Guest Post by Willis Eschenbach
I was reading an interesting article, paywalled sadly, called “Detecting Novel Associations in Large Data Sets“, by David N. Reshef et al. It describes a subtle method for detecting relationships in datasets. Their method is called “MIC” for maximal information coefficient. The MIC coefficient measures the strength of the association of the two datasets. A value of 1 indicates a very close association, while a value of 0 means random noise. Their MIC coefficient outperforms traditional indicators for a range of complex non-linear types of relationships, including sinusoidal, circular, and multiple additive relationships. This is because it makes no assumptions about the shape or form of the association. It’s a fascinating method, one I want to learn more about.
One of their test cases involved looking for a relationship between a range of global indicators. Here is a list of their results, sorted by MIC.
Figure 1. Significant associations as indicated by the maximal information coefficient. Traditionally, the association would be measured by the Pearson coefficient.
The odd one out in this list is MIC rank 3, the association between oil consumption per person and income per person. The Pearson rank of this one was 207, while the MIC rank was 3. So I was motivated to take another look at the question of energy and development.
To do so, I used “Gapminder World”, an amazing online tool for visualizing data. Figure 2 shows an example. This is a comparison of average energy use and income, both on a per capita basis. Each country is represented by a “bubble” in the diagram.
Figure 2. Bubble plot, by country, of per capita energy use (vertical scale) versus income per person (horizontal scale). Note that both scales are logarithmic. Size of the individual bubbles shows total energy production by that country. Color of bubbles shows total oil production by that country. Units of energy use are tonnes of oil equivalent (TOE) per person per year. SOURCE
As you can see, there is a clear and quite tight linear relationship between energy use and income. This leads to an inexorable conclusion. You can’t get out of poverty without having access to affordable energy. Figure 3 below shows the same data, with larger energy producing nations identified.
Figure 3. Bubble plot, by country, of per capita energy use (vertical scale) versus income per person (horizontal scale). Note that both scales are logarithmic. Size of the individual bubbles shows total energy production by that country. Color of bubbles shows total oil production by that country. Units of energy use are tonnes of oil equivalent (TOE) per person per year. SOURCE
The bubble size shows that the US and China are about tied for top country regarding total energy production. Russia is third, the Saudis fourth, and surprising to me, India fifth. The colors show that for Russia and the Saudis most of the energy is produced from oil (red) while for China and the US coal is also a major source. India’s energy is mostly coal.
Figure 4 below shows the same basic energy vs. income chart, but in a different way. In Figure 4 the bubble size is energy production per capita, rather than total energy production. All of the bubbles are in the same location, but are changed in size.
Figure 4. Bubble plot by country of per capita energy use (vertical scale) versus income per person (horizontal scale). Note that both scales are logarithmic. Size of the individual bubbles shows total energy production per capita. Color of bubbles shows total oil production. Units of energy use are tonnes of oil equivalent (TOE) per person per year. SOURCE
We can draw some fresh conclusions from Figures 3 and 4. One is that you don’t have to produce a lot of energy, either per capita or in total, to have a modern industrial developed economy (lots of small bubbles at upper right). The Netherlands and Japan are examples. The second is that if you have high energy production per capita, it is easier to have high per capita income (preponderance of large bubbles at upper right).
The Gapminder website also allows us to look at the history of the various countries. Here is how some countries have evolved over time. Label lines show the start of each record.
Figures 5 and 6. Same as Figure 3, but showing the evolution of some countries 1971-2007. Size of the individual bubbles shows per capita energy production by that country. Color of bubbles shows total oil production by that country. “Trails” show the year by year values. Note that both scales are logarithmic. Fig. 4 SOURCE1 Fig. 5 SOURCE2:
Some comments on the historical figures. First, the direction you’d love for your country to be moving over time would be down and to the right. This would mean using less energy while making more money. Generally, almost nobody is moving in that direction overall.
The bad direction would be up and to the left. That would be using more energy to make less money. Ugly. The Saudis have moved that way in recent years.
Some countries took the worst quadrant, down and to the left. This is where you are using less energy, and you’re also making less money. Zimbabwe and the “Democratic” Republic of Congo did that. Bad sign. It’s de-development, and it generally involves suffering for both humans and the environment.
That leaves the fourth quadrant, moving up and to the right. Using more energy and making more money. Commonly called “development”, AKA getting out of poverty. Making enough money to be able to afford to protect the environment.
The game is to move to the right as much as you can (increased money) and upwards as little as you can (increased energy). So Bangladesh is not doing as well as India in that regard, since it is moving upwards more steeply. China was doing as well as India in the 70s and 80s, but has sloped upwards in the last decade of the record. Note that India is producing the majority of its energy from coal.
Russia went down and to the left in the early nineties, but has since recovered and nearly doubled its income without much increase in energy. Curiously, the income is now back to the 1990 level, but the energy use is less. The same is true of Uzbekistan and many other former members of the Soviet Empire. To their credit, they have fought back from the breakup of the Empire and returned in a more efficient form. Indeed, the Uzbeks have gone down and to the right in the last decade, and that’s the holy grail of development, doing more with less energy.
The poor Saudis, on the other hand, ended up going almost straight up (more energy used to provide the same income), and even lost a little ground. And Senegal has gone nowhere at all.
Japan, China, Mexico, and Australia have increased their per capita energy production over the period (bubble size), while the US and Russia have stayed about the same. The total oil production for the US has fallen (bubble color) while for China it has increased. Russian oil production fell and then has come back up.
The US and the UK have done a curious thing. Per capita energy use for each country in 2007 was about the same as in 1979. But income went up. Both countries nearly doubled their per capita income, with basically no increase in per capita energy use. Not sure what they are doing right, but we should figure it out and clone it …
Conclusions and final notes:
1. Development is energy, and energy is development. Although efficiency and conservation can help you, in general you must increase energy use in order to increase personal income enough to get out of poverty. If you make energy expensive, it is hugely regressive, as the poor countries and the poor people will simply not be able to afford it. Carbon taxes, “cap-and-trade”, or other energy taxes are a crime against the less favored inhabitants of our planet.
2. Large countries with higher transportation costs will use more energy per dollar of income than do small countries.
3. Within the limits of the “cloud” of countries shown in Figure 3, it is possible to increase energy efficiency, and to make more money using the same amount of energy.
4. Countries that produce lots of energy tend to waste it more than countries that produce little.
5. The preferable place for any given income level to be is on the lower edge of the “cloud” of countries with that income. This is where you get the most bucks for your bang. Many European countries are in this position. The US and Canada are about in the middle of the cloud. However, as noted they are much larger than the European countries.
6. China, India, and Bangladesh had about the same per capita income in 1971, ~ $700 per year. The differences in their current positions are large, with Bangladesh at $1,400, India at $2,600, and China at $6,000 per year.
7. Sadly, the datasets only go up to 2007 … it would be interesting to see the reduction in both energy use and income due to the global financial meltdown.
8. Finally, when someone says the word “technology”, many environmentalists think “bulldozers”. Instead, they should think “energy efficiency”. At the end of the day, technology is about doing more with less. Technology is what allows us to use less gasoline to go a mile. Through some combination of conservation and technological advances, the US and the UK were able to double their income on the same expenditure of energy. This technological advance is to the benefit of everyone including the environment.
Regards to all,
w.
PS—The source links below each chart goes to the corresponding live chart on the Gapminder website, where you can play with the variables or investigate the histories of countries other than the ones at which I looked.
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It would be better to reverse your x and y to show that the efficient use of energy produces wealth. Thus, restricting it’s use should be expected to produce poverty. Just compare food productivity methods as a function of efficient energy use per person.
That is way cool. Thanks Willis.
Of course you do realize that you have confirmed what some of us were saying in your post about oil production. Price spikes in oil produce recessions.
Here you say, correctly “You can’t get out of poverty without having access to affordable energy” But that means the opposite is also true “You will go into poverty with unaffordable energy.”
Hence once oil prices spike, due to depletion, we will return to poverty. Countries like the US and the EU will trek to the top left.
On the US and UK “getting it right”: I think these graphs probably take the total income and divide it by the population, assuming some sort of normal distribution of income. What has actually happened in the US and UK is that more money has been made in total, but actual individual income for the majority of the population has actually decreased in real terms. Income has shifted, and almost all new income has gone to a very small number of people and to large corporations, which are no longer required to re-distribute their income amongst shareholders.
The production required to create the increased income has come partly from lower energy industries, but also from moving production overseas, so increasing the energy use in those countries while reducing it for the US and UK.
I believe that a closer look at these countries would reveal that the real income/living standard for the majority of their populations has significantly decreased, and that once the energy use shifted overseas is re-apportioned the performance of the US and UK would look decidedly worse, while the reduced (re-assigned) energy use of some other countries would make their performance on these graphs look considerably better.
While I disagree that the US and UK “have got it right”, I do agree with the core hypothesis that income (a proxy for “living standards”) is directly related to energy use, and that we should be looking at cheaper methods of energy production rather than more expensive methods which produce less.
Just a side note that the EPA in the US recently tried to tie dust production in the fly over area of the US to pollution and were going to fine (read as administrative tax) on agriculture. (read food production) This it seems would help to reduce the carbon use of agriculture. It would but how much would it cause death and starvation world wide. Especially if this were promoted in the grain growing countries of the world. I agree that there are good things coming from the green movement, but there should always be a cost evaluation before implementation. Investigate the ethanol production targets and actual production and what it is doing to the energy production and cost in the United States.
there I go just thinking again,
Bill Derryberry
Philip Peake: Maybe the right parameter should be median income rather than average?
Thanks again Willis!!!!
I’ve been waiting for someone to use Gapminder (5 yrs ago I would have been able to but my mind is failing me) to show that the quality of life for the vast majority of the worlds population is improving at a very significant rate, mostly due to the availability of relatively cheap energy. Your conclusions are right on target!
Hopefully Rosling and students will update their database to the present so we can continue to follow the (mostly) improving world condition and refute the cries of the doomsters.
BC
I think here in the UK we have become a lot more energy aware. Our houses are more energy efficient as are the products and services we buy. Not for some altruistic reason (though that may have a small part to play) but mainly because we wanted the best return for our money. Many folk just don’t get the idea that progress is built on such thinking and that aesthetics plays a part in it as well. In fact one could argue that it is in developed capatalist states where one sees the best environmental care not in left wing or theocratic dictatorships. Indeed I would love to see an example of a socialist state that is doing more for both the environment and its people than a comparable capatalist one.
Somethings should be painfully obvious to anyone who has ever lived outside academia, the state capital or the Washington beltway.
_If you want less of something, tax it more.
_Free markets create wealth.
_Redistribution destroys wealth.
~More Soylent Green!
jrwakefield says:
December 19, 2011 at 6:50 am
“Here you say, correctly “You can’t get out of poverty without having access to affordable energy” But that means the opposite is also true “You will go into poverty with unaffordable energy.”
Hence once oil prices spike, due to depletion, we will return to poverty. Countries like the US and the EU will trek to the top left.”
The price of coal is practically constant over the past two decades. Yes, rising oil costs will affect transportation, but not necessarily energy production .
“The US and the UK have done a curious thing. Per capita energy use for each country in 2007 was about the same as in 1979. But income went up. Both countries nearly doubled their per capita income, with basically no increase in per capita energy use. Not sure what they are doing right, but we should figure it out and clone it …”
Yes, as a couple of commenters have said, “moving” production offshore uses less energy per wealth produced, but there are other reasons as well.
Checking on http://www.shadowstats.com, I find that, since 1980, the CPI has grossly understated price increases, which causes a grossly overstated GDP. How much? By my reckoning (eyeballing the graphs), the CPI as reported (which already shows a great loss of purchasing power), if calculated the way they used to do it in 1980 is 2 1/2 times larger than as reported. So, $250 today really is worth only $100 of 1980 purchasing power, meaning that US GDP really is worth not $15 Trillion, but only $6 Trillion! (Is that why Archie Bunker used to say that the US had the Grossest National Product?)
Assuming other countries’ governments also are less than truthful with their numbers, the whole distribution would be shifted somewhat more steeply to the left.
P.S. Love your work, Willis. Keep it up.
P. Solar says:
December 19, 2011 at 4:04 am
Enough with the socialist nonsense already.
Moving to the right wtihout moving up is due to innovation. Innovation percolates downward through layers of poverty to improve the lives of most people.
Perhaps this is a little over the top, but it makes the point clearly: Just remember the image of well-fed Palestinians, many wearing glasses, jumping for joy in front of a minivan parked on a paved streed in front of a pharmacy in a city with piped clean water and supplied with electricity, waving plastic flags to celebrate the demise of the World Trade Center Sept 11, 2001. The point is, without technology developed by the filthy rich West, they would be (and based on their actions, arguably should be) herding goats.
“A rising tide lifts all boats.” – President John F. Kennedy
“America is the only place where people drive to the poor house in their car.” – Will Rogers
Your computer and the internet are examples of technology percolating downward. You have the power under your fingers only the largest corporations had 40 years ago.
How many people living in “poverty” in the West have electricity, indoor plumbing, refrigeration, television, a car, and access to life-saving medical care? (Aside: you don’t need medical insurance to be treated in a true emergency – by law doctors are are required to treat to save your life.) The goal should be to share basic technology with the poorest people in order to lift them out of poverty. Technology cannot be developed without a concentration of capital and without a high level of education. Poor nations are caught in a Catch 22 of poor education and poor resources. Education is the critical factor allowing innovation by developed nations, and allowing development by under-developed nations. Breaking the West and taking it down (redistribution of wealth) out of some twisted notion of “fairness” will not actually help anyone.
On the other hand, taking the twisted green logic further, if people are bad and nature is good, it makes sense to create conditions where as many people die as possible (to save the planet?!!). That sort of thinking is truly sick, and serves as a dark portion of the foundation of green policy. It’s not the believers in green approaches who are deranged; they are idealists and miguided. Instead, it is the formulators of that policy who are dangerous and must be removed from power, hopefully through the ballot box. Unfortunately, there is an allure to socialist ideology. It usually takes a minimum of two generations to break the spell and kick the parasites out after they gain power. The lessons are learned only after great suffering (socialism fails every time is tried – as western Europe is learning). Eastern Europeans formerly behind the Iron Curtain already know better.
Keep an eye on China. There is a disturbance in the force down south. Is socailism cracking over there? Could this be the beginning of the fall of the regime?
http://www.ft.com/intl/cms/s/0/60be1f9e-296c-11e1-a066-00144feabdc0.html#axzz1gx7ySTSn
Willis, how about a graph of CO2 production for the worlds climate elite? Hansen, Gore, Mann, Pachauri as compared to the average citizen of the world?
Are the climate elite truly doing as they say and producing zero carbon? If carbon is such a problem, have they shown leadership and reduced their carbon pollution to zero?
Hoser says:
December 19, 2011 at 7:30 am
There are plenty of things happening in China that most people don’t know about, and the NY Times doesn’t want us to know.
As you say, the cracks are showing. The secret police have increased in size, dissidents are regularly harassed and jailed, the housing market is under strain and their are regular riots taking place.
However, the Chinese military is expanding.
@willis
Try making the scales on those charts to linear instead of log. At the higher income range, say $35,000/capita, energy use per person varies by a factor of four.
How is it possible that where annual income per capita is constant at $35,000 the energy use (or production, same story) per person varies from 3 to 12 tons of oil per year?
Essentially those charts you produced confirm the alarmist notion that rich nations can vastly cut their energy consumption and not harm their economy. At least that’s what the data says if you do more than look at the pretty colors and actually read the scale values on the side.
Oops. Thanks for nothing, pal. This is meat for the opposition. This is also why amatuers shouldn’t do original research for science blogs – their ignorance trips them up somewhere almost every time.
“Both countries [UK and US] nearly doubled their per capita income, with basically no increase in per capita energy use.”
Both countries were/are living beyond their means based on an inflationary house price bubble. Both are heavily into financial services to replace lost manufacturing capacity. This is not a route “to prosperity” other nations should emulate. Both countries are heavily indebted both at the government and private level. NOT a success story IMHO.
@BarryW: That would be a good start, but then you need to normalize over the time range — a $ in 2011 is not what a $ was worth in 1970 for example. This is important if we are using income as a proxy for standard of living, because if at some point in the past real income was double what it is now (I now have twice as many $, but can only buy the same food, and housing), but we have doubled out energy use, then we have really made negative progress
Then there is the question of energy consumption – Willis touches on this when he mentions that India uses coal — I think these graphs are just oil. Also need to (somehow) compensate for displaced energy use (burning oil/coal in India for goods and services delivered in the US).
I don’t want to distract from the central theme of what Willis is saying, I think its correct, energy is needed to improve income/standard of living, but where I do have a problem is calling out the US and UK as being models of “good” progress. I believe that a closer examination would show that they decidedly are not. Especially wrt improving the lot of their inhabitants.
“Some countries took the worst quadrant, down and to the left. This is where you are using less energy, and you’re also making less money. Zimbabwe and the “Democratic” Republic of Congo did that. Bad sign. It’s de-development, and it generally involves suffering for both humans and the environment.”
yet is is percisely what John Holdren wants. “de-development presents our economists with a major challenge. They must design a stable, low-consumption economy in which there is a much more equitable distribution of wealth … Redistribution of wealth both within and among nations is absolutely essential”” John Holdren, Obama’s Science Czar – Human Ecology: Problems and Solutions (1973)
Hoser, good post. Efficiency and energy is desirable. There is no energy bubble.
Willis can rate of population growth be added to such charts. Developed first world nations do not have population explosions.
Apparently the EPA wants to decide what is Sustainable and what isn’t. I can hardly wait for that! 🙁
=======================================================
” EXCLUSIVE: EPA Ponders Expanded Regulatory Power In Name of ‘Sustainable Development’
Read more: http://www.foxnews.com/politics/2011/12/19/epa-ponders-expanded-regulatory-power-in-name-sustainable-development/?test=latestnews#ixzz1gzuT6GQY “
@willis
This might be a nitpick but the labels about income are all messed up. What is shown is GDP per capita but the label, which I assume you made up yourself, reads:
Income Per Person (GDP/capita, PPP$ inflation-adjusted)
The values plotted are GDP/capita which IS NOT the same thing as income per person. If it were income per person then the US, for instance, is shown as having over $40,000 income per person. That would mean that the average family of four has a household income somewhere north of $160,000. In fact it’s less than half that because gross domestic product is not the same as income per person.
This is what happens when pikers wander into areas of knowledge where they are grossly (pun intended) deficient and start yammering on like they know what they are talking about. I’m no expert in economics but I at least know the difference between income and GDP and recognized right away that the charts were displaying GDP/capita not income per capita. If I can spot flaws like that God only knows how laughable this must be to an actual economics expert.
I have said this several times here and elsewhere . . .
Electrify rural Africa and you will stop deforestation in it’s tracks. At the same time people’s lives will improve immeasurably. Children will be able to do homework after the sun goes down, women will not have to waste hours every day collecting firewood, people will not have to rely on a hand pump for water, Threshing and grinding can be done at home if necessary, cell phone with internet coverage will be ubiquitous.
Everything in life that is not religious depends on energy. The more affordable energy the more prosperous the population and the better their environment.
Foreign aid and charitable contributions at present could pay for this both in capital terms and the initial operation level. Electrification is prosperity.
>>>Beesaman says: December 19, 2011 at 7:19 am
>>>I think here in the UK we have become a lot more energy
>>>aware. Our houses are more energy efficient as are the
>>>products and services we buy.
.
And I think that the UK is using less energy because it has lost all its means of production. Nearly all of our shipyards, car facories, train factories, smelters, rolling mills, potteries, white-goods manufacturers, shoe and clothing factories – all gone – and our last aliminuim smelter last month.
Manchester used to be called Cottonopoplis, but now has not one cotton factory. Stafford was ‘The Potteries’, but now only has one ceramics factory. Birmingham was the Tin Basher, but is now deathly quiet. The Tyne made more ships than anyone else in the world, but is subsidised by government made-work pen-pushing projects. Leicester made the world’s shoes, but now processes unemployment claims. Coventry made the entire world mobile, with cars and bikes, but is now famed only for its ghettos.
Less energy usage is not a sign of national advancement or health, it is a sign of demise and decay.
.
I think poster P.Solar is missing the point. One of the hidden parts of the bubble plots is the notion of infrastructure. In a stable society such as the US roads are already paved, wiring is already where it needs to be, and so on. Once the basics are in place you’re not spending as much percentage of the energy building energy distribution. It should not be surprising that coups and corruption and otherwise poor political conditions either fail to address infrastructure *or* there’s no longer term planning due to a lack of stability. Politics (and ramifications thereof) plays a larger role than is being acknowledged here. This would be a contributing factor to the US moving rightward on the graph. You could argue that upward and leftward movement is almost a requirement to get infrastructure in place (cf. china and india) and once this is accomplished the movement will track up->right almost by definition.
Another “hidden” part of this is bang for the buck in terms we have yet to discuss. Despite the US not moving downward and right, this will happen, and what we can do with the units of energy are interesting. Compared to 1971 even the poorest citizens have access to volumes of information that would have required thousands of acres of libraries (and the heating bills, etc.) Diseases that would have been a death sentence in 1971 are survivble now (e.g. various cancers.) In other words, we are getting far more “work” from the same number of units of energy than we were getting in 1971.
These are two OBVIOUS items that stood out upon first cursory view of the charts. My conclusion is that P.Solar seems to be agenda driven and is incapable of much contribution here.
I looked up the numbers in US census report. Mean income per person 25 years or older is $43,000. This is about the number plotted on the charts near as I can tell. I’m not at all sure what is actually being plotted. If it’s income per adult over the age of 25 that is going to badly skew comparisons between nations.
I tried clickong on the “Source” url below the graph but GapMinder is broken using FireFox 8, Win7, and latest Flash player. The data is only as trustworthy as GapMinder’s source.
Nevertheless here is the source description by gapminder which I was able to locate. It’s basically a hodgepodge with some undefined amount of pencil whipping by GapMinder. Not exactly confidence inspiring.
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P. Solar says:
December 19, 2011 at 4:08 am
Here’s another inexorable conclusion for you. People with more money have bigger cars.
This clearly proves that you can’t get out of poverty without having a big car.
Inexorable !
_______________________________
Fine P. Solar, How about you living in the equivalent of the 1700’s. No Factories, No heating, No plumbing (no electric for water pumps) No refrigeration, not even FACTORY MADE farm equipment, because unless you are advocating thorium nuclear THAT is what you are talking about.
The amount of energy per capita is not the amount someone uses for his gas hog but is the amount the ENTIRE COUNTRY USES! This includes mining and smelting ores, and the factories that built the commuter rails and trains you use to commute into the city built of cement and high temp FIRED BRICK and STEEL BEAMS.
From Comment on: http://blogs.dailymail.com/donsurber/archives/45086
“If you want to talk risk/reward fine. The cost to reduce CO2 output by 80% has been calculated, and that’s the low end of numbers estimated to “remove” mankind’s footprint of warming.” The commenter cites Modelling a UK 80% Greenhouse Gas Emissions Reduction by 2050: http://www.newscientist.com/data/doc/article/mg20427373.400/ce_new_scientist_report.pdf
So he did not pull the reduction by 80% out of his hat. That is what these people are advocating.
So Let us look at what real facts tell us.
The average for the USA is 335.9 million BTUs per person. http://www.nuicc.info/?page_id=1467
(Total population: 246,081,000)
The U.S. in 1800 had a per-capita energy consumption of about 90 million Btu. http://www.bu.edu/pardee/files/2010/11/12-PP-Nov2010.pdf
(Total population: 5,308,483)
If the USA reduces its energy consumption by 80% it equals 45.18 million Btu. per person IF THE POPULATION WAS THE SAME.
For the USA to use HALF the energy per person that was used in 1800 we must abandon ALL factories and 90% of the population must return to subsistence farming using animals. (If the Warmistas will allow oxen and horses and the methane/CO2 they produce)
Remember in 1800 there was only 2% of the current population in the USA. Solar and Wind just are not going to produce enough power to keep us in anything but a few lights and if we are lucky a refrigerator per town for medicines. FACTORIES use a huge amount of power and that is why cotton mills and other primitive factories were built on rivers. (Again use of hydro is frowned upon by the econuts and has been legislated against in “Wild and Scenic River” laws)
Anyone who tries to tell you differently is talking baffle gab because at present less than 9% of the US labor force is in manufacturing. The USA got rid of most of its really energy intense industry like smelting the ores to make machines.
In 1970 the USA had 24% of the work force in manufacturing and that included high energy manufacturing in the “Rust Belt”
The long version of the analysis is here: http://blogs.dailymail.com/donsurber/archives/45086/comment-page-1#comment-380871
FYI
Energy use per person comes from “The World Bank”. Now there’s a source of information everyone really trusts. Banks. /sarc
Are you KIDDING me?
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