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Thursday, February 08, 2007

Socrates Discusses the Minimum Wage with a Congressman

He’s under So-Crates in the history books.

Socrates: So you want to raise the minimum wage. Why?

Congressman: Because as Sen. Ted Kennedy pointed out, minimum wage workers haven’t had a raise in 10 years.

Socrates: Can you name one single worker who was making $5.15 an hour a decade ago and who is still making $5.15 today? And if you can’t, then please tell me what caused their wage to rise if Congress didn’t do it. Come on, can you name just one?

Congressman: Well, no, but they must be out there somewhere. In any event, $5.15 just isn’t enough for anybody to live on. Workers must have more to meet their basic needs.

Socrates: An employer doesn’t have anything to pay an employee except what he first gets from paying customers. I wonder, whose “needs” do you consider when you decide to buy or not to buy — the workers’ or your own? Have you ever offered to pay more than the asking price just to help out the guy who made the product?

Congressman: That’s not a fair question. My intent here is purely to help.

...

Socrates: Then why on earth would you favor a law that says if a worker can’t find a job that pays at least $7.25 per hour, he’s not allowed to work?

Congressman: I’m not saying he can’t work! I’m saying he can’t be paid less than $7.25!

Socrates: I thought we were making progress, but perhaps not. Can you tell me, if your scheme becomes law, what happens to a worker who is worth only $6.00 because of his low skills, lack of education, scant experience or a low demand for the work itself? Will employers happily employ him anyway and take a $1.25 loss for every hour he’s on the job?

Read the whole thing.

Wasn’t Socrates a Blogger?

Comments

Avatar for Don Myers

Nice strawman

Don Myers on February 8, 2007 at 01:16 pm

You are so right! Raising the minimum wage is a nice strawman.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on February 8, 2007 at 01:36 pm

Ummm, whose ever suggested that an exact individual has been held at min.wage for 10 year?

Wages are determined by the value of the position, not the value of the person, so the position of scraping grease out of the oven has been the same, but the guy has probably moved on.

freerepublicans.com on February 8, 2007 at 02:12 pm

so the position of scraping grease out of the oven has been the same, but the guy has probably moved on.

That is in essence the point.  As people learn more job skills people move up.

The lefties have this vision that a person should stay at their job their whole life being content with COLA raises. 

That’s not the way to get ahead.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 03:14 pm
Avatar for Chris Brownell

"Strawman” = What a liberal says when they are unable to defend their ridiculous positions, or when they do not understand the content of the argument being made.

Also known as a cop out.

C.

Chris Brownell on February 8, 2007 at 03:19 pm

Right, but there is an argument to be made that if the value of the position does not continue to increase as the revenue of the business increases, there is no economic basis for the position anyways.

freerepublicans.com on February 8, 2007 at 03:19 pm

but there is an argument to be made that if the value of the position does not continue to increase as the revenue of the business increases,

Ah you’re assuming that the revenue of the business is going up or is going up as fast as other necessary imputs.

I’ll stay with your restaurant theme.  Suppose that in the last ten years that more restaurants have opened and that your food costs have gone up.  You might have less money to pay for that position.

What it comes down to is does that person who takes the job think the pays worth it to him?  Or can that person go out and get a better job?  No matter what you think that is what the job is worth.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 03:25 pm

Each job should be paid what it costs to automate.

Take dishwashing.  If the long term cost to buy and maintain a commercial diswashing machine is $6.00, then the value of the person who gets the same amount of work done, in a quality fashion is $6.00/hr.

But how many dishwashers out there make more than minimum?

freerepublicans.com on February 8, 2007 at 03:29 pm

Suppose it cost $500 an hour to wash those dishes freeloader.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 03:31 pm

Why would it cost that much?  You aren’t making sense.  Speak in real figures not ‘supposes.’

freerepublicans.com on February 8, 2007 at 03:35 pm

You’re the one to come up with absolutes freep.

Suppose I have a real fancy restaurant and I use fancy China that cannot be washed by a conventional dishwasher. 

However some guy on leave from NASA is willing to sell me one that will cost me in capital and maintenance $500/hour to run.

I can hire a real nice kid who’s going to school for $6.00 an hour.  I think this kid plans on being a Doctor, but he’s still in high school.

Now according to your theory I must pay him $500 an hour.  Not only is that somewhat more expensive for me it also removes any incentive for this kid to continue on with school.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 03:50 pm

Each job should be paid what it costs to automate.

0ver what period of time?

Speak in real figures not ‘supposes.’

Well, which is it free? Real figures or cost to automate?
When a business automates, they look at the ROI -return on investment. Depending on what it currently costs and what the automation costs, that number varies. If the ROI is too long, automation generally doesn’t occur.
After the ROI is reached, the cost of automation should be a mere fraction of what was paid before.
So, are you saying if the long term cost (say ten years) of automating a dishwasher is 50 cents an hour, that’s what a dishwasher should be paid?



A troll is someone who only wants to stir up trouble, not have an honest debate.  Some signs that a poster is a troll:
* Dodges questions from other posters * Refuses to give sources
* When one of its arguments is shown to be false, either ignores the proof or moves the goalposts.  Heh. (From the LGF faq)

Proof on February 8, 2007 at 03:50 pm

...why on earth would you favor a law that says if a worker can’t find a job that pays at least $7.25 per hour, he’s not allowed to work?

That’s a good question. Can any minimum wage supporter answer why you wouldn’t allow the worker to work?

freerepublicans.com said, Wages are determined by the value of the position...

Stop right there! You get it! Pull all of the bullshit pontificating and pompous assertions aside and just focus on those nine words.

likwidshoe on February 8, 2007 at 03:54 pm

Whistler,

Hogwash.  We aren’t talking about people who can become doctors, we are talking about people who are not presentable enough to deal with the general public. 

When it comes down to it, min.wage jobs are for those who should not deal with the public in any way shape or form. 

We aren’t talking about $500/hr jobs, we aren’t talking about people that are raising a family.

We are talking about college kids that are trying to earn their own way just a little tiny bit and we as a society are telling them that we do not value their attempts to pull 20% of their weight.

Low wages are a disincentive for college kids to work.  Business don’t give a rats ass about that - nor should they.

If you don’t want college kids slacking off in government housing you need to give them the incentive to pull their own weight - because the unlimited government handouts sure don’t.

freerepublicans.com said, Wages are determined by the value of the position…

Stop right there! You get it! Pull all of the bullshit pontificating and pompous assertions aside and just focus on those nine words.

Yep.  And if the position is only worth $5.15/hr, maybe the business should eliminate that position since you all like to say it is not the role of a business to create jobs.

freerepublicans.com on February 8, 2007 at 04:07 pm

freerepublicans.com had said, Each job should be paid what it costs to automate.

At one time, nearly 90% of the workforce worked in the fields. Food was a bit more expensive in those days because of the labor costs. What you’re telling us is that we should pay the combine operator as if he was thousands of hands working out in the field reaping the grain the old fashioned way. What’s that going to cost?

See the stupidity of this approach yet?

likwidshoe on February 8, 2007 at 04:08 pm

free"republicans".com said, And if the position is only worth $5.15/hr, maybe the business should eliminate that position since you all like to say it is not the role of a business to create jobs.

What? You’re all over the place.

I told you that you should have stopped. You made a lot of sense in those nine words. Everything else after that....it’s just sad.

likwidshoe on February 8, 2007 at 04:10 pm

freeloader you’re absolutely pathetic.  Are you seriously telling me that no doctor’s worked for the minimum wage when they were attending high school?

If the job is only worth $5.15 and they can’t hire anyone to take the job, then they should figure out how to eliminate it.

But if there’s someone there wants that job then eliminating it hurts the entry level worker.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 04:11 pm

we aren’t talking about people that are raising a family.

And that’s absolutely wrong too.  Nearly all people making the minimum wage are doing so at part time jobs as a secondary income source for the family.  You’ve bought Kennedy’s lies hook line and sinker haven’t you?


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 04:12 pm

Whistler,

I never said that.

freerepublicans.com on February 8, 2007 at 04:12 pm

we aren’t talking about people that are raising a family.

And that’s absolutely wrong too.  Nearly all people making the minimum wage are doing so at part time jobs as a secondary income source for the family.  You’ve bought Kennedy’s lies hook line and sinker haven’t you?

I said we AREN’T talking about people raising families.  Read closer.

freerepublicans.com on February 8, 2007 at 04:13 pm

Whistler,

I never said that.

Yeah right.

Hogwash.  We aren’t talking about people who can become doctors,

World’s shortest memory.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 04:14 pm

I said we AREN’T talking about people raising families.  Read closer.

Ok I’ll give you that one.  Why do you want to make it hard for college students to find a job?


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 04:16 pm

Each job should be paid what it costs to automate.--FreeRepublicans.com

Well, since my job is (currently?) impossible to automate, since I am an electrical/electronics engineer, my hourly rate should be infinite (but since I am not that greedy, I’ll be happy to accept that rate yearly instead of hourly).

Wages are determined by the value of the position--FreeRepublicans.com

Not exactly. That definition, and the suggestion above, sounds a lot like Marx’s Labor Theory of Value. (A lot of what FreeRepublicans says sounds Marxist to me.) The wages are determined by the abilities of the negotiators, both seller and the buyer of the labor. Just like any other market. A buyer and a seller can look elsewhere if they think they can get a better deal.

Better qualifications, governmental policy, and unions are some ways that may allow a worker to negotiate a better deal. Establishing a cartel, becoming a regional monopoly/duopoly/oligopoly, union busting, propaganda spread by privately owned media, and governmental policy can help employers negotiate a better deal.


“All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.”
“Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac.” —George Orwell

Anarchist Vegetarian on February 8, 2007 at 05:01 pm

That definition, and the suggestion above, sounds a lot like Marx’s Labor Theory of Value. (A lot of what FreeRepublicans says sounds Marxist to me.)

Well AV, I don’t agree with you often, but in this case freep has brought us closer together.

Your last paragraph may be true but I need to add that while some people may be helped others will be hurt.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 05:04 pm

And since the GDP/capita is about $44,000 , and a job paying $7.25/hour full-time is only $15,080/year, I would guess that this new minimum wage isn’t going to destroy the economy. It will also increase the bargaining power of workers (a good thing considering that they are the majority), and will increase aggregate consumer demand, possibly creating more jobs and economic growth.


“All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.”
“Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac.” —George Orwell

Anarchist Vegetarian on February 8, 2007 at 05:06 pm

I guess I can’t agree with that.  How is reducing entry level jobs going to create jobs?  How is paying more for something than it would otherwise be worth (inflation) going to increase jobs.

You’ve got a huge disconnect there.

That giant sucking sound are jobs leaving the US to go to China.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 8, 2007 at 05:08 pm

Anarchist Vegetarian said, Not exactly. That definition, and the suggestion above, sounds a lot like Marx’s Labor Theory of Value. (A lot of what FreeRepublicans says sounds Marxist to me.) The wages are determined by the abilities of the negotiators, both seller and the buyer of the labor.

Hence, the value of the position.

It will also increase the bargaining power of workers (a good thing considering that they are the majority), and will increase aggregate consumer demand, possibly creating more jobs and economic growth.

Bargaining power of what? Those jobs are disappearing. Need I bring up General Motors yet again? Raise the minimum wage and you put that final nail in their coffin, barring a government bailout (which will probably happen to some degree and doesn’t help your case of not hurting the economy).

likwidshoe on February 8, 2007 at 05:21 pm

That giant sucking sound are jobs leaving the US to go to China.--The Whistler

Maybe. For a closed economy, what I said is probably true. Maybe not with an open economy.

The Great Depression was exacerbated by job layoffs. At the time, mainstream economists were confident in predicting that as wage rates fell, it would become advantageous to hire workers again. But aggregate demand was falling faster than the wage rates. Companies didn’t want to investment in capital, workers had no money to buy goods and services, and the depression spiraled downwards. John Maynard Keynes predicted that for employment to increase, aggregate demand (total consumer demand, capital investment, and government spending combined) would have to increase, so that companies would start producing again, since they would now be able to sell their goods and services. This seems counter-intuitive, but it has been backed up by experiences then, and since.

And about out-sourcing, some jobs simply cannot be out-sourced, like dish-washing. The US has more (and more advanced) industrial capital than China, so these jobs won’t be out-sourced either if they yield sufficiently higher productivity. But manufacturing jobs in labor warehouses, like assembling shoes, probably should have been out-sourced long ago since US labor rates cannot compete with the third world.


“All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.”
“Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac.” —George Orwell

Anarchist Vegetarian on February 8, 2007 at 05:23 pm

John Maynard Keynes predicted that for employment to increase, aggregate demand (total consumer demand, capital investment, and government spending combined) would have to increase, so that companies would start producing again, since they would now be able to sell their goods and services. This seems counter-intuitive, but it has been backed up by experiences then, and since.

Keynesian economics prolonged the depression. It’s counter-intuitive and it doesn’t work. Not to mention that we are paying for his economy hurting schemes decades later.

likwidshoe on February 8, 2007 at 05:36 pm

In the end, you minimum wage supporters are telling people that they can’t work. You’re poking your nose in where it doesn’t belong. What business is it of yours if I want to work or hire someone at below what you deem appropriate? If we’re both adults, it’s none of your concern.

Many of you would do well to just mind your own business. Isn’t your life complicated enough?

likwidshoe on February 8, 2007 at 05:41 pm

Keynesian economics prolonged the depression. It’s counter-intuitive and it doesn’t work. Not to mention that we are paying for his economy hurting schemes decades later.--Likwidshoe

Funny you should say that.

The massive rearmament policies to counter the threat from Nazi Germany helped stimulate the economies of many countries around the world. By 1937, unemployment in Britain had fallen to 1.5 million. The mobilization of manpower following the outbreak of war in 1939 finally ended unemployment.--Wikipedia

That is some pretty strong evidence for Keynesian Economics. It turns out that government expenditure, and capital investment, has a multiplicative effect on aggregate demand.

I don’t know why so many on the far-right write-off Keynesian Economics. Look at Scandinavia up until 1975 especially, and to a lesser extent after that. They were model Keyesianists, and had very strong economic growth. The main reason I suspect the right doesn’t like Keynesian Economics is that it allows for things like `wage-led growth’, which makes it their idealogical enemy.


“All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.”
“Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac.” —George Orwell

Anarchist Vegetarian on February 8, 2007 at 05:48 pm

Many of you would do well to just mind your own business. Isn’t your life complicated enough?--Likwidshoe

I am not a huge fan of government regulation, or anything else that reduces ones liberty, but it doesn’t mean I won’t analyze the results. If there is going to be govt. regulation, it might as well be less harmful, vs. more harmful regulation.


“All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.”
“Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac.” —George Orwell

Anarchist Vegetarian on February 8, 2007 at 05:53 pm

ALERT ALERT! I think we may have found the Marxist r108 is looking for! This:

Each job should be paid what it costs to automate.

is straight out of Marx. Almost word for word.

Get rid of the minimum wage. Kids shovel the driveway for a buck. What injustice! Lib elite states are expensive. Shit shoveling in Wyoming shouldn’t have the same wage as NYC.

That giant sucking sound are jobs leaving the US to go to China.

or
That giant sucking sound are Americans leaving the US to go to Bangkok and get cheap ‘jobs’. Seriously though Whistler, those jobs in the US pay better, they make nicer shit, and people pay a bit more for something nice and durable that’s made in the US than they do for crap from China. China has the buttons cornered though. Those go on everything! ITS A FUCKING COMMIE CONSPIRACY! Support your patriot button maker! Don’t wear the commie buttons! They sew em on shitty and give all the extras along the inside of the shirt just to move more and so you can have commie buttons rubbing on your free American flesh, slowly breaking you down. This is all being perpetrated in a contrived way by the commies and the demos together - its obvious and the MSM is doing nothing, aiding their fellow pinkers. Bomb Red China! Liberate the buttons!


rasberry

Sparkie Arbuckle on February 8, 2007 at 05:55 pm

LoL.

Now I’m a marxist again.

Always a good time.

freerepublicans.com on February 8, 2007 at 06:17 pm

That is some pretty strong evidence for Keynesian Economics. It turns out that government expenditure, and capital investment, has a multiplicative effect on aggregate demand.

AV,

This is hardly the example you’d like to think it is.  A national rearmament program in preparation for war involves only a modest return economically on government funds expended as all final product winds up in government (military) inventories and not part of the overall civilian economy.  Furthermore, I believe you’ll find that at the same time as government purchases of military hardware and supplies were dramatically increased, the civilian workforce was decreasing due to military recruitment and eventually conscription, which in turn exaggerates the apparent effect of the military purchases on the civilian economy.

Finally, there is the question of a diminished market of goods and services among the civilian economy as more and more capital, production capacity, labor, and raw materials are appropriated for the war effort.

To be sure, a war effort such as that of Britain, and later the US, in WWII, is ultimately a matter of survival, but when all factors are taken into account, it’s hardly proper to treat that effort as an economic boom.  One need only look at the economic history of the USSR to see that the long term effect of ever-increasing military expenditure beyond the growing capacity of the overall economy to handle such appropriation can be catastrophic.


“Poverty of goods is easily cured; poverty of the mind is irreparable.”

Bat One on February 8, 2007 at 07:31 pm

Bat One: I agree that military expenditure isn’t the ideal way to boost an economy. But if there is a labor surplus, and potential production capacity is greater than current production capacity, then government spending, even on military equipment, increases aggregate demand, boosting production, and due to the multiplicative effect of government expenditure, therefore GDP. Obviously if the government accrues too much debt due to such action (like Britain), the interest payments can be crippling. But if the GDP grows fast enough, government debt isn’t much of an issue.

And the economic growth I was talking about doesn’t mean that there will be more shiny trinkets for the masses, but simply an increase in GDP, and employment too. At it’s peak in WWII the US military had 15 million personnel? This caused large numbers of women to enter the workforce which also increased GDP.


“All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.”
“Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac.” —George Orwell

Anarchist Vegetarian on February 8, 2007 at 07:52 pm

Thanks, Bravo1, I was in the process of writing up that exact point when your comment hit my email.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on February 8, 2007 at 08:00 pm

2H9,

Sorry!  I did not intend to steal your thunder.

Of course the same point we were making about the Soviet economy, could just as easily apply to Hitler’s national economic program in pre-war Germany.  But those on the Left are less attentive when the similarities between Russian Soviet Socialism and Hitler’s National Socialism are pointed out to them.

Reality-based, my ass!


“Poverty of goods is easily cured; poverty of the mind is irreparable.”

Bat One on February 8, 2007 at 08:45 pm

That is totally cool! You said it better than I would have. Facist Italy is another, though much less successful, example. Imperial Japan was not quite the same category of economy. And then there is China. A horse of an entirely different hue.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on February 8, 2007 at 08:56 pm

And lets us not forget Brazil and South Africa, both hybrids and fairly successful.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on February 8, 2007 at 08:59 pm

Right, but there is an argument to be made that if the value of the position does not continue to increase as the revenue of the business increases, there is no economic basis for the position anyways.

This is economic nonsense.  It is much more likely that the grease-scraping job is a smaller part of the operation than it was ten years ago; as a matter of fact, it is likely that it has been eliminated through mechanization, like machinery that cleans itself, and no longer requires human labor to do the job.


If you don’t know by now, don’t mess with it.

robert108 on February 8, 2007 at 10:20 pm

Now I’m a marxist again.

Well freeloader, it sounds like you’ve come up with all of your own economic theories sitting around in your apartment eating Raman Noodles.

Marx on the other hand came up with his economic theories sitting in his apartment eating 1850’s equivalent of Raman noodles.

Now the important thing here isn’t the Raman noodles but the apartment.  Sitting around in your apartment and making up ways the worlds supposed to work for you makes you come up with goofy theories.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on February 9, 2007 at 05:34 am

I find it interesting that the evil empire Walmart supports raising the minimum wage.  Why would that be?

Of course, we all realize that it’s because Walmart already pays above minimum wage, so it really doesn’t impact their costs.  Good old mom and pop, though, employ a couple of high school kids after school.  Those kids are now getting a 40% raise (do the math.) The labor costs of mom and pop just jumped up.  They now have a limited set of choices:

1.  Raise prices.  Walmart would love this.  Their price are already lower, so this will drive a wedge between mom and pop’s loyal customers and the store. Some people will decide that the better service doesn’t offet the higher prices.  Less sales of higher priced items could mean flat gross sales.  With increased labor costs, that drives profits down.

2.  Cut back on staff.  Mom and pop could cut back on how many students they employ or how many hours those students get.  However, fewer employees means that service will suffer.  With less service, some customers will decide that Walmart’s lower prices win out.  Flat prices with lower sales means gross receipts are down and, thus, lower profits.

3.  A combination of 1 and 2.  Mom and pop could raise prices and cut back on service.  Small changes in both might allow them to survive.  The hit on the bottom line might not be as drastic.

The first scenario is the least sustainable.  Once the cost of running the business becomes greater than the revenue it generates, it’s toast.  In both of the other scenarios, the business may stay afloat, but the employees take the brunt of the hit.

Now, can someone please tell me how any of the three scenarios is good for anyone excpet Walmart?


"Although I can accept talking scarecrows, lions and great wizards in emerald cities, I find it hard to believe there is no paperwork involved when your house lands on a witch.”
- Dave James

Steve L. on February 9, 2007 at 09:27 am
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