Quotulatiousness

August 18, 2016

QotD: The environmental and economic idiocy of the ethanol mandate

Ever since the beginning of the ethanol mandate it was obvious to anybody with eyes to see that the whole thing was a boondoggle and a huge waste for everybody except ADM. What the Greens failed to understand is that if you prop up corn prices by buying, distilling and burning massive amounts of corn whisky in cars, two things are going to happen. One the price is going to go up, making things like cow feed and other uses of corn more expensive and 2. farmers are going to, without restraint, plant ever larger amounts of corn, which will 1. push out other crops like wheat and 2. require more land use to plant even more corn. Which is why you can now go from Eastern Colorado to Western NY and essentially see nothing but corn. Millions of acres of corn, across the country, grown to burn. Somehow this was supposed to be environmentally friendly?

J.C. Carlton, “The Law Of Unintended Consequences Hits Biofuels”, The Arts Mechanical, 2016-08-07.

August 16, 2016

QotD: The real danger of expanding the power of the state

Filed under: Government, Quotations — Tags: , , — Nicholas @ 01:00

Every expansion of the state incites more people to compete – and to compete more intensely – to possess the power over others that that expansion brings. From each individual’s perspective, it’s better to be in the group that exercises power rather than in the groups against whom the power is exercised. Unlike competition in markets, competition for power wastes material resources and human time and energy (rent-seeking wastes); such competition is never win-win but, rather, win-lose. But also unlike competition in markets, competition for power results in the worst form of inequality – indeed, the only form of inequality that warrants legitimate concern – namely, inequality of power. Those with state power, regardless of how they acquire it, can command those without state power. Those with state power use force to override the choices of those without state power. Those with state power do the choosing; those without state power do the obeying.

Unlike market-enabled differences in monetary incomes and wealth, this species of inequality – inequality of power – is inhumane and destructive, and it results from humans’ most primitive impulses.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2016-07-25.

August 12, 2016

Good news! Electricity in Ontario is cheaper to produce than ever before!

The bad news? It’s more expensive to consume than ever before, thanks to the way the Ontario government has manipulated the market:

You may be surprised to learn that electricity is now cheaper to generate in Ontario than it has been for decades. The wholesale price, called the Hourly Ontario Electricity Price or HOEP, used to bounce around between five and eight cents per kilowatt hour (kWh), but over the last decade, thanks in large part to the shale gas revolution, it has trended down to below three cents, and on a typical day is now as low as two cents per kWh. Good news, right?

It would be, except that this is Ontario. A hidden tax on Ontario’s electricity has pushed the actual purchase price in the opposite direction, to the highest it’s ever been. The tax, called the Global Adjustment (GA), is levied on electricity purchases to cover a massive provincial slush fund for green energy, conservation programs, nuclear plant repairs and other central planning boondoggles. As these spending commitments soar, so does the GA.

In the latter part of the last decade when the HOEP was around five cents per kWh and the government had not yet begun tinkering, the GA was negligible, so it hardly affected the price. In 2009, when the Green Energy Act kicked in with massive revenue guarantees for wind and solar generators, the GA jumped to about 3.5 cents per kWh, and has been trending up since — now it is regularly above 9.5 cents. In April it even topped 11 cents, triple the average HOEP.

The only people doing well out of this are the lucky cronies of the government who signed up for provincial subsidies on alternative energy (primarily wind and solar), who reap rents of well over 100% thanks to guaranteed minimum prices for electricity from non-traditional sources.

August 2, 2016

QotD: The deadweight costs of different forms of taxation

Filed under: Economics, Government, Quotations — Tags: — Nicholas @ 01:00

All taxes have something called a “deadweight cost”. This is simply economic activity that doesn’t happen because of the simple fact that we’re levying a tax. If we tax the purchase of apples then fewer apples will be purchased. This is entirely divorced, by the way, from any good that might be achieved by how we spend that revenue collected. We also know that different taxes have different deadweight costs. We even have a ranking of them. At the top, with the highest costs for the revenue collected, we’ve transactions taxes like the financial transactions tax under consideration. This is so expensive that it’s a really, really, bad idea to tax in this manner. Then come capital and corporate taxes, then with lower again deadweights incomes taxes, then consumption and then finally repeated taxes on real property, or land value taxation. If we were interested only in efficiency (we’re not, equity is important too) then we would collect as much as we could from a land value tax, then from Pigou and sin taxes (carbon emissions, cigarettes, booze) then general consumption taxes and so on. Perhaps leaving corporates and capital entirely untaxed. And there’s a whole field of study, optimal taxation theory, that suggests that we really should do that and the general prescription is the progressive consumption tax. There’s general agreement that on purely those efficiency grounds this is about the best we can do with a tax system.

Tim Worstall, “Surprisingly Perhaps, State Republicans Are Actually Correct On The Economics Of This”, Forbes, 2015-02-14.

July 25, 2016

Considering martial law as a possible electoral end-game tactic

Filed under: Government, Military, USA — Tags: , , , — Nicholas @ 04:00

Scott Adams considers how likely the election of Il Donalduce would be to prompt President Obama to declare martial law to save the republic:

… keep in mind that Democrats have successfully sold the “racist strongman” narrative about Trump to their own ranks. If they’re right about Trump, we need to start getting serious about planning for martial law, for the good of the country and the world. No one wants another Hitler. And if they’re wrong, we still need to plan for martial law because Democrats think they are right. That’s all it takes.

Imagine, for example, that violence against police escalates because of the rhetoric on the left. That seems likely. Then add in some more videos of police shooting unarmed African-American men and you have all the ingredients for riots, followed by martial law.

[…]

My best guess is that 30% of the country believes (incorrectly) that we are heading toward some sort of pre-Nazi situation in the United States, where President Trump calls on his legion of racist supporters to do some ethnic cleansing. That’s all completely ridiculous, but it doesn’t stop perhaps 30% of the country from believing it.

Unlike most campaign rhetoric of the past, the attacks against Trump are designed to generate action, not words. Normal campaigns ask for little more than your vote. But this time, Clinton’s side – mostly surrogates and supporters – have defined their opponent as a Nazi-like dictator who will destroy the country, if not the entire world. In that situation, action is morally justified. And that action could include riots and violence against authority.

How much violence against authority would it take for President Obama to declare martial law and stay in power?

Less than you think. Television coverage will make every act of violence seem a hundred times worse than it is.

July 19, 2016

Sorting through the possibilities in Turkey

Filed under: Europe, Government, Military — Tags: — Nicholas @ 03:00

As the situation in Turkey stabilizes, Tom Kratman says it probably wasn’t Erdoğan’s version of the Reichstag fire:

So what are the possibilities?

A. The coup attempt could have been more or less spontaneous, incited by word that Erdoğan’s government was about to start arresting soldiers that either adhered to liberal Islamic cleric, Fethullah Gülen, or on some other pretext.

B. It could have been preplanned for a later date and only moved ahead because of the fear of arrest.

C. It could have been a small scale plot, as per B., above, but one of which Erdoğan was fully apprised, and the timing of which he was able to control by issuance of arrest warrants, as per A. and B.

D. It could have been, start to finish, Erdoğan and his party’s attempt at a Reichstag Fire, a staged incident, employing ignorant dupes, started and sabotaged in order to justify massive repression, bloodshed, and tyranny. You know; getting off the train.

E. It was a subplot of a larger Armed Forces-run plot for a real coup.

We can probably dispense with D right off; conspiracies of this kind are too difficult of execution, too unlikely to come off well, that it’s not for anyone but a fool to try. Erdoğan may be many things, and is possibly all of them, but a fool he is not. Likewise, one is inclined to discount E. Again, when the Turkish Army decides to do something it tends to do it forthrightly, competently, and without any undue restraint. If the Turkish armed forces as a whole had been not just doing the planning for a coup, but had such plans and preparations for execution well in hand, or, at least, well advanced, then the coup actors’ calls for assistance and support would not have been so ignored and the streets of Turkey would have seen enough soldiers on them, quickly enough, that defiance would have been unlikely in any case, and massive in no case.

A and B are both plausible, and there is evidence for both of those and C, but I’m going to go out on a limb and suggest that what really happened was C, that there was a plot on a minor scale, that Erdoğan knew about it in considerable detail, that he let it go forward intending to dictate by his actions the time for the coup, and at the worst possible time for the coup, and that he was prepared to countercoup and to take full advantage of the opportunities that would open to him via a successful countercoup.

None of the evidence for C rises above the circumstantial, of course, but taken together, the body of evidence is persuasive. Consider: 1) Erdoğan was out of town at the precise right times, yet, 2) he was able to get back to Istanbul at the precise right times, while 3) easily avoiding capture, 4) having lists already prepared of military officers to dismiss, very nearly the entire Turkish officer corps above the rank of captain, I’ve heard, and 5) also had extensive lists of prosecutors and judges to purge.

That last one is the most persuasive to me, because we don’t have any evidence that the judges or prosecutors had anything to do with the coup. Mere opportunism? Maybe, but the speed of the thing and the thoroughness, given the lack of time…no, I’m not buying opportunism; Erdoğan was ready! Why? Because he knew! How? Because he was forewarned, possibly well in advance, even as to timing because he dictated the timing.

July 18, 2016

Edward Luttwak on the Turkish coup attempt

Filed under: Europe, Government — Tags: , , , , — Nicholas @ 03:00

If there’s anyone more qualified than Luttwak (author of Coup d’État: A Practical Handbook (1968)) to discuss the recent coup attempt against President Erdoğan and his government, they must have been participants:

Rule No. 2 in planning a successful military coup is that any mobile forces that are not part of the plot — and that certainly includes any fighter jet squadrons — must be immobilized or too remote to intervene. (Which is why Saudi army units, for example, are based far from the capital.) But the Turkish coup plotters failed to ensure these loyal tanks, helicopters, and jets were rendered inert, so instead of being reinforced as events unfolded, the putschists were increasingly opposed. But perhaps that scarcely mattered because they had already violated Rule No. 1, which is to seize the head of the government before doing anything else, or at least to kill him.

The country’s president, Recep Tayyip Erdoğan, was left free to call out his followers to resist the attempted military coup, first by iPhone and then in something resembling a televised press conference at Istanbul’s airport. It was richly ironic that he was speaking under the official portrait of Mustafa Kemal Atatürk, the founder of Turkey’s modern secular state, because Erdoğan’s overriding aim since entering politics has been to replace it with an Islamic republic by measures across the board: from closing secular high schools so as to drive pupils into Islamic schools to creeping alcohol prohibitions to a frenzied program of mosque-building everywhere — including major ex-church museums and university campuses, where, until recently, headscarves were prohibited.

Televised scenes of the crowds that came out to oppose the coup were extremely revealing: There were only men with mustaches (secular Turks rigorously avoid them) with not one woman in sight. Moreover, their slogans were not patriotic, but Islamic — they kept shouting “Allahu ekber” (the local pronunciation of “akbar”) and breaking out into the Shahada, the declaration of faith.

Richly ironic, too, was the prompt and total support of U.S. President Barack Obama, German Chancellor Angela Merkel, and the European Union’s hapless would-be foreign minister, Federica Mogherini, in the name of “democracy.” Erdogan has been doing everything possible to dismantle Turkey’s fragile democracy: from ordering the arrest of journalists who criticized him, including the outright seizure and closure of the country’s largest newspaper, Zaman, to the very exercise of presidential power, since Turkey is not a presidential republic like the United States or France, but rather a parliamentary republic like Germany or Italy, with a mostly ceremonial president and the real power left to the prime minister. Unable to change the constitution because his Justice and Development Party (AKP) does not have enough votes in parliament, Erdogan instead installed the slavishly obedient (and mustachioed) Binali Yildirim as prime minister — his predecessor, Ahmet Davutoglu, had been very loyal, but not quite a slave — and further subverted the constitutional order by convening cabinet meetings under his own chairmanship in his new 1,000-room palace: a multibillion-dollar, 3.2 million-square-foot monstrosity (the White House is approximately 55,000 square feet), which was built without authorized funding or legal permits in a nature reserve.

Britain’s new Prime Minister

Filed under: Britain, Government, Politics — Tags: , , , — Nicholas @ 02:00

Theresa May has become the second female prime minister in British history after the victory of the Brexit referendum campaign in late June (although she was a Remain-er herself). In The Spectator, Harry Cole indicates what Brits should expect from their new head of government:

There are plenty who have been left bruised by May’s decade and a half at the top of the Conservative party, but even her worst enemies concede that the woman who is to become the next Prime Minister has shown a remarkable durability in high office. She’s the longest-serving Home Secretary in half a century, and has made a success of what’s very often a career-ending job.

A long-retired party grandee recalls May, then newly elected to Parliament, approaching him in 1997 to ask what she must do to succeed. ‘Ignore the little things,’ he replied. It’s advice that her critics reckon she has firmly ignored ever since. When he resigned as a Home Office minister, the eccentric Liberal Democrat Norman Baker described trying to work under May as ‘walking through mud’. There are Conservatives, too, including ones in the cabinet, who accuse May of being a territorial micromanager. But the wrath of her colleagues has only increased her standing with grassroots Tories.

‘She’s a boxer,’ says a Home Office mandarin. ‘She’s got her gloves up all the time. Not much gets through. Always defensive.’ ‘Any special adviser in Whitehall who didn’t make it their business to know exactly what is going on in their department is negligent,’ contends Nick Timothy, a long-term aide and friend. ‘She wants to know what’s going on and wants to have a handle on things.’

[…]

‘As long as I have known her she has always refused to allow herself to be pigeonholed by saying she is in this club or that club or on this wing or that wing of the party,’ says Timothy. ‘It confounds some people, it especially confounds the Left, that you can be so sceptical about the European Court of Human Rights, but you can care so passionately about the rights of the citizen. It confounds them that she thinks immigration needs to be much lower, at the same time as introducing the first legislation of its kind on modern slavery. I don’t think that’s inconsistent, I think that she’s a sound conservative who believes in social justice.’

This is one of the secrets of May’s success. While she may be a defensive boxer with her gloves up, her feet are also moving incredibly quickly. That lack of pinpointing makes it very hard to define her, and thus attack her, though some will always try. ‘We will never ever forget the nasty party comment,’ says one prominent right-winger. ‘No matter how many terrorists she sends back or tough-sounding speeches she gives. She gave a name to our branding problem and it will be hung around our neck for decades by our enemies. It has damaged us as much as the misquoted “no such thing as society”.’ But while she may not be of the traditional right, there is certainly something very traditional about May as a person and as a politician. ‘If you say you are going to do a dinner, you can’t cancel it. She gets enormously annoyed if it looks like she might have to cancel something which has been a commitment she has given,’ says Cunningham. ‘I wouldn’t go as far as old-fashioned, but just a very traditional — do the right thing, you can’t let people down.’ ‘Strong sense of a proper way of doing things,’ echoes a friend.

July 16, 2016

Did the coup against Erdoğan fail (or was it intended to fail all along)?

Filed under: Europe, Government — Tags: , , , — Nicholas @ 13:39

Michael van der Galien on the coup attempt against Turkish president Erdoğan:

It’s a done deal: the military coup has failed. President Recep Tayyip Erdoğan and his AK Parti remain in power and vow to take revenge against those behind the coup.

Or, perhaps better said: against those they say are behind it.

Now that the coup has clearly failed, we can conclude that this must have been the most incompetent attempted takeover in Turkey’s troubled history. When part of the military launched their offensive last night (Turkish time), I immediately checked news channels supporting President Erdoğan. Surprisingly, none of them were taken over. The only broadcaster that was taken over was TRT Haber, the state news channel. But NTV and other channels supporting Erdoğan were left alone.

That was remarkable, but what struck me even more was the fact that these channels — especially NTV — were able to talk to the president and the prime minister. That’s strange, to put it mildly. Normally, when the military stages a coup, the civilian rulers are among the first to be arrested. After all, as long as the country’s civilian leadership are free, they can tell forces supportive of them what to do… and they can even tell the people to rise up against the coup.

And that’s exactly what happened. Both Prime Minister Binali Yildirim and President Recep Tayyip Erdoğan called into news programs and told their supporters to go out on the streets and fight back against the soldiers. A short while later, streets in the big cities (Ankara and Izmir) were flooded with Erdoğan supporters, who even climbed on top of tanks. Fast forward a few hours and it was officially announced that the coup had failed, and that Erdoğan and his AK Party remained in power. About 1500 soldiers were arrested.

As I wrote on Twitter yesterday, there were three options:

  1. The coup was staged by a small group within the military, which would severely limit their ability to strike.
  2. The coup was staged by the entire military, which meant Erdoğan’s chances of surviving politically were extremely small.
  3. The coup was a set-up. Think the Reichstag fire.

The main argument against option number three is that there was some very serious fighting taking place, including massive explosions. Dozens of people have been killed. If this was a fake coup, it probably was the bloodiest one ever. That’s why many people are skeptical about this option, and believe it was just an incompetent attempt at a military takeover.

July 8, 2016

QotD: The rule of the faceless bureaucracy

Filed under: Britain, Bureaucracy, Europe, Government, Quotations — Tags: , — Nicholas @ 01:00

I saw this firsthand as a senior advisor to Prime Minister David Cameron. After just a few weeks in office, I was struck by how many things the European government was doing that the prime minister and his team didn’t just not know about, but would have actively opposed. Every few days, the civil service circulated a pile of paperwork about a foot high, proposing regulatory or administrative government action.

In time-honored fashion, the process was stacked in the bureaucrats’ favor: proposals would be implemented unless elected officials objected within two days. I wanted to know where these “requests for policy clearance,” as the EU directives were known, originated. More importantly, I wanted to know the extent of their effects on the lives of British people. So I requested a detailed audit. I discovered that some 30 percent of the British government’s actions came as a result of the actions British people elected us to undertake. The rest were generated and mandated by the civil service machine, the majority coming from the EU.

These directives determined everything from employment law to family policy, all through distant, centralized processes that UK citizens barely understood, let alone controlled. To this day, British officials spend much of their time in the EU’s administrative capital, Brussels, trying — mostly in vain — to block policies they don’t want and which no one in Britain voted for, all of it wasting inordinate amounts of time, energy, and money.

Steve Hilton, “Here’s Why Britain Should Leave The European Union Today”, The Federalist, 2016-06-23.

July 5, 2016

QotD: A government reform proposal

Filed under: Government, Humour, Law, Quotations, USA — Tags: , — Nicholas @ 01:00

I propose that it shall be no longer malum in se for a citizen to pummel, cowhide, kick, gouge, cut, wound, bruise, maim, burn, club, bastinado, flay, or even lynch a [government] jobholder, and that it shall be malum prohibitum only to the extent that the punishment exceeds the jobholder’s deserts. The amount of this excess, if any, may be determined very conveniently by a petit jury, as other questions of guilt are now determined. The flogged judge, or Congressman, or other jobholder, on being discharged from hospital — or his chief heir, in case he has perished — goes before a grand jury and makes a complaint, and, if a true bill is found, a petit jury is empaneled and all the evidence is put before it. If it decides that the jobholder deserves the punishment inflicted upon him, the citizen who inflicted it is acquitted with honor. If, on the contrary, it decides that this punishment was excessive, then the citizen is adjudged guilty of assault, mayhem, murder, or whatever it is, in a degree apportioned to the difference between what the jobholder deserved and what he got, and punishment for that excess follows in the usual course.

H.L. Mencken, “The Malevolent Jobholder”, The American Mercury, 1924-06.

July 1, 2016

Is the end in sight for California’s high speed rail fiasco?

Filed under: Economics, Government, Railways, USA — Tags: , — Nicholas @ 03:00

Virginia Postrel says the state’s high speed rail boondoggle may finally run out of chances:

California’s high-speed rail project increasingly looks like an expensive social science experiment to test just how long interest groups can keep money flowing to a doomed endeavor before elected officials finally decide to cancel it. What combination of sweet-sounding scenarios, streamlined mockups, ever-changing and mind-numbing technical detail, and audacious spin will keep the dream alive?

Sold to the public in 2008 as a visionary plan to whisk riders along at 220 miles an hour, making the trip from San Francisco to Los Angeles in a little over two and a half hours, the project promised to attract most of the necessary billions from private investors, to operate without ongoing subsidies and to charge fares low enough to make it competitive with cheap flights. With those assurances, 53.7 percent of voters said yes to a $9.95 billion bond referendum to get the project started. But the assurances were at best wishful thinking, at worst an elaborate con.

The total construction cost estimate has now more than doubled to $68 billion from the original $33 billion, despite trims in the routes planned. The first, easiest-to-build, segment of the system — the “train to nowhere” through a relatively empty stretch of the Central Valley — is running at least four years behind schedule and still hasn’t acquired all the needed land. Predicted ticket prices to travel from LA to the Bay have shot from $50 to more than $80. State funding is running short. Last month’s cap-and-trade auction for greenhouse gases, expected to provide $150 million for the train, yielded a mere $2.5 million. And no investors are lining up to fill the $43 billion construction-budget gap.

June 27, 2016

The twisted incentive system for government bureaucrats

Filed under: Bureaucracy, Business, Government — Tags: — Nicholas @ 02:00

At Coyote Blog, Warren Meyer explains why bureaucrats so often make what appear to be incomprehensible decisions and then double-down on the decision despite any irrational, economically destructive, or humanitarian consequences:

I want to take an aside here on incentives. It is almost NEVER the case that an organization has no incentives or performance metrics. Yes, it is frequently the case that they may not have clear written formal metrics and evaluations and incentives. But every organization has informal, unwritten incentives. Sometimes, even when there are written evaluation procedures, these informal incentives dominate.

Within government agencies, I think these informal incentives are what matter. Here are a few of them:

  1. Don’t ever get caught having not completed some important form or process step or having done some bureaucratic function incorrectly.
  2. Don’t ever get caught not knowing something you are supposed to know in your job.
  3. Don’t ever say yes to something (a project, a permit, a program, whatever) that later generates controversy, especially if this controversy gets the attention of your boss’s boss.
  4. Don’t ever admit a mistake or weakness of any sort to someone outside the organization.
  5. Don’t ever do or support anything that would cause the agency’s or department’s budget to be cut or headcount to be reduced.

You ever wonder why government agencies say no to everything and make it impossible to do new things? Its not necessarily ideology, it’s their incentives. They get little or no credit for approving something that works out well, but the walls come crashing down on them if they approve something that generates controversy.

So consider the situation of the young twenty-something woman across the desk from me at, say, the US Forest Service. She is probably reasonably bright, but has had absolutely no relevant training from the agency, because a bureaucracy will always prefer to allocate funds so that it has 50 untrained people rather than 40 well-trained people (maintaining headcount size will generally be prioritized over how well the organization performs on its mission). So here is a young person with no training, who is probably completely out of her element because she studied forestry or environment science and desperately wanted to count wolves but now finds herself dumped into a job dealing with contracts for recreation and having to work with — for God sakes — for-profit companies like mine.

One program she has to manage is a moderately technical process for my paying my concession fees in-kind with maintenance services. She has no idea how to do this. So she takes her best guess from materials she has, but that guess is wrong. But she then sticks to that answer and proceeds to defend it like its the Alamo. I know the process backwards and forwards, have run national training sessions on it, have literally hundreds of contract-years of experience on it, but she refuses to acknowledge any suggestion I make that she may be wrong. I coined the term years ago “arrogant ignorance” for this behavior, and I see it all the time.

But on deeper reflection, while it appears to be arrogance, what else could she do given her incentives? She can’t admit she doesn’t know or wasn’t trained (see #2 and #4 above). She can’t acknowledge that I might be able to help her (#4). Having given an answer, she can’t change it (#1).

QotD: The dangers of expanding the government’s power

Filed under: Government, Law, Liberty, Quotations, USA — Tags: , — Nicholas @ 01:00

Urging vague and unconstrained government power is not how responsible citizens of a free society ought to act. It’s a bad habit and it’s dangerous and irresponsible to promote it.

This is not an abstract or hypothetical point. We live in a country in which arbitrary power is routinely abused, usually to the detriment of the least powerful and the most abused among us. We live in a country in which we have been panicked into giving the government more and more power to protect us from harm, and that power is most often not used for the things we were told, but to solidify and expand previously existing government power. We live in a country where the government uses the power we’ve already given it as a rationale for giving it more: “how can we not ban x when we’ve already banned y?” We live in a country where vague laws are used arbitrarily and capriciously.

Ken White, “In Support Of A Total Ban on Civilians Owning Firearms”, Popehat, 2016-06-16.

June 26, 2016

The Micklethwait Alpha

Filed under: Business, Government, Liberty — Tags: , — Nicholas @ 02:00

Published on 3 Feb 2013

Brian Micklethwait describes a hypothesis of his regarding the overall effects of state intervention as compared to market liberalisations.

This topic is discussed in greater depth here: http://libertarianhome.co.uk/2013/02/…

(Linked yesterday, but too good not to get its own posting.)

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