The way I see it… by Tom McGrath
Our Chairman’s perspective on the political environment we live in and the current electoral races…
19 December 2011
1. It’s About the Incumbent
2. Christmas Cheer
3. See It First
4. Repeal Obamacare
5. The Purpose of Government Programs
6. The Existing Paradigm is Failing
8. Why Is Gingrich Gaining?
9. What Constitution?
1. It’s About the Incumbent
If you haven’t noticed, Democrats are absolutely giddy that Newt Gingrich has shot up to a huge lead in the early Republican primary states (except New Hampshire). They’re convinced he would be crushed by Obama in the general election. But they forget an irrefutable truism of American politics: when an incumbent president runs for re-election, the election is first and foremost a referendum on the incumbent. The high hopes of Election Day four years earlier have faded; the results are in, and the first questions voters ask are: “Does this guy deserve another four years? Can we take another four years of this?”
A recent smattering of statistics shows why many Democrats are desperate to talk about anyone except Obama and anything except his record.
- Unemployment is 8.6% (it would be over 11% if President Obama had not presided over an unprecedented contraction in the labor market; over four million working-age Americans have given up hope of finding a job).
- Median income has fallen 10% in four years (of which 6.5% has occurred since the economic “recovery” began in mid 2009). Fewer Americans are working are – and those who are, are working fewer hours than before.
- 75% of Americans say the country is on the wrong track. Unprecedented.
- Only 42% of Americans say Obama deserves to be re-elected; 54% say he doesn’t. Only 6% of Americans don’t have an opinion on this.
- Only 42% of Americans approve of Obama performance as President; 50% disapprove.
- Only 34% of Americans approve of Obama’s handling of the economy; 60% don’t.
Anyone one of these figures would pose a problem for an incumbent president; taken together, they’re toxic. Jimmy Carter’s 1980 re-election campaign was the last time Democrats seemed so thrilled by a Republican candidate: they were certain then that Carter could beat the reactionary, ultra-conservative, washed-up movie actor, Ronald Reagan.
2. Christmas Cheer
Santa Claus and God
PJ O’Rourke has been offering good political humor for at least twenty years as this excerpt from his “Parliament of Whores” shows:
“I have only one firm belief about the American political system, and that is this: God is a Republican and Santa Claus is a Democrat.
God is an elderly or, at any rate, middle aged male, a stern fellow, patriarchal rather than paternal and a great believer in rules and regulations. He holds men accountable for their actions. . . . He is politically connected, socially powerful and holds the mortgage on everything in the world. God is difficult. God is unsentimental. It is very hard to get into God’s heavenly country club.
Santa Claus is another matter. He’s cute. He’s nonthreatening. He’s always cheerful. And he loves animals. He may know who’s been naughty and who’s been nice, but he never does anything about it. He gives everyone everything they want without the thought of quid pro quo.
Santa Claus is preferable to God in every way but one: there is no such thing as Santa Claus.”
Hot Air Democrats
A woman in a hot air balloon realized she was lost. She lowered altitude and spotted a man in a boat below. She shouted to him, “Excuse me, can you help me? I promised a friend I would meet him an hour ago, but I don’t know where I am.”
The man consulted his portable GPS and replied, “You’re in a hot air balloon approximately 30 feet above a ground elevation of 2,346 feet above sea level. You are 31 degrees, 14.97 minutes north latitude and 100 degrees, 49.09 minutes west longitude.”
She rolled her eyes and said, “You must be a Republican.” “I am,” replied the man. “How did you know?”
“Well,” answered the balloonist, “everything you told me is technically correct, but I have no idea what to make of your information, and I’m still lost. Frankly, you’ve not been much help to me.”
The man smiled and responded, “You must be a Democrat.” “I am,” replied the balloonist. “But how did you know?”
“Well,” said the man, “You don’t know where you are or where you’re going. You’ve risen to where you are due to a large quantity of hot air. You’ve made a promise that you have no idea how to keep, and now you expect me to solve your problem. You’re in exactly the same position you were in before we met, but somehow, now, it’s my fault.”
3. See It First
Former US House of Representatives Majority Leader Richard Armey (R-Texas) was one of the sharpest wits on the Hill. He noticed that Democrats have a strong tendency to believe that the goodness of their intentions suffices to create good policy. Republicans are more skeptical and much more concerned about results of policies. He once summed it up up this way: “The difference between a Republican and a Democrat is this: A Republican believes it when he sees it. A Democrat sees it when he believes it.” Amen.
4. Repeal Obamacare
There are two good reasons why Democrats loathe Scott Rasmussen: he has been very accurate and very early in predicting the electoral whipping that Democrats have incurred since the New Jersey and Virginia gubernatorial races in November 2009. His most recent poll of likely voters brings more bad news for Democrats: by 55 to 35% Americans support the repeal of Obamacare. Since June 2011, Rasmussen has taken 21 polls on Obamacare’s repeal. In each poll, repeal has won by double-digits.
President Obama would like Americans to forget about Obamacare and stop thinking about its repeal. The Republican nominee’s job will be to make that impossible.
5. The Purpose of Government Programs
You can expect that Republican will be tarred as the heartless, cruel villains dedicated to crippling cuts in government spending. Mr. Kaminski, Wall Street Journal editorial board member, offers a good guideline: “Even F.A. Hayek thought prosperous societies ought to help the less fortunate. . . . American reformers, in the words of Harvard political scientist Bill English, need ‘to make the moral argument that you should spend federal monies to pay for poor children’s meals and not fluff union pension schemes.’”
6. The Existing Paradigm is Failing
In 1977, an economics professor gave some of the best advice I’ve ever received: read the editorial page of The Wall Street Journal every day. Back then, nearly all economists failed to explain Jimmy Carter’s stagflation (high inflation and high unemployment) because Keynesian theory couldn’t conceive it. Reagan, with the help of Jack Kemp, smashed the then-existing paradigm. The second intellectual bankruptcy of Keynesian economics is occurring before our eyes and a recent Wall Street Journal editorial summarizes the current confusion clearly:
“A large part of the problem is the state of Europe’s intellectual debate, which pits government spending against “austerity” as the only two economic policy choices. The Keynesians are blaming Europe’s looming slowdown on belt-tightening governments, as if public spending is the only way to spur economic growth. But the problem across most of Europe isn’t a lack of government spending that typically represents about half of GDP. It’s the failure to create the conditions for private investment and growth.
When the financial panic hit in 2008, the EU and IMF urged governments across the Continent to spend like crazy to avoid recession. So they spent, only to discover that such spending is unsustainable. Now the same wise men are urging governments to raise taxes to offset all that spending and even to spend more ‘in the short term.’ The one policy none of these leaders has tried is the Reagan-Thatcher model of cutting taxes to spur growth.”
Louis Woodhill of Forbes magazine provides some powerful facts.
“The stunning decline in labor force participation has been the real story of Obama’s economic recovery. The protracted decline in labor force participation under Obama is unprecedented in American history. Obama is the first president to preside over a shrinking American workforce. Since June 2009, when the recession ended, the working age population has grown by 4.8 million, while the number of Americans working or looking for work has declined by 0.9 million.
During the first 35 months of Obama’s term, the labor force declined by 0.7 million. Under George W. Bush, the labor force increased by 3.8 million during the comparable period in his first term of office During his eight-year presidency, the labor force increased by 11.3 million.
If adjusted to the labor force participation rate to that assumed in Obama’s economic plan, the unemployment rate for November 2011 would be 11.1%. The only reason that November unemployment was 8.6% rather than 11.1% is because Obama’s policies had caused 4.3 million unemployed Americans to drop out of the labor force. . . . . .
The employment numbers also strongly suggest that the 2-percentage-point cut in payroll taxes that took effect on January 1, 2011 was a bust. The gain in total employment during the first 11 months of 2011 was only 0.3 million greater than the gain in the same period in 2010. Given that the payroll tax cut increased this year’s deficit by $109 billion, each incremental job created by this tax cut cost about $360,000. Since the average annual wage for people working full time is less than $46,000, spending $360,000 per job created does not represent a very good deal for taxpayers.”
8. Why Is Gingrich Gaining?
According to Taranto and Noonan, it’s because he’s combative, the conservative case must be made (both of which weaken Romney’s appeal), and we’re facing a very serious problem.
James Taranto of the Wall Street Journal sums up a truth: “Republicans have watched Gingrich excel in the debates and sense that he’s the candidate who can confront and make the conservative argument: ‘. . . what has appealed to Republicans about Gingrich in this year’s debates has been his willingness to challenge the assumptions of the (usually) liberal moderators. . . . [He was] aggressive in refusing to accept [CBS newsman Scott] Pelley’s smug presumption of moral and intellectual superiority — a left-liberal presumption that rankles conservatives, that is very common among the leaders of cultural institutions, and that Obama very much personifies.’
Republicans don’t look back at 1980 and 1984 fondly just because Reagan won. They do so because he crushed a president they had come to loathe, and then won a historic victory against that former president’s more liberal VP. With Obama, there is a similar, if not deeper loathing, a sense that he is a charlatan whom the media has been covering for consistently over the past five years.”
Peggy Noonan offers a slightly different explanation: “Republicans on the ground who view Mr. Gingrich from afar are more likely to see him this way: ‘Who was the last person to actually cut government? Who was the last person who actually led a movement that balanced the federal budget? . . . The last time there was true welfare reform, the last time government was cut, Gingrich did it.’
And that is exactly what I’ve been hearing from Newt supporters who do not listen to talk radio. They are older voters, they are not all Republicans, and when government last made progress he was part of it. They have a very practical sense of politics now. The heroic era of the presidency is dead. They are not looking to like their president or admire him, they just want someone to fix the crisis. The last time helpful things happened in Washington, he was a big part of it. So they may hire him again. Are they put off by his scandals? No. They think all politicians are scandalous.”
So What Has He Accomplished?
Many Republicans might have a difficult time identifying the major achievements of the Obama Administration. Democrats won’t; so take a look at his major accomplishments, in the eyes of a leading liberal magazine.
I recall the hilarious reaction to Bill Clinton’s claim to success after his first two years: the Motor Voter Act. Surely you remember that landmark legislation; states were required to offer voter registration services at the places where people get driver licenses. It was widely assumed that this would make it easier to register new Democratic voters. Of course, it was also considered a form of Jim Crow-racism to require these newly-licensed drivers to bring that photo identification to the polling place on Election Day. Bill Clinton’s other legislative priorities came to naught: healthcare, gasoline tax increases, and mini-stimulus. He decided not to mention the income tax increases in the 1994 mid-term elections.
Kevin Drum of the far-left magazine Mother Jones gives a good rundown of the progressive achievement of the current administration: a big stimulus bill, a healthcare reform bill, student loan reform, an end to the Bush torture regime, the Lily Ledbetter Fair Pay Act, a hate crimes bill, a rescue of the American car industry, resuscitation of the NLRB, passage of New START, the death of Osama bin Laden, withdrawal from Iraq, a decent start on rationalizing Pentagon procurement, repeal of DADT, credit card reforms, gas mileage improvements, a second stimulus in 2010, and financial reform legislation.
Certainly sounds more impressive than the Motor Voter Bill, but many Americans might have a less than fully favorable opinion of these great achievements.
- a big stimulus bill (an incredible amount of debt for almost no economic growth),
- a healthcare reform bill (increased government dependency, more federal government debt),
- student loan reform (increased government dependency, more federal government debt),
- an end to the Bush torture regime (why waste time, the current Administration kills with drones, but seems not to worry about getting any valuable intelligence regarding planned terrorist attacks),
- the Lily Ledbetter Fair Pay Act, a hate crimes bill, (whatever)
- a rescue of the American car industry (stiff the bond holders and give Chrysler to the United Auto Workers, abuse our bankruptcy procedures),
- resuscitation of the NLRB (cripple the efforts Boeing, our largest exporter, to cut labor costs and remain competitive),
- passage of New START (there’s no ‘new’ in the new START, it’s an extension of the status quo),
- the death of Osama bin Laden (a courageous act for which credit should be given),
- withdrawal from Iraq, (time will tell, pointless to brag about it now),
- a decent start on rationalizing Pentagon procurement, repeal of DADT, credit card reforms, gas mileage improvements, (whatever)
- a second stimulus in 2010 (increased government dependency, more federal government debt), and
- financial reform legislation (a crushing regulatory burden on small banks, while assuring that the huge banks know they’re too big to fail, thus they’ll be bailed out in the next crisis).
A long list indeed, but with achievements like those, Obama should have settled for a Motor Voter legacy.
9. What Constitution?
Insofar as the US Constitution was designed to limit the powers of the deferral government, it has required an ever-increasing amount of intellectual trickery by liberal and Democrats to find some justification of their expansive view of federal powers. The great over-reach of the Obama Administration has sparked a great, and long-overdue, debate on the limits of the power of our federal government as enumerated in the US Constitution. The individual mandate of the healthcare reform legislation gives Republicans an excellent opportunity to show that many of the powers that our federal government has aggregated for itself have a dubious or illegitimate heritage. Democrats can get very uppity when questioned about the constitutionality of their policies, and even more so if they’re accused of being less than faithful defenders of the US Constitution. Other Democrats are more candid.
Rexford Tugwell was one of the great architects of President Roosevelt’s New Deal, a founding member of the famous “Brain Trust” who sought to bring the unlimited benefits of the federal government to solving (or prolonging) the Great Depression. Years after his retirement from public life, he reminisced about the how the US Constitution had to be ‘tortured’ to make his progressive policies possible: “To the extent that these new social virtues (i.e., New Deal policies) developed, they were tortured interpretations of a document (i.e., the Constitution) intended to prevent them.” Rexford G. Tugwell, “A Center Report: Rewriting the Constitution,” Center Magazine, March 1968.
12 December 2011
Understand the Unemployment Rate
It’s worse than you think. William Galston, a former President Clinton domestic advisor, a senior fellow at the Brookings Institution and writer for the leftish New Republic, is a rare bird: a Democrat willing to admit that President Obama’s political situation is very vulnerable.
He points out in a recent post that there’s a very good reason Joe Biden hasn’t been sent on something akin to the Summer of Recovery Tour 2010 upon last week’s announcement that the unemployment rate had fallen 8.6%: a contraction of the labor force accounted for more than half the reduction in the unemployment rate. It would look churlish if we started celebrating the creation of only 125,000 jobs when another 315,000 Americans gave up looking for work.
Despite the growth of the working-age population over the past four years, the labor force has shrunk. Karl Rove pointed out on Fox News last week that if Americans of working age were participating in the labor force at the same rate as they were upon President Obama’s inauguration, the labor force would be nearly 5 million people larger, and the unemployment rate would be over 11%. Hold the cheers.
Economic Misery in One Graph
This terrifying chart is prepared by economists who blog at Calculated Risk Blog.com. It shows the percent of jobs lost and recovered through the post WWII recessionary cycles. President Obama’s re-election depends largely on his ability to convince many Americans that the depth and duration of this recession is not his fault.
Gingrich Riding a Wave
Close counts in horseshoes, dancing and hand grenades. Timing is everything in investing, comedy, and politics; and it looks like Newt Gingrich has great timing . . . and a lot of luck. His lead is mushrooming just as Mitt Romney seems to be doing a good imitation of Rudi Giuliani – leading in all the polls for six months, only to get washed out in the first primaries of 2008. Note that Romney hasn’t lost much ground; his polling has been stuck in the low- to mid-20’s for months. But Gingrich is getting all support Herman Cain lost.
Gallup’s polling of Republicans and Republican-leaning independents now shows Newt Gingrich with a 15-point lead over Mitt Romney — 37 to 22%. In the previous Gallup poll, taken three weeks ago, Gingrich led Romney by just 1 point — 22 to 21%. Gingrich appears to have acquired nearly all of the 16% support that Herman Cain had in the last poll, as the rest of the GOP field has collectively moved up only 3 percentage points in Cain’s absence.
In the five Gallup polls taken over the past three months (i.e., ever since the debates began attracting viewers), Romney has always registered between 20 and 24% support, while Gingrich’s level of support has risen steadily — from 5%, to 7%, to 12%, to 22%, and now to 37%.
So Who Would Beat President Obama?
The answer may be less clear than the President’s re-election campaign thinks. Jeffrey Anderson of The Weekly Standard highlights the most recent Quinnipiac poll which shows that, among independent voters, Gingrich and Romney both lead Obama in the critical states of Florida and Ohio.
President Obama desperately needs to regain independents to get re-elected, but among independents, Gingrich leads Obama 45 to 41% in Florida and by 39 to 38% in Ohio. Romney leads Obama 46 to 36% in Florida and 41 to 37% in Ohio. So, when put against President Obama, Mitt Romney polls somewhat better than Newt Gingrich amongst independents, but both beat the president in this key voter block.
Democrats Losing Voters in Key States
Democratsare losing ground in key battleground states according to a study from the Third Way.
Over 825,000 registered Democrats in Colorado, Florida, Iowa, Nevada, New Hampshire, New Mexico, North Carolina and Pennsylvania have left the party rolls since 2008; far fewer Republicans (378,000) have done the same. Meanwhile, the number of registered independents increased 254,000. This implies a net gain of 447,000 Republican voters in these states, which may not seem like alot; but, that’s sum total of votes by which John McCain lost Florida, Colorado, New Hampshire, and North Carolina.
The Democratic decline is especially stark in two swing states, Iowa and Florida. In Iowa, the number of registered Democrats has declined almost 8% since 2008, while the number of registered Republicans has increased by 2%. In Florida, Democratic registration decreased by 5%, while Republican registration dipped 2.2%. Candidate Obama won Iowa by only 9% (54-45%) and won Florida by only 2.5%.
In every one of the states, Democrats lost ground to Republicans. In 2008, pundits expressed amazement at the number of new voters the Obama campaign registered. It seems that some of those voters, now disenchanted, are leaving the party.
Obama’s Fairness Speech
President Obama was out testing or announcing his re-election campaign themes in Kansas this week. The uplifting, post-partisan promise of Hope and Change has been replaced by a set of brass knuckles and it doesn’t look pretty. Investor’s Business Daily has compiled a short list of the misleading, inaccurate, deceitful, dishonest rhetoric that we might have to suffer through next year.
- Obama said tax cuts and deregulation have “never worked” to grow the economy. In fact, there’s ample of historical evidence that countries with lower taxes, less government, sound money, free trade consistently produce greater overall prosperity. The Democratic Congressional leadership is comprised mostly of McGovernite, Watergate-era pols who, along with President Obama, seem dedicated to erasing any memory of the Ronald Reagan presidency which saw tax cuts, deregulation, and the creation of 21 million net new jobs in the 1980’s and a 14 fold increase in the stock market in 25 years. It happened, get over it.
- Obama said that Bush’s tax cuts produced “massive deficits” and the “slowest job growth in half a century.” In fact, Obama’s spending hikes produced today’s massive deficits. Obama gets his “slowest job growth” number by including huge job losses during his own term in office.
- Obama said that during the Bush years, “we had weak regulation, we had little oversight.” In fact, regulatory staffing climbed 42% under Bush, and regulatory spending shot up 50%. And the number of Federal Register pages was far higher under Bush than any previous president.
- Obama said the “wealthiest Americans are paying the lowest taxes in over half a century.” In fact, the federal income tax code is more progressive than it was in 1979, according to the CBO. IRS data show the richest 1% paid almost 40% of federal income taxes in 2009, up from 18% back in 1980.
- Obama said we can keep tax breaks for the rich in place, or make needed investments, “but we can’t do both.” In fact, repealing the Bush tax cuts on the “rich” would raise about $70 billion a year, a tiny fraction of projected deficits.
America is not the Only Economic Threat
As America’s economy struggles to create new jobs, the last thing we need is an economic collapse in Europe. The last thing President Obama needs is a vivid and catastrophic example of the consequences of massive budget deficits. The meltdown of the European single currency could have huge global consequences.
It is nearly impossible to escape the conclusion that Europe’s leaders have failed miserably to foresee or to understand the scope of the euro problem. The institutions, treaties, and protocols that have been painstakingly negotiated for decades have proven themselves woefully inept at solving Europe’s currency and debt crisis. The single European currency was promised to provide political harmony, economic growth, and greater European cooperation. The results have been far below expectations; there are very few Europeans who have any living memory of a Europe more divided and bitter.
Americans with an interest in history and economic policy remember how Europeans were warned repeatedly that a monetary union was impossible without political integration and that the proposed members of the single currency were economically incompatible. It wouldn’t work and any effort to force the currency on Europe was doomed. Of course, Europeans took these criticisms as irrefutable proof that Americans were terribly frightened that the success of the euro would end their “dollar hegemony.”
The euro crisis may be postponed by an agreement to give Berlin greater control over the economic policies of many euro member states, but it will not be solved until Europe addresses the root of the problem: it needs policies aimed at promoting much greater economic growth and significantly reducing the level of government spending. Anything else, is just postponing a train wreck.
The democracy deficit that has long been the source of European voter’s frustration with Brussels will become much worse. Max Hastings of the Daily Mail summarized the situation in a recent column: For the Merkel-Sarkozy rescue plan to work, Germany would need to govern the southern European states as colonies, with her own financial pro-consuls in every treasury, her own monitoring officers in every government department . . . [P]ower to check the books and crack the whip will be vested undemocratically in Brussels. The European Commission and ECB will have extraordinary new responsibility and authority, which will be exercised well beyond the scrutiny or veto of mere voters and taxpayers.
As David Marquand wrote: “At the heart of the European project lay an unchallenged but pervasive ambivalence about politics. In transcending the nation states, the founding fathers were also seeking to transcend — or rather to escape from — the messy, vulgar, clamorous conventionalities of political life.’’
A single Saudi Prince
And if all the foregoing wasn’t enough to frighten the be-jeebers out of you, thank our friends the Saudis for reminding us that there is one over-riding threat that could change the world overnight.
At a regional security forum in Riyadh, Saudi Arabia’s Prince Turki Al-Faisal (former ambassador to the US and intelligence chief) said that an Iranian quest for nuclear weapons and Israel’s presumed nuclear arsenal might force Saudi Arabia to follow suit…
“It is our duty toward our nation and people to consider all possible options, including the possession of these weapons,” Prince Turki was quoted as saying.
An Iranian bomb means that the Saudis will get one, and given their close ties with Pakistan they might get it quickly. Once they have a bomb, Turkey and Egypt will want one too. Prince Turki’s comments are meant to push President Obama to take a more hawkish approach toward Iran and to remind him that a nuclear Iran will unleash a nuclear arms race in the most dangerous region in the world.
CNN confirms President Obama’s very low job approval rating and finds that half blue collar voters have had enough.
44% of Americans approve of the job the president’s doing, 54% disapprove. ”The biggest change comes among white Democrats with no college education, a group typically considered the core of the party’s blue-collar constituency,”… “Half of all white Democrats with no college education say they don’t want President Obama heading their party’s ticket next year.”
Michigan in play? Candidate Obama crushed Sen John McCain in Michigan (57 – 41%) in 2008; it hasn’t voted Republican since 1988, but… If Michigan votes Republican, it becomes nearly impossible for Obama to build a winning Electoral College strategy. Romney Leads Obama in Michigan
First poll of the primary season to show a Republican candidate leading inMichigan. The last poll by SurveyUSAin October showed Obama beating Romney by 11 points. Yesterday’s EPIC-MRA survey has Romney up by 5…
“Ideology over competence” to invert Michael Dukakis’s famous phrase. Who would have thought? Obama is accused by a left-leading panel of experts of nominating vet unqualified judges to promote a far left judicial agenda. ABA: More Obama Judicial Nominees “Unqualified” Than Those of Bush
Liberals often derided the Bush administration for what they claimed was the poor quality of its judicial nominees who were widely declared by the media to be chosen largely for their politics rather than any other consideration. But it turns out that far more of Barack Obama’s choices for the federal bench have been rejected as “unqualified” by the liberal vetting group that was considered a thorn in the side of George W. Bush.
It’s becoming increasingly hard to say whether Newt Gingrich or Mitt Romney would fare better against Barack Obama. The latest Rasmussen poll of likely voters shows Gingrich trailing Obama by just 6 percentage points — 46 to 40%. Less than a month and a half ago, Gingrich trailed Obama by 15 points (49 to 34%). Meanwhile, Romney trails Obama by just 1 point — 43 to 42%.
Some important stats regarding the income equality issue that President Obama’s recent class warfare rhetoric helped still the Occupy Wall Street movement. The Federal Government’s Job Is Not to Redistribute Income Jeffrey H. Anderson
The Washington Post’s Greg Sargent claims to debunk the conservative argument against raising taxes on wealthier Americans, by drawing attention to “how much the share of their own income they are paying in taxes” and observing how much that share “has shrunk”. But the facts don’t back him up.
Did the Super Committee fail or did the Democrats want only one headline: Republicans Agree to One Trillion Dollar Tax Increase. Read the “Norquist Myth” by Charles Krauthammer…
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