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Response to High Food, Energy Prices Should Focus on Most Vulnerable

Countries should allow international prices to pass through to domestic prices while protecting households that are most in need.

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Countries should allow international prices to pass through to domestic prices while protecting households that are most in need.

Governments confront difficult policy choices as they try to shield their people from record food prices and soaring energy costs driven higher by the war in Ukraine.
 
Countries introduced a variety of policy measures in response to this unprecedented surge in prices of the most crucial commodities. Our survey of these announced measures by member nations shows that many governments tried to limit the rise in domestic prices as international prices increased, either by cutting taxes or providing direct price subsidies. But such support measures in turn create new pressures on budgets already strained by the pandemic. 
 
Limiting the price pass-through is not always the best approach. According to a new IMF note, policymakers should allow high global prices to pass through to the domestic economy while protecting vulnerable households affected by the increases. That’s ultimately less costly than keeping prices artificially low for all irrespective of their ability to pay.
 
Not all countries are able to follow the same path. Where subsidies exist, the pacing of price adjustments and the extent to which social safety nets are used will differ from country to country. That’s why our note offers nuanced policy advice for countries depending on individual country circumstances, such as the strength of the social safety net, the level of existing food and fuel subsidies, and the availability of fiscal space. 
 
Soaring prices 
 
Russia’s invasion of Ukraine followed last year’s steep gains in commodity markets, pushing food prices to a record and natural gas to historic highs. Prices for wheat, a staple in which Russia and Ukraine together account for about a quarter of global exports, are up 54 percent from a year earlier. With food and energy imports from these sources disrupted, countries face high costs and uncertainty about supplies. 
 
People in low-income countries are most vulnerable to higher prices because food accounts for 44 percent of consumption on average, compared with 28 percent in emerging market economies and 16 percent in advanced economies. Oil prices have also seen steep gains, which impose different burdens on consumers. Higher-income households tend to use more fuel than lower-income households, and they are bigger users of gasoline compared with poorer households, which in many developing countries tend to consume more kerosene. Government policies to mitigate the social impact of rising prices must take these differences into account and ensure that the burden is not disproportionately felt by the poor.
 
Policy responses
 
The pass-through of international fuel prices to domestic consumers has been lower in the first four months of this year than last year. Moreover, the pass-through has been highest in advanced economies and lowest in oil-exporting emerging and developing countries. Fuel subsidies prevalent in many oil-exporting countries in the Middle East, North Africa, and sub-Saharan Africa are a big part of the reason why consumers in those regions may be feeling less pain at the pump, albeit at the expense of mounting fiscal costs and thus, in many cases, future cuts in other public services.
 
More than half of the 134 countries we surveyed had announced at least one measure in response to higher energy and food prices. Emerging and developing economies announced fewer new policy measures, likely because they continue to rely on existing energy and food subsidies and limiting—or avoiding—adjustments in domestic prices. 
 
They might also have less fiscal room to react or more difficulty in quickly scaling up their social safety nets. In advanced economies, cash and semi-cash transfers (including vouchers and utility bill discounts) were announced by the greatest number of countries. In emerging and developing economies, reductions in  consumption taxes were the most frequently announced measures.
 
Social safety-net considerations 
 
Although most countries are limiting international price pass-throughs, this is not advisable. Price signals are crucial to letting demand and supply adjust and inducing a demand response, in which high prices encourage people to be more energy efficient. On the other hand, subsidized prices encourage more consumption, putting further pressures on energy prices. At the same time, countries should provide temporary and targeted transfers to most vulnerable households. 
 
A demand response can be sizable for energy, but much less so for food because people need to eat about the same amount. Still, countries should refrain from preventing domestic prices from adjusting because such measures, which result in subsidies, are not efficient in protecting the most vulnerable. They also are costly, crowd out more productive spending, and reduce producer and distributor incentives. We advise allowing price pass-through on food, provided that the vulnerable are protected and food security is not at risk.
 
We also stress that countries should consider the strength of social safety nets when setting policies:
  • Countries with strong social safety nets could use targeted, temporary cash transfers to lessen the impact on vulnerable people. These countries can provide targeted transfers relying on existing social programs.
  • Countries where safety nets are not strong enough to support the most vulnerable can expand their most efficient existing programs by increasing benefit levels and coverage as needed. Digital tools can be used, for instance, to register beneficiaries and deliver benefits.
  • Countries with existing energy or food subsidies should gradually pass international prices through to consumers while committing to eliminating subsidies in coming years. The pace of pass-through should be carefully calibrated based on the gap between retail and international prices, the available fiscal space, and the ability to implement measures to protect the vulnerable.
In countries where food security is a concern and all other options have been exhausted, governments can consider other temporary steps, such as price subsidies or import taxes with clear sunset clauses for basic food staples. Governments should also try to increase food supply by supporting production, avoiding stockpiling, and using food reserves when available. Where food security is at risk, direct distribution of staple foods may be necessary.
 
Over the next two to three years, governments should focus on investing in social safety nets and reforming existing subsidies. Such overhauls will help countries improve resilience and promote more productive spending to support inclusive growth.

 

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International

Pro-Hamas Groups Push Critical Race Theory, Socialism In US

Pro-Hamas Groups Push Critical Race Theory, Socialism In US

Authored by Brad Jones via The Epoch Times (emphasis ours),

A California woman…

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Pro-Hamas Groups Push Critical Race Theory, Socialism In US

Authored by Brad Jones via The Epoch Times (emphasis ours),

A California woman sobbed as she learned her friend’s 19-year-old son was kidnapped by the Hamas terrorist group in Israel.

Protesters wave Palestinian flags in support of Palestinians and socialism in Los Angeles, Calif., on Oct. 12, 2023. (John Fredricks/The Epoch Times)

The next day, on Oct. 12, as news of pro-Palestinian “Day of Resistance” rallies spread across the United States, the woman, who is of Jewish heritage and asked not to be named for fear of reprisal, broke the tragic news: Her friend’s son had been murdered by the terrorists.

The same evening, a group of activists in south Los Angeles staged a protest in solidarity with Palestinians. Two days later, demonstrators again rallied—this time thousands gathering near the Israeli Consulate, at one point shutting down the on- and off-ramps to Wilshire Boulevard from the 405 Freeway.

At the Thursday protest, activists equated the plight of Palestinians to those of “indigenous peoples.” They called the Israeli settlements in the Gaza Strip an “occupation” steeped in racism. They blamed the “capitalist” Jews and white Europeans for the loss of their “indigenous lands” and called for a socialist revolution.

All resistance to colonial occupation is justified!” shouted one speaker at the event.

Protesters chanted, “From Palestine to Mexico, border walls have got to go,” and “From the river to the sea, Palestine will be free,” among other slogans. They blamed Israeli Prime Minister Benjamin Netanyahu for children killed in retaliatory attacks on Palestine and condemned Zionism, equating it with South African apartheid, fascism, and Nazism.

Thousands of demonstrators waving Palestinian flags and signs denouncing “Israeli apartheid” march in Los Angeles on Oct. 14, 2023. (David Swanson/AFP via Getty Images)
Julia Wallace of Service Employees International Union speaks in support of Palestinians in Los Angeles on Oct. 12, 2023. (John Fredricks/The Epoch Times)

The protest, at Martin Luther King Boulevard and Figueroa Street, was organized by Unión del Barrio and the Association of La Raza Educators and other left-wing activist groups known for their support of critical race theory, or CRT, and the state-imposed ethnic studies program.

Julia Wallace of the Service Employees International Union (SEIU) spoke out against Zionism. She called for defunding police as “enforcers of capitalism,” saying they should be ousted from the labor union.

Another speaker called for a protest outside the south Los Angeles Police Department station on Oct. 22.

“Let’s take over the police station,” he told the crowd of about 30 supporters.

Meanwhile, an Oct. 16 Reuters/Ipsos poll shows most Americans see Hamas as a terrorist organization, while they view Israel favorably. An Oct. 13 Rasmussen poll found most U.S. voters blame Palestinians for the conflict and agree with calls for the “eradication” of Hamas.

On Oct. 15, thousands of people showing support for Israel rallied in Los Angeles, walking down Pico Boulevard to the Museum of Tolerance.

Demonstrators attend a rally in solidarity with Israel in Los Angeles on Oct. 10, 2023. (Ethan Swope/Getty Images)

Support for Israel

Ric Grenell, a Californian and former U.S. Ambassador to Germany who also served as Acting Director of National Intelligence in the Trump administration, condemned the recent attacks on Israeli civilians.

He stated on Twitter on Oct. 13, the Democratic Socialists of America and student groups that support Hamas “are a real threat to America.”

“Voting for Democrats who support Socialists like @DemSocialists and ‘Sanctuary Cities’ policies will absolutely lead to people entering our country freely who haven’t been vetted by U.S. immigration services. ... We must have laws that protect us against people entering the U.S. who support terrorists like Hamas.

Michael Shellenberger, an author and San-Francisco-based political activist who co-founded the California Peace Coalition and other groups, condemned the terrorist attacks on the Israeli people.

“We unreservedly condemn the atrocities carried out by Hamas and support the right of Israel to defend itself and protect its citizens,” he wrote. “The stories and images of the attack shock the conscience. Nothing on earth could justify such crimes. We condemn those on the radical left who have defended the actions of Hamas terrorists.

“We are pro-Israel, by which we mean we defend its right to exist and its right to defend itself,” he continued. “At the same time, we urge Israel and its supporters, including the United States, to, in their response, abide by international law in general and the Geneva Convention in particular. That means doing everything possible to avoid killing or injuring civilians in the Gaza Strip.”

Kelly Schenkoske, an independent researcher and education advocate, and a critic of critical race theory being taught in California classrooms, denounced the protests pushing critical ideologies.

“We’re seeing protests at college campuses nationwide in support of Palestine, but this issue does not just reside on our college campuses, it resides in the K-12 sector, especially within ethnic studies,” Ms. Schenkoske said.

A Palestinian flag is waved at a rally in support of Palestinians, in Los Angeles on Oct. 12, 2023. (John Fredricks/The Epoch Times)

The state-imposed ethnic studies curriculum in California is “filled with radical ideology,” she said.

“The same activists demanding safe schools promote antisemitic ethnic studies content aimed at decolonizing education [and] promoting critical consciousness and training in neo-Marxism. We need to defund antisemitism in schools entirely,” she said.

Deborah Fillman, a former teacher and education analyst based in North Carolina, told The Epoch Times that California schools are teaching “lies” as historical information through its ethnic studies programs.

They’re doing it under the guise of social justice, which is false. There’s no justice that can come from murder. There is no legitimate resistance that comes from the wanton slaughter of innocent civilians,” she said.

“From the river to the sea, Palestine will be free,” is a Hamas slogan that means “all the Jews have to go—the eradication of Israel,” said Ms. Fillman, who is Jewish.

The pro-Palestinian protestors aren’t calling for a two-state solution but are instead supporting Hamas when they chant those words, she said.

“It is literally a war crime—every single thing [Hamas] did—including using their own people as human shields,” Ms. Fillman said.

Colonizer Versus Oppressed

Tammi Rossman-Benjamin, a co-founder and director of the AMCHA Initiative, a non-profit organization that combats antisemitism, told The Epoch Times that proponents of ethnic studies have used the Israeli-Palestinian conflict “as a way to essentially beat up their political enemies.”

The pro-Palestinian protestors are using the tenets of critical race theory to frame the Israeli-Palestinian conflict in terms of the colonizer and the oppressed, she said.

 

“It’s the whole binary oppressed-oppressor [concept] at the heart of ethnic studies that they’ve expanded to talk about politics and international politics,” she said. “In this case, their political agenda aligns up with Hamas’s political agenda which is to destroy Israel.”

Hamas doesn’t talk about colonialism, she said.

“It talks about Holy War, it talks about jihad,” and it calls for the ethnic cleansing of Jews from what it considers Muslim lands, Ms. Rossman-Benjamin said.

The recent “beheading of babies, rape, kidnapping, and massacres” represent the worst and largest number of atrocities committed against Jews since the World War II Holocaust, she said.

For Jews, this is really unprecedented in two generations,” she said.

The AMCHA Initiative issued a statement saying it is “shocked and horrified at the gruesome massacre of over 900 Israelis—children, mothers, grandmothers, fathers, entire families—hundreds of them gunned downed at a music festival ... reports of rape and torture, and an estimated over 100 Israelis kidnapped, including children, the elderly, a Holocaust survivor, young women, teenagers, and families.”

The Jewish community in the U.S. is now bracing for more pro-Palestinian protestors across dozens of university campuses expressing support for “this genocidal campaign,” AMCHA stated.

The Harvard Undergraduate Palestine Solidarity Committee and more than 30 other student groups recently signed a statement arguing that Israel’s “apartheid regime” is entirely to blame for the attacks. However, following public backlash, at least five organizations that initially signed the letter withdrew their support.

“We will work hard to expose and combat on-campus supporters and apologists for terror, especially the faculty and departments who provide academic legitimacy for the murder of Jews while disingenuously wrapping themselves in the mantle of academic freedom,” AMCHA stated. “Our hearts are broken, but our resolve is not. We stand united with the Jewish people in Israel and around the world.”

 

At the University of California—Santa Cruz (UCSC), the Critical Race and Ethnic Studies (CRES) department, which studies “race intersectionality in the context of power,” put out a statement Oct. 11 in support of the Palestinian people.

“In this moment—when we are grieving lives lost, fearing the many more to come, and witnessing Israel once again retaliate against a trapped Palestinian population in Gaza—we want to underscore the need for study,” CRES stated. “What we are witnessing needs to be understood in the context of 75 years of settler colonial displacement, military occupation, and enclosure. As in the past, racialized media coverage dehumanizes Palestinians, delegitimizing their aspirations for freedom from militarism, colonial rule, and incarceration.”

The department claims the world is witnessing “the circulation of technologies that are weaponized against Palestinians first, and, subsequently, our most vulnerable populations in the United States, on our borders and globally,” and cites this as the reason why it supports “the critical study of Zionism.”

The university has received pushback from at least seven members of the faculty, including Ms. Rossman-Benjamin’s husband, Ilan Benjamin, a chemistry professor. On Oct. 4, the group sent a letter to UCSC Chancellor Cynthia Larive expressing “grave concerns” ahead of the inaugural conference of the Institute for the Critical Study of Zionism, held on Oct. 13–14.

Although the conference has been condemned in the Jewish community “for its deeply offensive, antisemitic content and goals,” the letter focuses on the fact the conference is co-sponsored by three academic units at UCSC: the CRES department, the Center for Racial Justice, and the Center for Creative Ecologies, the faculty members wrote.

“While these three units may justify their co-sponsorship as a legitimate expression of academic freedom, we vehemently disagree,” they wrote. “It is an outrage that three departments at a publicly funded university are not only sponsoring a politically motivated and directed conference that limits participation to those who agree with the conference’s antisemitic goals, they are committing their department to embracing these goals, thereby threatening their own faculty and students, and members of the entire campus community. This is not a legitimate expression of academic freedom, but rather an egregious abuse of it.”

Tyler Durden Tue, 10/17/2023 - 20:45

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International

Top Japanese Energy Trader Warns ‘World Running Short Of LNG For Energy Transition’ 

Top Japanese Energy Trader Warns ‘World Running Short Of LNG For Energy Transition’ 

Liquefied natural gas (LNG) plays a pivotal role in…

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Top Japanese Energy Trader Warns 'World Running Short Of LNG For Energy Transition' 

Liquefied natural gas (LNG) plays a pivotal role in the world's changing energy landscape. By substituting dirtier fuels, LNG curtails carbon dioxide emissions and enhances air quality. This underscores its vital importance in the energy transition. 

Bloomberg recently spoke with Kenichi Hori, president of Japanese trading house Mitsui & Co., who said global LNG demand will likely be much higher than forecasted and the current "pipeline of projects" won't be enough. 

"Announced projects in the world still won't make up for the supply needed when considering the energy transition that will take several decades," Hori said. 

Hori is one of Japan's top traders of LNG and believes, just like Chevron Corp. and Shell Plc, that the fuel will play a crucial long-term role in the energy transition. His comments follow a fracturing of the global LNG market as Europe no longer sources a majority of the fuel from Moscow but instead relies on the US and other countries abroad.  

According to BloombergNEF data, global LNG demand is set to rise 3.4% annually over 2022-26, reaching about 444 million metric tons. This comes as countries and companies view LNG as one of the cleanest fossil fuels that can lower emissions. Bloomberg noted supply will be tight until 2026 - after that, new projects are forecasted to come online. 

Hori pointed out his firm has "projects in the US, Middle East, and Africa" to ensure a diverse supply chain. 

He added his firm is interested in signing a contract with Qatar. He stated the Middle Eastern country is an "important source of LNG" as Japan strives for further diversification. 

Besides LNG, Hori invested $6.4 billion in an offshore wind project off Taiwan and exploring opportunities in e-methanol.  

"All these projects are going to shape the future of our portfolio that is transitioning from a traditional energy business to a low-carbon-intensive era," he said.

Last month, Lorenzo Simonelli, chairman and CEO of service company Baker Hughes, was quoted by Reuters at Gastech, the industry's largest conference in Singapore, as saying, "Natural gas will continue to play a critical role as a bridging and destination fuel for the energy transition."

The biggest takeaway is that LNG has a bright future as it becomes the 'transition fuel' as the world progresses to net-zero emissions by 2050. 

 

Tyler Durden Tue, 10/17/2023 - 20:25

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Government

DeSantis Draws Red Line On Gaza Refugees, GOP Field Follows Suit (Except Nikki Haley)

DeSantis Draws Red Line On Gaza Refugees, GOP Field Follows Suit (Except Nikki Haley)

Authored by Philip Wegmann via RealClear Politics,

Just…

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DeSantis Draws Red Line On Gaza Refugees, GOP Field Follows Suit (Except Nikki Haley)

Authored by Philip Wegmann via RealClear Politics,

Just three days: That’s how long it took for Republicans to adopt a new orthodoxy on how the Biden administration should respond to Palestinian refugees fleeing the violence in Gaza.

Florida Gov. Ron DeSantis went first.

“I don’t know what Biden’s going to do, but we cannot accept people from Gaza into this country as refugees,” DeSantis said in Iowa on Saturday, establishing a red line that the other frontrunners for the Republican presidential nomination would soon adopt.

As many as 2 million civilians are without food, water, and shelter in Gaza as Israel prepares to invade the densely populated region in response to a deadly Hamas terrorist attack earlier this month. While the White House has backed Israel from the start, the administration has also pressed powers in the region to open a humanitarian corridor to escape the bloodshed.

The final destination of those refugees, Republicans now say, should not be the United States. But they did not slam the door in unison. In a split screen on Sunday, DeSantis and former U.S. Ambassador to the United Nations Nikki Haley seemed to differ sharply on how the United States ought to respond.

Former President Trump, meanwhile, remained silent.

DeSantis reiterated his red line on refugees during an interview with “Face the Nation,” telling Margaret Brennan of CBS that “those Gaza refugees, Palestinian Arabs, should go to Arab countries. The U.S. should not be absorbing any of those.” And he reiterated his warning that, while “not everyone is a member of Hamas,” the culture in Gaza is so “toxic” that welcoming large numbers of refugees “would increase antisemitism” and “anti-Americanism” in the United States.

Haley rejected that broad characterization during a CNN interview Sunday, telling Jake Tapper that a large portion of Palestinians bristle under Hamas in Gaza.

“There are so many of these people who want to be free from this terrorist rule. They want to be free from all of that,” she said before adding that Americans have always been sympathetic to the idea “that you can separate civilians from terrorists.”

The former ambassador also called on Middle Eastern countries to step up and provide for Palestinians desperate to avoid the crossfire.

“Where are the Arab countries? Where are they?” Haley asked.

“Where is Qatar? Where is Lebanon? Where is Jordan? Where is Egypt? Do you know we give Egypt over a billion dollars a year? Why aren’t they opening the gates? Why aren’t they taking the Palestinians?”

When asked specifically if Haley believed that the United States should welcome refugees fleeing the crisis, a spokesman for Haley told RealClearPolitics on Monday that the ambassador “opposes the U.S. taking in Gazans” and that Haley believes “Hamas-supporting countries like Iran, Qatar, and Turkey should take any refugees.”

As poll numbers tighten in the race to be positioned as Trump’s possible, supporters of the Florida governor seized on that statement as evidence Haley had flip-flopped on the question. Hours later, when Trump said in Iowa that “we aren’t bringing in anyone from Gaza,” the DeSantis campaign suggested that the former president was plagiarizing DeSantis.

“Trump literally needs a teleprompter in order to finally catch up with a position DeSantis took three days ago on Gaza refugees,” DeSantis spokesman Andrew Romeo told RCP.

During a campaign stop in Iowa, Trump promised to update and enforce his travel ban to include anyone from Gaza. He went further, vowing to deny entry into the United States to anyone who adhered to “anti-American” ideologies. “If you empathize with radical Islamic terrorists and extremists, you’re disqualified,” he said. “If you want to abolish the state of Israel, you’re disqualified.”

Trump allies are fond of accusing DeSantis of copying and pasting the former president whenever the governor espouses policies adopted during the previous administration. This time, DeSantis supporters argue it is the other way around.

Ken Cuccinelli, who served as Trump’s deputy Homeland Security secretary, told RCP that DeSantis had become “the standard-bearer for standing with Israel and protecting American citizens.”

An immigration hawk and chairman of the pro-DeSantis super PAC, Never Back Down, Cuccinelli said that DeSantis “took the position to ban importing Gaza’s population without hesitation while everyone else is now following his lead.”

First-time candidate Vivek Ramaswamy, who is mired in fourth place in the polls, also added his voice to the emerging chorus of GOP voices. “Vivek would not allow refugees from Gaza into the U.S.,” a Ramaswamy spokeswoman told RCP. Instead, the businessman would look to help facilitate “their emigration to other countries, but this is not an issue where we should risk U.S. security or trade off the well-being of Americans here in the homeland.”

Support for Israel in the wake of the Hamas attack has been bipartisan and immediate. Conservative consensus on the refugee question took time to evolve.

Writing in the Wall Street Journal on Sunday, Jonathan Schanzer, a former terrorism analyst for the Treasury Department and a senior vice president at the Foundation for the Defense for Democracies, argued that the responsibility for sheltering refugees should fall on “Hamas’ enablers,” such as Iran, Turkey, and Qatar.

Some Democrats, like New York Rep. Jamaal Bowman, have called on the Biden administration to welcome refugees. “Fifty percent of the population in Gaza are children. The international community as well as the United States should be prepared to welcome refugees from Palestine while being very careful to vet and not allow members of Hamas,” the progressive “Squad” member said.

Populist conservatives such as political operative Ryan James Girdusky condemned that idea over the weekend and see the Republican rejection of those calls as part of a larger GOP evolution.

For decades, Republicans have been begging politicians to pump the breaks on immigration, but refugees especially,” Girdusky told RCP before arguing that welcoming refugees from Gaza would be tantamount to “importing antisemitism and intolerance.”

“Their ideology does not change because they cross national borders. That’s not to mention the genuine fear that terrorists can enter as refugees, which has happened a few times in the past,” the author of the National Populist Newsletter added. “Republican candidates who want to expand refugee status to Palestinians are out of touch with their voters.”

The conflict in the Middle East comes at a moment when Republicans are increasingly divided on the role the United States ought to take on the world stage. And while there is widespread support for Israel among the GOP, many in the 2024 field have grown critical of military aid for Ukraine. Former Vice President Mike Pence said over the weekend that when you have “leaders in the Republican Party signaling retreat on the world stage,” enemies are more likely to attack U.S. allies.

He pointed specifically at “voices of appeasement like Donald Trump, Vivek Ramaswamy, and Ron DeSantis that I believe have run contrary to the tradition in our party that America is the leader of the free world.”

For his part, DeSantis ended the weekend at Tampa International Airport. The governor signed an executive order earlier last week directing Florida’s Department of Emergency Management to begin logistical and evacuation efforts of Floridians stuck in Israel after commercial airlines began canceling flights, leaving U.S. citizens stranded in the region. On Sunday evening, nearly 300 Americans returned stateside on a jetliner chartered by the state of Florida with more scheduled in the coming days.

I am proud of how quickly we have been able to activate resources and do what the federal government could not – get Floridians and other Americans back home,” the governor said in a statement.

Tyler Durden Tue, 10/17/2023 - 20:05

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