look past all those bright thick silver linings to find little patches of dark cloud that they could focus on.   Other NPR shows have been very similar for many months.   They try so earnestly to let us know that most of the news is bad if you just know where to look.   They have to look really hard, and they can generally find some metrics that are not much different than they were under Obamanomics.   I enjoy the transparency of their frustration.   But “Marketplace” had me howling as they explained that other markets are down while ours is up, tried to brush it off, and then admitted that they are perplexed that, considering the international trade war, global investors are betting on Trump and America.

Here is an excerpt from the Politico, who seem to be cheering for a “Blue Wave” in November:

Hassett denied his appearance was prompted by a Friday speech in which Obama said, “When you hear how great the economy’s doing right now, let’s just remember when this recovery started.” The current economic expansion began in mid-2009, six months into Obama’s first term.

Trump replied shortly afterward at an appearance in Fargo, N.D.: “He was trying to take credit for this incredible thing that’s happening. … It wasn’t him.”

The dispute goes to the heart of Trump’s arguments this fall. Facing ugly projections for a GOP rout, the president is trying to persuade voters to stick with Republicans by arguing they’ve delivered an economic turnaround. But many major gauges on economic growth and job growth were just as strong during parts of the Obama years, even without Trump‘s deregulation and deficit-boosting tax cuts.

“One of the hypotheses that’s been floating around,” Hassett said in the briefing, “is that the strong economy that we’re seeing is just a continuation of recent trends.” But “economic historians will 100 percent accept the fact that there was an inflection at the election of Donald Trump, and that a whole bunch of data items started heading north.”

 

TKC 1101

TKC 1101 has been bringing us an occasional cheery message from his experiences as a business consultant.   He anticipated the trend, spotted early signs, and has kept us posted with updates.   I really enjoy those posts.   Thank you for the encouragement.

My own experience is in a sector that lags the general economy.   The vibe has been positive for months, and it is beginning to show up in terms of real work.

Go, Trump, go !

MAGA


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Curmudgeon Musings on A Milestone Task

We began a key milestone task this weekend. We started to narrow down where we will buy our last residence.

I know the usual key criteria but they all fall by the wayside:
1. Overlapping fields of fire
2. High ground
3. Good location when Yellowstone blows, or the Cascadia fault goes, or Mt St Helens does a repeat
4. Water supply
5. Ability to hinder access by explosives when the starving urban mobs roam the countryside.

So we settled on the really important criteria:
1. No Income tax at the State level
2. Single level house- the knees , hips and ligaments have seen better days and stairs are the enemy.
3. Must have three bedrooms so one can house the office and gym
4. Must have AC and Internet, the two elements of an advanced society.
5. Must be reasonable distance from grandchildren and children.

It is a bittersweet task as we drove the ever shrinking zone of opportunity. It is the reality of time shrinking as we go along our usual paths, day by day.

I am exploring the various financing , including a reverse mortgage. I do so love the idea of a bank forced to wait until the last one of us kicks off to get their money back.

I do figure I can make a case to St Peter that “I need five more years so I can really piss of my banker”. He might go for it.

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Book Review “The Autodesk File”

A comment John made (#18) on a recent post by 10 cents (“Programming Question”), reminded me I had reviewed one of John’s books. The review was posted a while back on the legacy site. As this is one of the most worthwhile books I have ever read, I thought it should be posted it here.

A work of non-fiction is understood in a context. A great work actually articulates the context before anybody else gets it. A review of such a book may go seemingly far afield, if the book’s power can be construed to provoke and, indeed, license the inspired musings of its readers. Such is the case here, as “The Autodesk File”’s roots are deep in the intellectual, technological, economic, financial, and even spiritual soil of this, the spring garden of the information age.

When was the last time you couldn’t put down a book which had not a single murder, courtship, love or sex scene? OK, I’m not counting some ancillary trysts consisting of mergers and takeovers, which some might construe as sexy, or at least allude to being on the receiving end of a certain Anglo-Saxon gerund. This book contains no obscenities, save a rare mention of taurine spoor. That serves as a welcome reminder: important ideas and even emotions are amenable to description sans vulgarity.

Lest one think this a narrow commercial exposition, “The Autodesk File” is in the public domain in multiple formats. Neither is it a mere exposition of commerce. About half way through, amidst essays explaining the nature of businesses dealing in intellectual property (rather than capital-intensive equipment), the reader is treated to a short science fiction story whose theme is no less than a plausible tale of the origin of human life. Our bodily construction is, after all, prescribed in lines of code, albeit compressed into helixes wound around themselves then wrapped around histones. Like some of their software counterparts, they, too, must be unzipped before use.

Also punctuating this eclectic opus are quotes from Aristophanes. It is a tour de force, a truly awe-inspiring account of much more than the building and workings of one trailblazing company. It encapsulates the noblest of human aspirations, idealizations, creativity, ingenuity and critical self-examination; inescapable is the conclusion that voluntary cooperation and exchange of ideas, knowledge and capital is a great boon to the world at large. If a business is built to serve the needs of customers by creating products of the highest possible quality, greed is not a good; it is irrelevant. Also inescapable is the perhaps ironic conclusion that ongoing success requires continual vigilance, lest arrogance take hold. The fruition of critical self-examination can be seen in renewal of that same humility which was so essential in powering that first whiff of success.

Nonetheless, apart from arcane sections dealing with technical matters of computer hardware and programming (these, too, may be great for the cognoscenti; this writer simply knows too little), this book is a spellbinder. Readers may be surprised to be persuasively regaled with the fundamentals of various disciplines, including economics, finance, taxation, corporate law, engineering, computer science, thermodynamics, rocket science, quantum mechanics, cosmology and the nature of reality. That is, readers who don’t know John Walker. For those who do, none of this is surprising.

Have you ever had a million dollar idea? I have – lots of ‘em. Have I turned even one of those ideas into a product? Nope. Why not? Because I lacked the understanding, the talent, and the single-minded discipline to even get one idea off the ground. This book, edited by Ratburger’s own John Walker (himself author of most of the collected writings), is a chronicle of birth, growth, crises and maturation of Autodesk Inc., whose products helped unleash the creativity and productivity of millions of people. It did so beginning with a key insight: that the infant personal computer was a general tool and not a specific workstation. As a general tool, through the intelligent design of software, it would rapidly evolve in utility in virtually every field of endeavor, beginning with design. Design, in this line of thinking, is a logical first step down the path which aims, eventually, to capture all of reality in the box we call a computer. This stunning insight occurred while all the rest of us still went through our days typing on an IBM Selectric, without once even using the word “computer.” Way back then in 1980, virtually none of us thought about computers or any of the other words and things without which our lives today would be unimaginable. Historically speaking,1980 happened yesterday.

An additional insight guided Autodesk’s ethos: that personal computers would grow exponentially in processing power and become useful by ordinary people (with no computer or programming skills) to undertake virtually any task. Autodesk’s first product,  AutoCAD, moved design from a small number of dedicated, expensive CAD workstations operated by highly-trained people, to desks virtually everywhere where drawing might be needed. In the process of “squeezing too much code into too small a box,” Autodesk did not compete with previous generations of single-purpose CAD workstations which cost 10 – 50X as much. Instead, it created and increased a market for CAD by the same orders of magnitude, by bringing this tool to the 98% of designers and draftsmen who could not afford dedicated CAD workstations.

In less than one year, this new company had a hit product. Time to rest on one’s laurels? How about after the IPO? Time to coast? Not quite. Going into the CAD business – and that is the business, as opposed to the software business (read the book to learn why), is something like launching a rocket from Earth and hoping to land on a comet and send back data – all except that the precise trajectory of the comet cannot be known, and its surface material and contours are completely unknown. The difficulties were perhaps not unlike those encountered by the ESA’s $1.8 billion Rosetta/Philae spacecraft which did rendezvous and land on comet 67P. Philae’s tether harpoons failed to fire, so the probe bounced and wound up in a permanently-shaded spot (due to an unanticipated hard surface, they likely would not have worked anyway), preventing use of solar power. Batteries enabled an estimated 80% overall mission success. AutoCAD’s launch – with $59,000 in capital, mid-course hardware and software corrections and “landing” on users, by contrast, remains successful to this day.

“The Autodesk File” attributes success to the company’s understanding that it represented what it coined “The New Technological Corporation.” This is an an enterprise which does not conform to traditional capital-intensive business, as it can deploy intellectual, debt-free leverage. Such businesses embrace an unpredictable but essential element: “wild talent.” This talent is a necessary but not sufficient condition for success when it comes to creating software, which is unlike most all prior businesses. Rather than capital, such entities require a peculiar kind of talent – one which grasps the present desires of a market, knows what is possible with present hardware and the correctly plots the trajectories of both the market and evolving hardware. I believe it to be objectively true that the editor is faithfully and humbly describing the truly awe-inspiring talent he, himself, brought to Autodesk. Other such individuals, like Jobs or Gates, are known in the early computer and software businesses. Few, however, have operated as willing members of an extended team with humility, dedication to excellence and human decency. If nothing else, “The Autodesk File” shows how this can be accomplished. 

Attempts to find individuals with “wild talent” are most difficult, maybe impossible. “Wild talent” illustrates the essential difference between aggregate information, traditionally used by analysts to “value” companies which trade on public exchanges, and actual events which take place within any company. For instance, money spent on R&D is aggregate data which subsumes the activities of many employees of a given company. Whether it means the company will grow really depends on what individual employees accomplish. When it come to software, the outcome will be notably different for R&D teams which play it safe versus ones which continually push the envelope of what may be remotely possible. Intellectual leverage is such that the cost of failure of 8 out of 10 ideas is far outweighed by success in only 1 or 2 of them. The presence of such loyal individuals is also a bulwark against hostile takeovers. You can lead a programmer to the R&D department, but you can’t make him plink – at least not in the way which is essential to success.

Perhaps most revealing about this unusual book is the ongoing critical self-examination engaged in by the primary author. These analyses were distilled into the form of internal company communications as essays and information letters.  At many points in the journey, the author is able to adumbrate the – sometimes previously un-articulable – principles which guided his often momentous insights. These usually arose in chaotic circumstances with incomplete information. The essential humility of this approach is demonstrated at various points in the book. Repeatedly, the author makes clear the importance of open communication and understanding of the roles of all the other parts of the company. A programmer, for example, must understand management’s plan, what customers want, how a product will be marketed and shipped, what competitors are doing, etc. Only then can a “wild talent” be effective.

 “The Autodesk File” is a much-needed reminder that human beings are still capable of doing awe-inspiring, creative and even noble things; that they can voluntarily collaborate and, working in their own self-interest, set off endless waves of non-zero sum games in their wakes. This is also a success story, then, a chain of decisions, clearly rooted in the philosophy of Classical Liberalism – in some of its untidy and altogether messy human details. Without aiming to, this story affirms the primacy and value of the individual, both as producer and consumer; it convincingly shows that communication – positive and negative feedback – between individual, voluntary buyers and sellers – is the essence of what a market is. This is in contrast to statist dirigisme, where aggregate data and arrogance rule, in derogation of the value of the individual. 

Diametrically opposed to today’s received collectivist wisdom, “The Autodesk File” shows how individuals create markets where none previously existed, to the betterment of all. From those roots emerge timeless operating principles: 1. build the best products, period – with open architecture so as to invite developers to customize and find as yet undreamed uses (an essential form of feedback for software companies), thereby further expanding markets; 2. invite, quickly assess and respond to this feedback from customers in the form of improved new releases; 3. employ owners, not merely ‘investors’ – pay well for results – with ownership whenever possible. This is a story which demonstrates the huge difference between owners, whose time preference is long and investors focused only on the forecast for the next fiscal quarter. The tyranny of industry analysts, a form of economic lunacy where short time preference is brutally and pervasively enforced on behalf of “investors,” operates so as to threaten the short-term existence of sound public companies which actually attempt to pursue the best long-term business practices.

In a somewhat philosophic interview around the tenth anniversary of Autodesk, the author/editor describes the operation of a new “design cult” of engineering as a “form of creationism, which thinks its members are so omniscient that they have no need for market-driven evolution to perfect their efforts.” This view, coupled with the information letters, again displays an essential humility in the ethos of Autodesk. Management must lead toward explicit goals. Every part of the organization must understand and communicate with all others, particularly as it affects product development. This is not the typical hierarchical corporate ethos. Neither is it anarchy. Management must lead, but not without listening, understanding and explaining. 

It is difficult for this writer to refrain from drawing parallels to the author’s description of this “design cult” of engineering. Such an attitude is not surprising, given that we live in a society which increasingly and officially denies the existence of a supreme being, while at the same time acting – through a “cult” of increasingly centralized authoritarian government – as though it were omniscient and omnipotent; as though its policies have no unintended consequences; as though no cost is too high to accomplish its goals, whose only feedback is its own reverberating positive-feedback echo chamber. It is hard to know which cult is imitating which. In either case, the state-erected obstacles to starting and running a business, while not emphasized, are on display in this epic. This common ethos of the state and large corporations has inevitably given us today’s pernicious corporatism.

It may be that the most significant intellectual error of our time is the belief that society can be modeled and manipulated as well as physical reality now can be, thanks in large part to private companies like Autodesk. Unlike government, though, companies are forced to relearn their limits – i.e., lessons in humility are given, at least annually, and enforced as necessary by balance sheets and owners. The fear of going out of business would be a highly salutary fear for modern government to experience. Instead of a healthy humility, however, the state often displays antipathy toward private enterprise – ironically, the very source of its own financial power. The public relations nature of this attitude  likely represents either envy of private successes and/or virtue signaling in an effort to garner votes in the incessant lust for yet more power.

God is traditionally described as a jealous God. Do you suppose that our deity/government has its own version of the Ten Commandments, the first of which explains its animus toward private enterprise? “Thou shalt have no other Gods before Me…” …otherwise put, “Trust me. I’m from the government.” “I’m here to protect you from those big, bad, corporations.”

Thus, as you may see for this reader, the story of Autodesk led to much contemplation of human nature and the whole spectrum our interactions – both voluntary and coercive. It is an inspiring and epic tale of the utility and nobility of voluntary cooperation.

“The Autodesk File” is in the public domain. It is available in several downloadable versions. All formats are accessible here: http://www.fourmilab.ch/autofile/


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All Is Quiet On The Firing Line

Today I sat down with one of my clients, the owner of a specialty fabrication and installation business. His primary customers are General Contractors and Designers who are shepherding their clients through a full home remodel. He does work on fittings for commercial and residential buildings.

He and I have been together for ten years, and I have advised him through tough times, a Chapter 11, an extinction class lawsuit and the buyout of his partner.

His business is roaring good right now and we discussed the biggest factor to manage in the next two years.

It revolves around attracting and keeping a team of employees who would rather slit their wrist than work anywhere else. In boom times, that ends up being a key trait to capturing the prosperity flowing through the company and not watching it all just flow out as well as in.

We are working on incentives and work conditions and are finding that our healthcare package is bringing in some of the best talent.

There is a sense that serious employees are serious people who worry about things like coverage and protecting their future.

All of them are refugees from Obamacare.

Just another report from the front.

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The End Of The World As We Know It And I Feel Fine…

All this talk of where we are headed, the clashes of the parties, the globalists and the populists, urban versus rural, deplorables against the social Justice warriors, reminds me that we are experiencing not an evolution, or a change but a tectonic perception shift of how our human universe works.

The BBC ran an excellent series called “The Day The Universe Changed quite long ago, which in a number of individual hours, with wit and incredible visuals coupled with story telling relayed how a series of events set in motion a completely new way of thinking about the things we believe to be true.

I do believe we are entering such a time, where the commonly accepted worldview of globalists, a belief in the institutions of media, higher education, and the guiding hand of an elite corps of wise ones who can guide global affairs in money, culture, peace, medicine, and welfare is burning like the Hindenburg at Lakehurst New Jersey. Oh the humanity.

Is it nostalgic for a nation to shut down the means of production in the age of robotics? When labor cost in the manufacture of goods is not the determining location factor? Does a nation concentrate and protect necessary skills for the future which include manipulation of physical objects as well as digital ones?

Can a constitutional republic exist in a world where only 10% of the citizenry is gainfully employed? I think not.

The global elitist worldview of sending manufacturing elsewhere, increasing the cost of higher education, high taxes, massive regulation, concentration of finance into a few large institutions, concentration of entertainment and news media to a handful of companies, opening borders to drive low skilled wages down, importing talent to drive high value wages down, engaging in wars without intent for victory, setting up permanent trade disadvantages for the USA has been rolling along since the 1970s. There was a brief break for the Reagan years where the Cold war was scrapped despite the efforts of the globalists to keep it going.

That era formed the thinking of several generations of people in influential circles.

Then a man from Queens comes down an escalator and the Universe Changed.

Despite the best efforts of the old guard, the new Universe is on display and people will not go back to the old mode of thinking.

The early adopters are the small business owners who can move fast, reposition wealth from the stock market to new assets in an afternoon.

Blue Collar employees see a different world for their future.

Well managed States are being rewarded with investment and new people fleeing the poorly managed states.

Academia has managed to let millions of students run up over a trillion dollars in debt (majority of them are female) and granted a large percentage of degrees with almost no useful skills attached.

I do expect this cannot be sustained.

I cannot recall an event where so many institutions have shown themselves to be beyond a shadow of any doubt incompetent, corrupt and unaffordable.

The universe did change and it will be interesting to see how people adapt to the new reality.


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cheap metals

A couple of months ago, when President Trump first began threatening tariffs to make our international trading more fair to U.S. businesses, I posted about listening to NPR coverage of the hog crisis.

There must have been a crisis; I heard a vignette on every news show on NPR about pork production.  They spent two weeks focused on hog farmers.  We must have heard an interview with every hog farmer in America who was willing to say something critical about the proposed tariffs.  Of course, NPR kept making the point that the farm community had voted overwhelmingly for President Trump, and they repeatedly implied that President Trump was betraying the people who had voted for him.

Over the past three weeks I have heard a similar focus from NPR.  I think I may have heard every small business in America that uses steel in manufactured products.  They speak critically about how tariffs might harm their businesses.  NPR spins this into an anti-Trump campaign.

For the past couple of days the story about steel changed slightly.  Now I keep hearing different Europeans and Europhiles declaiming how the tariffs recently announced by Team Trump are “unjustified” and “illegal.”

At least, on NPR, their long format means that eventually you will learn something useful.  I heard a particular interview with a U.N. spokeslady.  She explained just how it is that the proposed tariffs are considered illegal.  President Trump says that a healthy metals production capability is needed in America for national security reasons.  She says that this is not true, because America can always import all the metals we need from our friends and allies such as Canada or the Europeans.  The fact that American metals production industries are getting killed by unfair foreign subsidies to metals producers should be of no concern.  And, the tariffs are being put forward under a provision of international trade law that invokes national security.  So we should just relax, let our metals production businesses fail, and go forward in reliance on our friends and allies in Europe and Canada.

Thanks to NPR for that clarification.  Now I understand why these tariffs are so desperately needed.

Go, Trump, go.  Do not trust our “friends and allies.”  Make America strong again.

MAGA.


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Faith Restored

Today I talked to a restaurant manager and a construction sub contractor. I was sitting there, sipping coffee from the thermos and a realization dawned on the common thread.

Both were struggling with keeping their places staffed

Both were saying it was hard to find people

Both were saying business was booming

Both looked a bit like deer in the headlights.

These were seasoned guys, not novices, but it came to me that it had been before their time since this pattern had occurred. A hot labor market, raising wages, shortages of skilled people.

We have as a nation forgot how to handle this, coupled with managing a touch of inflation in materials along with spot shortages due to high demand.

Ah well, time to dust off the old experience, long filed away , and describe “the way we did it back then….”

I cannot stop smiling these days. My America is back, at least in part. I do see opportunity shining in the eyes of the young folk, the blessed light of fresh possibilities that fires the soul of Americans.

Political Correctness cannot stand in the way of that force. Division cannot stand. Their forebears told the establishment to stick it and headed west. I have faith that will come again.

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TOTD 2018-05-04: Why Gold?

I often hear of people talking about the joys of returning to a gold standard.  Why is gold the choice people fix on?

Now, currency is based on its ability to be exchanged for something.  Right now, the US dollar is valuable for being able to pay debts to the US Government.  Even if everyone else refused to accept US currency, you could still pay your taxes in US greenbacks.  This is what gives it value – ability to command labor.  (This is why I have been skeptical of BitCoin etc.  There is a significant chance that BitCoin could end up without any possibility of exchange.  There is nothing backing these cryptocurrencies.)

However, gold is not that useful compared to many other metals.   Why choose it, as opposed to numerous other metals and alloys?

For example, aluminum.  Aluminum’s value is directly related to the availability of electric energy to refine it from bauxite.  It is an enormously chemically useful element, and forms a passive aluminum oxide coating on its surface, protecting it from corrosion.  It is reflective, electrically and thermally conductive, and extremely light weight.  If there was an apocalyptic event,  refined aluminum would be worth more than gold.  (This is one of the most accurate elements of the Fallout series of  parody post-apocalyptic video games.)

Titanium is another extremely useful metal that has excellent strength to weight and corrosion resistance.   It has many of the positives of aluminum, only taken to a higher level.  It is very difficult to work or shape, which may reduce counterfeiting.

Now for a real oddball – Uranium.  Uranium of natural or low enrichment is directly useable for energy.  It is incredibly dense in energy.   A Uranium standard could be directly related to energy prices, and a Uranium Note could be exchanged directly for nuclear generated electricity, as well as uranium itself.   This has benefit of being great for the environment, but also ticking off the hippies by being nuclear.

So, anyone up for nuclear nickels? Fission dollars?


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Hog production crisis

There is a crisis, right?

There must be.  Every news report on NPR this week, and I mean every one, morning and evening, has featured a very long feature about the plight of poor pig farmers.  They are in crisis.  Their profits are down, prices are down, their outlook is down.  The poor, poor hog farmers are sorely oppressed.

They are being oppressed by President Trump.  He is mean; he is brutal.  He is waging war against the downtrodden stalwart hog farmers.

This week on NPR was all hog farmer all the time.

Now, I am sympathetic to the hog farmer, but you had to go elsewhere to learn that the U.S. is second to Germany in pork exports to China, and that per capita consumption of pork products has been growing at over six percent per year in China this decade.

And perhaps it informs any conversation on the topic of the economics of pork to recall that the price of corn (a common foodstuff for pig farmers) is inflated by government subsidies of ethanol.   And NPR has a reputation for diving into the details of complexities, and so they have, if you listened very carefully.  They did advise that pork exports to China amount to nearly 11 % of pork exports, but they did not report that this is a recent high mark.

The casual listener would be excused for coming away from this series with only one lesson.  “President Trump has been callous to his agricultural base and is being mean to American farmers with his stupid tariffs on aluminum and steel, which cause American producers of swine products to suffer.”

 


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