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Hugh Hewitt Book Club

Dr. Matthew Spalding of the Kirby Center’s Hillsdale Dialogue on Immigration and Tax Reform

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HH: That music means it is the last radio hour of the week. That means it’s time for the Hillsdale Dialogue, our weekly journey into the highest issues and the most important things in the West done with someone from Hillsdale College, www.hillsdale.edu for all things Hillsdale. Usually, Dr. Larry Arnn, the president of Hillsdale College joins me. Sometimes, one of his colleagues on the faculty in Michigan, and sometimes Dr. Matthew Spalding, head of the Kirby Center in Washington, D.C, and that is one of those weeks this week. Dr. Spalding is back from the Kirby Center. All things Hillsdale at www.hillsdale.edu, and all of my previous dialogues are collected at www.hughforhillsdale.com. Matt Spalding, good morning and a happy Friday to you, November the 3rd.

MS: Good morning, Hugh. Good morning to you. Good day.

HH: We have a lot to cover…

MS: A lot to do this week.

HH: And I want to begin by saying, oh my gosh, but yesterday, I sat down, and I’ll show it on MSNBC tomorrow morning at 8am with the Majority Leader of the United States Senate, Mitch McConnell. And we talked about whether or not comprehensive immigration reform compromise was out there. And people can watch that tomorrow and see it. You were around for welfare reform in the 80s. You were also around for the Reagan immigration bill. At the time the Reagan immigration bill happened, what consequence did you attach to it? What significance did you believe it portended?

MS: Well, I mean, look, this is, what Reagan looks back and see this as the greatest mistake of his presidency. At the time, it was seen as a good, fair deal. Both sides got something, and it was going to work out fine. The problem is that, and this is the key lesson I fear, people have not remembered, not learned or forgotten is that Reagan’s side of the deal, right, he got some changes in immigration, he, the left got a number of changes what they wanted. But what Reagan settled for, which was the mistake, is rather than getting structural changes in the immigration policies, he got promises of future spending, essentially, and future action on the border. And lo and behold, it never took place. And what I fear is that there is talk of a deal here, and I think recent events in New York, and the President’s comments really point towards that. What I fear is that it’s not going to be a deal having to do with changing the structure of how immigration works. I think the other side wants to desperately not get into that spot. And how well the Republicans push that, or get into a position to do so, I, it’s not clear to me right now. But all the cards are on the table. All the pieces are there for a classic, and I think actually quite good deal that both sides should be very happy with.

HH: Last night, the President spoke with Laura Ingraham on the Fox News network about immigration. Here’s what that exchange consisted of, cut number 5:

DT: All of those things are happening. Chain migration…

LI: And is that going to be part of any DACA deal?

DT: Yeah.

LI: So if the Democrats want DREAMer help, they’re going to have to do…

DT: Yeah, we’re going…

LI: They’re going to have to E-Verify, chain migration?

DT: Sure. Sure, chain migration is one of the most important things. And most people frankly…

LI: Is that a requirement for you?

DT: Until yesterday, most people never hear of chain migration. I gave a form of a press conference, and I started talking about chain migration. And this horrible animal, he’s an animal as far as I’m concerned, 23 people have touched him maybe came in because he was, and he was only in with a green card, supposedly. But chain migration, where his whole family comes in, his mother can come in, his father, his grandmother, everybody comes in. Chain migration is a disaster for this country, and it’s going to end. Now I’ve been talking about it for a while, but I think the public, until yesterday, probably never heard about chain migration.

LI: Well, the Republicans didn’t want to touch it for a long time. You’ve held up a mirror to what the Republicans weren’t going to do.

DT: Well, they’re touching it now. No, they’re touching it now. It’s become a very, very strong point right now.

LI: Will it be part of a DREAMer deal, a DACA deal?

DT: Yes, it’ll be part of a DACA deal. DACA is a lot different than DREAMer.

LI: I mean, for the Deferred Action for Childhood Arrivals…

DT: Yeah, yeah.

LI: Will you require that if any amnesty talks will require chain migration to end?

DT: I don’t think any Republican would vote for anything having to do with leaving chain migration. Chain migration is a disaster for this country, and it’s horrible. I mean, just take a look at him. 23 people, potentially 23 people…

LI: Is that verified?

DT: It’s what I heard. It’s what I gave. Whether it’s 23 or whether it’s 2, as far as I’m concerned…

LI: That’s a big difference, though, 2 versus 23.

DT: It’s too much. Okay, no, no, I know that, but I hear it’s 23. It’s a lot of people.

HH: So Matt Spalding, your reaction on many levels to what the President said there?

MS: Well, all the pieces were in there. There are a number of things, I think, were very significant. If you back up and remember back when Senator Cotton and Mr. Perdue introduced their legislation, they put a lot of these things on the table. The President allowed DACA to expire, or at least did not extend it, which he said, which he actually meant he threw it back into Congress’ hands. You had this event in New York, which has to do with the diversity lottery. The terrorist came into the country through the diversity lottery. And the President has raised, here in particular, but at many times, this question of chain migration. This is a once you get in, not only can you bring in your immediate relatives, but extended relatives as well. And this goes on and on and on ad nauseam. The overall larger political point here is that we have lost control of our immigration system. We can debate the details, and I think he’s got some very good details he’s raising here. But we are not in control of the policies by which individuals come into the United States and have freedom of movement and the ability to stay.

HH: And so I think that that would summarize…

MS: And that would be before you get to the question of who comes her legally or not. We’ve just lost that control. We as a country do not have that within our grasp, which means you’re open to terrorism and all sorts of other activity that we as a country clearly do not want happening regularly on our ground.

HH: So a visa lottery, if you win the visa lottery, and they say oh, we don’t have enough Uzbeks, so we’re going to get 100 Uzbeks, you’re not actually bringing in 100 Uzbeks. You’re bringing in 100 Uzbeks plus every other Uzbek who is related to them by a degree of one. And then once those Uzbeks get here, they get to bring in everyone who…

MS: They do the same thing. That’s right. That’s right.

HH: Yeah, it’s really kind of insane.

MS: And, but in this case, it starts with literally a random selection. You’ve identified countries where we have, there are low numbers of immigration, which is a perfectly reasonable thing to take into consideration. But then you randomly pick individuals in that category, and essentially give them what they actually call it, a golden ticket. And once they have that golden ticket, it spins out after that. So the idea of having some sort of policy by which we can rationally, at least, have some parameters over immigration, who, what, when, why, where, has largely been lost. And the diversity lottery is really, though not as large as some of these other questions, in combination with other pieces, but is a perfect example of that. I mean, it’s a random choice as to who gets to come here in a world of terrorism and concerns about the effect of immigration on economics and other policy issues, is totally absurd. And from the broader perspective of, say, the American Constitutional tradition, makes absolutely no sense at all from the idea that somehow those who come here and become Americans and citizens. We should be open to that, and we should be open and welcoming from an immigration point of view. But we should always be concerned about who comes here for what reasons, and to make sure they’re coming here for the right reasons. And doing it randomly is just absurd.

HH: I want to underscore something. It is insane in an era of terror to award any visa ever randomly. It’s insane in the age of terror. It doesn’t make a lick of sense.

MS: And that the President jumped on this, first of all, he’s raised it before. This is nothing new. But that he honed in on this is, I think, correct from a policy point, but also politically a great move to maneuver to this, because for the average person, it is obviously absurd. And the fact that this person came in through the diversity lottery randomly, but also, there have been previous, numerous previous cases, including one back in 2002, where this the individual out in Los Angeles who ended up killing two people. He had tried to come in, and was denied admittance because he was thought to be connected to a terrorist group. Yet his wife then later got in, got the golden ticket. Through the random lottery, she was chosen to come, and he changed his application. He came into the United States, and five years later, killed two people at LAX.

HH: Yeah.

MS: That’s absurd. That’s crazy.

HH: Yeah, it is crazy. I’ll be right back, America. My guest is Dr. Matthew Spalding. He is head of the Hillsdale College Kirby Center, existing as a lantern in the shadow of the Capitol of truth, freedom and Constitutionalism. When we come back, we’ll continue to discuss about what the President wants to do on immigration, and then turn to the tax bill. Matt Spalding was deeply involved in the last major legislative success of the Republicans, welfare reform. The last major legislative success was in the mid-90s when Bill Clinton was president. It was the welfare reform bill jammed down President Clinton’s throat. And not since the mid-90s has there been a major overhaul of any piece of legislation. Obamacare was a defeat for sweet reason, but now the Republicans are back with a comprehensive tax reform bill. We’ll talk with Matt Spalding about how one gets that passed, and whether or not this one will pass as well as a couple more thoughts on immigration when we return to the Hugh Hewitt Show. Stay tuned.

— — – —

HH: Dr. Spalding, I want to read to you a tweet storm over the last hour from the President. It begins, and I’ll just read it without breaking, “Everybody is asking why the Justice Department and FBI isn’t looking into all of the dishonesty going on with Crooked Hillary and the Dems. Now, Donna Brazille’s book says she paid and stole the Democratic primary. What about the deleted emails? Uranium? Podesta? The server? Plus, people are angry. At some point, the Justice Department and the FBI must do what is right and proper. The American public deserves it. The real story on collusion is that Donna B.’s new book, Crooked Hillary bought the DNC and then stole the Democratic primary from Crazy Bernie. Pocahontas just stated that the Democrats, led by the legendary Crooked Hillary Clinton, rigged the primaries. Let’s go, FBI and Justice Department. ISIS just claimed the degenerate animal who killed and so badly wounded the wonderful people on the West Side was ‘their soldier’. Based on that, the military has hit ISIS much harder over the last two days. They will pay a big price for every attack on us.” That is a tweet storm like few tweet storms, Matthew Spalding. Your reaction?

MS: That’s quite a storm.

HH: Yeah.

MS: That’s quite a storm. Well, I mean, look, the tweets from the President is how he is communicating directly out to the American people. And it’s a stream of consciousness, but you know, he gets on a roll, and he starts pointing things out. My reaction to it, to a lot of these things, let it play. It’s playing out. He’s adding commentary. He’s pushing this along. We are seeing he’s putting a wedge into the Democratic Party, right? If you, you want to unite your people and divide your enemies. And he is just putting that wedge there, but the wedge is becoming apparent of its own. This is quite amazing what’s coming out of all this that turn in this whole debate about collusion. I think he’s pushing that along. He’s also using this, and we go back to the immigration question, how this is playing out and the connection between what happened in New York because of the diversity lottery, the discussions going on Capitol Hill that are going to be setting up an immigration deal, I think this is an occasion, and of late where you see there’s a connection between his tweets, which some see as the just random musings that occur at 2am, but in actuality, there’s some thought behind it. I think there’s a certain strategy here, at least a line of reasoning you see in these tweets.

HH: Yeah, and it’s not 2am. Right now, he’s taking over Morning Joe. Morning Joe is putting up his tweets. I just read his tweets. He takes over every morning news broadcast.

MS: And it’s dominating. That’s right.

HH: He captures them. It’s a hostile takeover of my show. I don’t much mind it. It’s great radio. People want to hear them. But I’ve got to read them, and Morning Joe’s got to cover them. Fox and Friends has got to cover them.

MS: That’s exactly right. No, it’s powerful. And all of that, in a way, I think now that is supporting his, he’s maneuvering it to support his agenda. There is a, you know, he is using, this is an example of the way in which he is actually prudent, to use the word. He’s using this modern technology, which seems, everyone says is so un-presidential, he’s using this modern technology to actually communicate in a way that contributes towards the direction he wants to see policy go, communicating to Congress and the American people.

HH: Yeah, it is, it’s interesting to me, Matt Spalding. When we come back, we have a long conversation about the tax bill that’s come out and how you negotiate that through there. But the President is, remember how Reagan did one story a day and changed the way a presidency…

MS: Yeah, yeah, that was always, right…

HH: This is a different one story a day. This is 15,000 stories a day, but it’s all focused on Donna Brazille’s book.

MS: That’s right. That’s right. And the old argument was you had to stay focused. You couldn’t have multiple messages coming out. But that’s not true anymore.

HH: No.

MS: I mean, the point now is you’ve got to stay ahead of the message. You’ve got to do it so rapidly and so rapid-fire that they can’t keep up with you.

HH: Yeah.

MS: And he seems to have figured that out.

HH: It’s, you constantly lay down fire. You constantly lay down tweet fire and it works. I’ll be right back. Dr. Matthew Spalding runs the Kirby Center, Hillsdale College’s lighthouse of reason inside the Beltway. It burns bright every single day, and Matthew will be back with me as we talk about the Kevin Brady-unveiled tax reform when we come back after the break – who wins, who loses, does it stand a chance, does it have a prayer of passing, and I’ll talk about it tomorrow morning with Mitch McConnell as well at 8am on MSNBC. Do not miss my conversation with the Leader on Saturday morning on MSNBC. Stay tuned.

— – – – —

HH: Mat Spalding, you did welfare reform in the 80s. Now, Kevin Brady and Paul Ryan want to push through tax reform. What do you make of the bill as unveiled and its prospects going forward?

MS: Well, even before I talk about the details of the bill, I want to make one point which you were alluding to about welfare reform and reform generally. And in the earlier segment, you made a reference to reform, but also kind of a comprehensive bill. And there’s something interesting in those approaches which we should play out for just a second. The way the left likes to do things, and I don’t mean just the Obama administration, but the kind of modern progressive liberalism, is it must be comprehensive, which is to say evenly done by experts across the board, very technical, comprehensive everywhere. The alternative approach, which I think we’re seeing here come out, and is the better way to do things generally, is what we broadly call reform, which isn’t necessarily meaning it’s a bunch of experts that do it, but it kind of goes through the give and take of politics, but also compromise to come out with something that’s supported, but also accomplishes a larger, a larger objective. It’s interesting, I was thinking on break, I like to think while we’re on break, Hugh, but isn’t it interesting that the parallels right now that we’re thinking about both go back to the same year – 1986, in the Reagan administration when there was an immigration reform, which made some mistakes and there’s a big lesson to be learned there by the Trump administration, and a tax reform package in 1986, which was actually a great success, and there are actually great lessons to be learned there as well. That’s fascinating, because the Reagan administration’s strategy was political reform. Advance the policy, advance wherever policy, like water going into cracks, but be willing to deal with the realities of how do we actually get this through legislatively. In the immigration reform of ’86, we learned that, the lesson that we learned that was a mistake is that the deal has to be structural. It has to have actual things in it. And it has to have some limits. One of the things that you, in that interview with President Trump, it was passed over here but I caught, was the President was insisting this is a deal about DACA, not the DREAM Act. I don’t know if you caught that.

HH: I did.

MS: That’s very important. It’s a very important difference, because DACA under President Obama had some limits to it. It was controllable. It was definable. DACA is unlimited. So the pieces and how it comes together, they seem to be picking up on those lessons. My point here, long answer to your question, is I think, I see signs in this that the workings of big tax reform going back to ’86 have been learned. The answer, I think, is not actually in, these are good details, especially on the corporate side. There’s been some angling around that some of the other things are not exactly what everyone wanted, how is this going to work out, it’s, you know, it’s not clean, it has more deductions. But the dealing to get there, Kevin Brady, how that’s played out, it’s more rapid than it was in ’86 in terms of how fast this is being put together. But it seems to be that’s the kind of process we’re looking at, which at a certain point gets a certain inevitability about it. There will be some more give and take that comes through. Hopefully, they’ll pull in a few Democrats. I think they’re going to need to. But I’m actually much more, I’m more positive today than I was last week.

HH: So am I, and it’s because they made some smart choices to leave the 401Ks alone. The only thing…

MS: They avoided the landmines.

HH: Yeah, it mystifies me what they did to the home mortgage interest deduction. And Matt Spalding, you and I have been around. We know incentives matter, right? The realtors are going to go crazy, because if you take away the home mortgage interest deduction for new home purchases over $500,000, you’ve taken away an incentive to buy homes in coastal California, in Chicago, in New York, in Philadelphia and Washington, D.C.

MS: Right.

HH: And you’ve turned every realtor in the country against you, because the home market is actually one market. I don’t, I really do not understand what they think they did here.

MS: No, I think they were probably thinking they were coming up with a reasonable trade-off by making that $500,000 amount. I think they might not be used to property values. I know here in Northern Virginia, that’s probably not enough when you’re buying a newly-purchased home. But they also left, you know, everything else intact so you’re, people who are currently deducting wouldn’t do that as well. It changes the incentive of it…

HH: Matt, let’s pause on that for a second.

MS: But you know, how does this work out in terms of changing other deductions, changing the rates? That’s the question.

HH: And in the housing market of California, there are numerous distortions, because Prop. 13 provides that your property tax rate is capped.

MS: Right, right.

HH: And you can pass that house on once to a child.

MS: Right.

HH: And therefore, it has decreased the mobility of home ownership dramatically. People hang on to their houses. They don’t move, and then they leave it. That distorts the housing market. What’s going to happen now by grandfathering in all mortgage deductions up to a million dollars that existed prior to…

MS: They’ll hold onto those houses.

HH: You hold onto those houses.

MS: Right. That’s right. That’s right.

HH: It’s just like Economics 101. They just distorted the housing market. So I don’t think they have a single realtor in the room. They don’t have anyone from the home building industry in the room, and my gosh, are home builders going to come down on their head. Back in the day when Larry and I worked with the Claremont Institute with people in Southern California who were building homes…

MS: Yeah, yeah.

HH: They cannot believe what they’re reading this morning. And I have to think it comes, and riddle me this. I think the House is very insular, and not just the House, but more importantly, Congressional staff. I don’t think they get out much, Matt Spalding. And I read it in every one of their proposals. It reflects a ghastly insularity.

MS: No, I think that’s, there’s a lot of truth to that. But let me turn it around for a minute, because maybe this will be adjusted as we go. But one of the things in ’86, you’ll recall, that allowed this to break through is that they got something on the table. They had version, they got it out there, and they pushed through what was kind of just a narrow special interest conversation so that we could actually look and see how the pieces interacted, right? Getting to that point, I think, was the achievement of yesterday. What the final measure will be, what the particulars, this one and in particular, I don’t know. I think there are going to be some pushback and discussions, and at least, I don’t know if you saw Senator Manchin’s comments yesterday, but you know, he said no for now, but he’s clearly open to further discussion. I think we’re at the beginning of this process.

HH: Joe Donnelly and Joe Manchin have to vote for, yeah, Joe Manchin and Joe Donnelly have to vote for a tax bill, or they are doomed. It is that simple.

MS: Well, I think that’s right. But he clearly wants to hold out for something. He want to get some more changes in it. But then you come back to Murkowski and other people like that, right? I mean, there’s going to be some give and take here. I have no doubt of that. This is the beginning of a process, or early in a process.

HH: There is also a senator, Senator Tom Cotton has put on the table, and I asked Leader McConnell about this tomorrow, and people can watch on MSNBC at 8 to find the answer. That’s called a tease. Can we get Senator Cotton’s idea to get rid of the individual mandate back on the table? The President wants it, Kevin Brady said it complicated passage. I don’t know anyone in the Republican Party, you tell me who, would vote to retain the individual mandate when you can add $300-600 billion dollars of additional tax reduction by getting rid of it?

MS: Oh, no, I think that’s absolutely right. Of course, they would vote for it. But you’ll get pushback from that further, you know, where do you make up the income, how does this play out in the tax bill, right? I mean, I think they have a fine balance between where you do your cuts, you want good cuts, but then you know, you go back to someone like Corker, right? He’s just concerned with the deficit. This is increasing the deficit, everything we do here.

HH: But according to Cotton, when you get rid of the mandate, you save money. That’s, I don’t know why, but the CBO scores the elimination of the mandate as a deficit reduction of between $300-600 billion dollars. Don’t ask me why. It doesn’t make a lick of sense to me, but CBO never made a lick of sense to me, either.

MS: Well, then that should be a gimme. That should be a gimme.

HH: It should be a gimme. And the reason Kevin didn’t want it, Kevin Brady said that complicates it, because more people, some people like the mandate. And I said I don’t know any Republicans who like the mandate.

MS: Right.

HH: I mean, is there anyone?

MS: Well, what, yeah, but what it does, I think that from a tax perspective, I think you’re absolutely right. I think what he’s voicing there is that look, we took a shot at this in terms of health care reform. Putting that in there means we’ve got to come back and address that again, because we pull out that mandate and that tax. I think that’s a great thing. That’s exactly what they should do. That’s called legislating, and you come back and fix the other parts of it. But if we’ve got this piece we can put on the table and get something out of it, we should definitely do that.

HH: Now let’s talk about timing. To move on the Republican timeline, they have to move this through the manager’s amendment to the chairman’s amendment by the end of the week, through the House Rules Committee and through the House by two weeks from then, and then over to the Senate if they want it done by Thanksgiving. Is that possible, Matt Spalding?

MS: When was the last time the House of Representatives did something this big that fast? It’s hard to say. What I find fascinating about, so on the one hand, the House of Representatives, although I think they’ve been doing their job relative to the Senate as we talked about last week, you know, so they didn’t pass their individual appropriations bills. They did in the sense that they put them all together in one piece of legislation. They actually checked off their box about the budget. But they don’t really budget in a serious way, in the way you’re supposed to from a normal order, in terms of normal legislative order. This is of that magnitude. This is a very tight schedule. But we have an additional factor here, to put it in Madisonian terms, right? They have a very, very high interest in doing this in order to maintain their political position, meaning their own jobs, but also forward a large, overarching agenda.

HH: They need it. I’ll be right back with Matt Spalding to talk about why they need it so badly right after this.

— – — —

HH: At the end of the day, Matt, what matters the most to most Americans is that they be safe and that they get to keep their money. On the safety part, that goes to the migration decision we began with. And at the end of the day, it goes to the tax bill. So the Republicans are actually talking about Republican issues. Democrats must feel a little bit desperate.

MS: No, this is an amazing turn of events. I mean, think back. The, you know, Trump was coming in, this was going to destroy the Republican Party, it was going to divide and be a disaster. And the Democrats were going, were just looking forward to sitting back and waiting to take over power. And the tables, talk about the tables being completely turned, I think what we are seeing increasing division and breakup potentially of the Democratic Party, which is essentially between all these fissures. All these things are coming out. They’re driving wedges between the more progressive wing of the Democratic Party and a more pragmatic wing, if you will. And they’re infighting, and this will continue. And yet, here we have a situation where the table is set and this massive political opportunity, a massive in the sense that this has not been in a position for decades in which this president, supposedly an outlier when it comes to these questions, has placed directly on the plate of Congress, which is where they need to get their act together, on the plate of Congress, he’s thrown in their lap, he tried it with health care, and they didn’t do that. And now, they’ve got another shot at a double, a double, which can be a huge home run here, which is this possibility on immigration legislation and tax legislation, safety and your pocketbook. And if they get this right, which they could, but it’s not clear, but if they get this right, you’re talking about not only getting back to Republican questions, but taking this presidency and Congress now working together with a unified agenda, presenting that to the American people, the politics going into the election look different, and all of a sudden, a de-aligning president who breaks things up now is talking with his fellow Republicans about how to align things along lines that are remarkably similar and consistent with a more conservative view of things like immigration security and finances. Wow, what a difference.

HH: And what comes next, of course, is also a stimulus bill. He wants to spend more money, which is not consistent at all with what Republicans believe, but nevertheless, he did campaign on it. There are ways to pay for it.

MS: Right.

HH: There are approaches to do so. Do you think he goes there next if this tax bill passes, Matt Spalding?

MS: I think if, it’s highly likely given that that’s the one thing that he promised that has not yet been touched. But I think you’re right. There’s some creative ways to do it. Getting this done first will get you there a lot easier. I mean, the corporate side of this tax reform bill, especially if that kicks in immediately, remember we have, so the House bill, it takes over immediately. In the Senate, they’re talking about slowing this down, having it go into effect over time, which would be a huge mistake. But if that doesn’t happen and this kicks in, this is going to be a huge boost to the economy, which is already doing very well. So I think he’ll be a very strong position to do that. But having said that, if Congress and the executive have learned to work together in a creative way that gets things done, there are creative ways to do this that aren’t merely writing blank checks. And everything we’ve heard from President Trump seems to be that he didn’t want to write blank checks. He actually wants to do particular things.

HH: He wants to get a few things done, yeah.

MS: So let’s go. This guy wants to win things, and you’ve got a Congress that has a bunch of smart people who are creative. And now if they learn how to legislate again and realize they can actually use those muscles, you know, we’re rolling. This is how it’s supposed to work.

HH: More power to them.

MS: This is the separation of powers in action.

HH: Hopefully by next week, we will see the Ways and Means Committee pass this bill onto the House floor. Matthew Spalding of the Kirby Center from Hillsdale College, thank you. This is the Hillsdale Dialogue. All things Hillsdale available at www.hillsdale.edu.

End of interview.

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