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Friends on Facebook are discussing “A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals” (Washington Post). Of course, like most things in the U.S. media, this starts off with a lie (the minimum wage in Seattle is $13/hour, not $15/hour). But let’s look at the rest of the article…

With labor more expensive, employers are getting rid of their lowest-skilled employees (certainly those for whom the market wage would be less than the minimum legal wage). Okay, that’s Econ 101. But is it “bad news for liberals”?

Suppose that the goal of a liberal is to live in a city without too many unsightly low-skilled people (see Tyler Cowen explains why rich white Democrats freely express love for immigrants and people of color for how liberals already have segregated themselves away from dark-skinned Americans and immigrants).

Can the liberal make it illegal for anyone without a college degree to live in his or her city? Probably not. Can the liberal make it illegal for anyone without a college degree to work in his or her city? Sure! That’s the minimum wage.

With a minimum wage much higher than other parts of the U.S., a city can limit its residents to (1) folks with high-paying jobs or pensions, (2) Official Poor who are already established in public housing and other welfare systems (mostly funded by state and federal taxpayers), and (3) divorce or custody plaintiffs who collected a free house, child support, and/or alimony through the family law system.

Low-skilled immigrants don’t fit into any of these categories. By definition they can’t have high-paying jobs (since they are “low-skill”). They would have to survive in the city for 5-10 years on a waiting list before they get their free apartment and they don’t have sufficient family connections to do this. Immigrants are unaware that having sex with a high-income American will yield the spending power of a medium-to-upper-income American and/or they have religious or social scruples that prevent them from having sex with an already-married dermatologist.

What do readers think? Instead of building a wall or aggressively preventing 8 low-wage people from sharing a 2-bedroom apartment, a city simply puts in a high minimum wage. With no jobs available for undesirable/Deplorable people, the city is left with the sought-after “creative class” plus some folks on Welfare who vote for Democrats and make the city wealthier by pulling in Federal Medicaid, food stamp, and housing dollars. If you’re a Democrat on the city council or in the mayor’s office, what’s not to like about that outcome?

Related:

• Can Puerto Rico be a laboratory for the future of the rest of the U.S.? (Puerto Rico already has the equivalent of a $15/hour minimum wage)

Update: A Facebooker commented on the above with “To illustrate that point, Singapore enforces a minimum wage on immigrant labor, but not on its own citizens. Does anybody believe a government would pass a law to treat foreigners worse than its own citizens?” (this post from a law firm suggests that it the minimum wage is about $2,660 per month)

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MIT’s way of reminding the Class of 1982 (average age: 57) that we are going to be dying soon was to schedule Nobel-winning economist Peter Diamond to speak on the subject of Social Security at our reunion dinner.

Why should running a retirement system be challenging? Why not take citizens’ money, save it for them, and give it back to them, plus interest, when they’re old? Singapore does this:

In contrast to the majority of other publicly managed pension schemes, the Singaporean system operates on a fully funded basis. The CPF does not include social risk pooling and redistributive elements. Individuals rely exclusively on defined contribution funds accumulating in individual accounts. The CPF covers private and most public sector employees as well as the self-employed, who may join on a voluntary basis.

This kind of system is bulletproof.

FDR and his fellow politicians in the 1930s couldn’t do this, however, because in order to get votes they wanted to start ladling out the cash immediately, to people who had put next to nothing in. So we tax currently working Americans to pay currently retired Americans. (Essentially everyone born prior to 1940 got more than they put in.) This is sustainable only with either a growing population or a growing labor force participation rate. Despite spreading out the welcome mat for immigrants, our population isn’t growing fast enough to offset increased longevity. Our labor force participation rate is falling as Americans discover the wonders of SSDI and OxyContin and/or collecting child support or alimony. Thus Social Security is always at risk of crisis.

Sometimes the roots of the crisis are easy to understand. Professor Diamond explained that in 1972, for example, Congress approved an inflation indexing scheme for Social Security that the experts in the Nixon Administration knew would “over-index” payments such that recipients would actually be better off in a high-inflation scenario. At least some senators knew this as well. Congress cheerfully passed the scheme into law because everyone knew that the U.S. would never have high inflation rates. By 1977 the system hit a wall and another emergency fix was required in 1983. (Our next scheduled emergency is in 2034 (source), when the trust fund is forecast to run dry and benefits will exceed contributions.)

Why does it matter? There is no law against Americans saving for their own retirement. However, most Americans spend like drug dealers. Presumably part of this is our nature, but we have a lot of structural discouragements to savings. Married with kids? Save and you’ll be punished by colleges in the financial aid process. Getting paid child support or alimony? Savings could be used against you in court; if you’re able to save maybe you don’t need child support and alimony (amounts always discretionary with the judge) at the current levels. Income below the median? Savings could disqualify you from various means-tested welfare programs, such as free or subsidized housing. Want to save up and buy a house? You will just be cheating yourself out of the mortgage interest deduction.

The result is “Among elderly Social Security beneficiaries, 48% of married couples and 71% of unmarried persons receive 50% or more of their income from Social Security.” (source) I.e., a lot of older Americans don’t have significant savings.

Professor Diamond laid out the history of political arguments about how to patch the actuarial holes in the system. He said that, to a first approximation, Democrats always propose higher taxes and Republicans always propose cutting benefits, except on the poorest recipients, for whom Republicans would like to see higher payments. He explained that politicians are never candid (not to suggest that they might lie!) regarding these proposals, e.g., disguising a benefit cut as a delayed cost-of-living increase or an increase in retirement age.

As with most other government programs, it gets sold to the public as a way of taking money from the fortunate to help the unfortunate. Social Security is advertised as “progressive” because people who had a low income get a larger percentage of their contributions back than high-income participants. In fact, this is undone because high-income participants tend to live longer and high-income participants are more likely to have a nonworking spouse who gets a kicker “spousal benefit” (if Nadine Nevermarried and Meredith Married put in the same amount over the same number of years, but Meredith was super attractive and had a boytoy husband at home, Meredith’s household gets about 1.5X the payments from Social Security). On average, Social Security doesn’t do anything to address the income inequality that has come to obsess at least some Americans.

The latest magic for plugging the most obvious holes? Democrats want higher rates on everyone and a special tax on earnings about $400,000 (soak the 1%!). What if the 1% get motivated and, like Eisenhower, manage to convert what would have been regular income into capital gains? That won’t help them because Democrats also want to tax investment income to feed Social Security. Republicans are opposed to these higher taxes, but they can’t just go on TV and shock Americans with “you have to work if you want money.” Diamond said that the likely fix is that Congress will change the law so that Social Security can borrow, like the rest of the Federal Government. If Social Security borrows approximately 100 percent of GDP, the system can keep working for about 75 more years (assuming that there are no advances in medical technology that increase longevity, for example, nor any further withdrawals by Americans from the labor force).

Borrowing doesn’t seem like the obvious solution to a long-term systemic problem of overspending. Are we going to be way richer than forecast in the future somehow? Have fewer old people around? Nobody seems to think so. However, in Diamond’s opinion, borrowing is the one option that will be palatable to both Democrats and Republicans (and certainly the two parties have cooperated to borrow more than 100 percent of GDP already).

Related:

• Pensions: How states and local governments indulge in deficit-spending (from 2009)

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Professor William Fabricius of Arizona State University spoke at the International Conference on Shared Parenting 2017 about two of his latest studies.

The first study presented was on infant overnights. Fabricius and his co-author started by asking college students about their relationships with parents. They found a cohort whose parents had divorced when they were aged 0-3 (there are a lot of these because cash-motivated plaintiffs file suits when the youngest child is 2 and can be easily parked in commercial care).

Unlike with a lot of American studies, they kept the time with the father as a continuous variable rather than dividing into sole care/shared care at a 35 percent threshold.

Results:

• overnights at age 2 positively correlate with the father-child relationship in college
• there is no way to make up for a lack of infant/toddler overnights with more father-child contact later; once a child and the father grow apart they stay apart (on average)
• the father-child relationship in college kept improving as a function of overnights with the father, with the maximum quality achieved at 50/50
• the best-adjusted college students had had, as toddlers, a 50/50 schedule with their divorced parents
• the mother-child relationship actually improved in going from 0/14 overnights to 2/14 overnights with the father, but after that it was constant (though no decrease in mother-child relationship quality from a 50/50 shared parenting arrangement)

Judges cite “conflict” as a reason for denying fathers’ requests for shared parenting (see, e.g., Massachusetts). Fabricius and co-author found that “when the parents disagree, it is actually more important to have a 50/50 schedule in order to maintain the father-child relationship.” No matter what the level of conflict, the more overnights with the father the better-adjusted the child turned out to be. (An attorney sitting next to me whispered, “This is interesting, but someone should tell him that judges don’t care about how well-adjusted children turn out to be. They can order dad to pay mom and the question is how much.”)

Fabricius then presented a study of 83 adolescents, half of whom had a parent relocate so that there was a 4-5 hour separation (average) between the parents. The children lived primarily with a mother and stepfather. Relocation degraded the quality of the child’s relationship with all three “parents” (mom, dad, stepdad; either the discarded fathers hadn’t managed to attract any women or the researchers didn’t consider an adult woman visited every other weekend to be significant enough to be labeled “parent”).

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Most of the speakers at the International Conference on Shared Parenting 2017 were primarily ivory tower researchers. Pamela Ludolph, on the other hand, had gone into courtrooms countless times as a forensic psychologist and custody evaluator (recommending a parenting time schedule to the judge; what some states called “Guardian ad litem”). Her talk was on how the theory translates into practice.

Ludolph, based at the University of Michigan, described how Attachment Theory, a product of the 1960s mostly from a British psychologist named John Bowlby, had become “the big weapon against fathers” in Americans nominally-gender-neutral courts. Mom is a “secure base” and children are in a “sensitive period” for the first 2-3 years of life. If anything is done to interfere with their attachment to Mom, there will be bad outcomes.

Ludolph noted that this was plainly misapplied because children of divorce tended to turn out badly even when they had a strong and secure attachment to their (generally plaintiff) mother. Pushing away the father, the typical result of a divorce lawsuit in most U.S. jurisdictions, is “a huge loss” to a child from which full recovery is unlikely.

In any case, it turns out that the attachment to mothers and fathers operates independently and, even when mothers spend 3-4X more time with babies, at 18 months they will protest separation equally from both parents.

Another way that children lose fathers when psychologists come into court is when the psychologist finds that exchanges between the parents causes “stress” (crying baby). Ludolph noted that “stress isn’t trauma” and “temporary stress is better than the loss of a father.” Ludolph notes that parents in intact families stress babies all the time, e.g., by taking them on vacation or dropping them at day care. She asked rhetorically, “Why should the standard for stress be different in family court?” The answer turns out to be that the standard is different. It is okay for a baby to be stressed to go on a Carnival cruise, but if switching to the father’s house is stressful, the father has to be cut.

What’s her perception of the reality for a father who gets sued these days in Michigan? “Mothers are so preferred as primary caregivers that judges are reluctant to pick the father even when the mother is psychotic or so depressed postpartum that that child could be killed.” The likely schedule result? “Short visits with the father that are stupid. It isn’t worth the driving time and hassle to spend two hours with a child.”

Related:

• our chapter on Michigan family law

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“I thought that because I was smart I should be rich,” noted one alum, still working 9-5 as a software developer. Especially when one factors in retirement/pension, it seems that not too many of the reunion attendees had earned more than a Massachusetts State Trooper or a California prison guard. Most of those who had out-earned an 80th-percentile public school teacher had gotten out of tech per se, e.g., to become doctors or work in financial services.

Electrical Engineering and Computer Science was the biggest department for the Class of 1982 and there were quite a few software engineers and some circuit designers at the reunion. The computer nerds agreed that, outside of Silicon Valley, one’s career was likely to be lame and irrelevant. Typing all day every day was apparently not a healthy lifestyle. Here are a classmate’s hands:

He didn’t earn enough to retire young. He spent three years teaching “maker skills” and found it rewarding, but it didn’t pay enough so he is back to the coding grind.

Heterosexuality was either the norm among our classmates or a condition of reunion attendance; I didn’t see anyone from 1982 with a same-sex adult companion (at an “all-classes” event with about 1000 attendees, I did see two young women holding hands). In our class of roughly 1,000 there doesn’t seem to be anyone who has changed gender ID. That may change with the next generation, however. Alumni from wealthy Boston suburbs reported neighbors having children who had changed gender IDs. One alum’s son (still!) is a 20-year-old liberal arts college student. The parents refer to “his girlfriend,” but in fact the individual is “non-gendered” and is offended if referred to with female pronouns.

Most of my classmates seem to have been married, at least at one point. This prospect filled some members of the Class of 1997 with horror. The 42-year-old never-married software engineers were fit, slender, cheerful, carefree, and could have passed for 30. One of them said “I’m being buzzed by Tinder right now.” What was wrong with marriage? “The women that I meet want to have kids, but the women I know with kids seem like total bitches and the stuff that upsets them is trivial. You go to a family’s house for dinner and the mom is obsessing over precisely what a 5-year-old is eating. I don’t remember a lot of 5-year-olds starving themselves to death. Why are these moms monitoring every bite?”

The prevalence of divorce tracked the research of Brinig and Allen pretty well. Classmates who’d lived in states where divorce was more lucrative, e.g., Massachusetts or California rather than Georgia or Texas, were more likely to have been sued by their spouses. Classmates who’d earned more money, e.g., by working in real estate or financial services, were more likely to have been sued than those who toiled as faceless cubicle-dwelling coders. The women who had been sued were the higher-earning spouse. For example, female physicians who survived 30 years of practice without a malpractice lawsuit had proved vulnerable to attack in family court. No-fault divorce for their plaintiffs was rephrased as “Would you like to discard your 55-year-old wife, take half of the money she saved from working as a medical specialist, take half of the money she’s going to earn going forward, and see if having sex with younger women is more exciting?”

Aviation was a field best suited to the patient. “My first job out of MIT was at Hughes Aircraft preparing a bid for the FAA on the NextGen Air Traffic Control System, which still hasn’t been implemented [35 years later],” said a tablemate at dinner. An aeronautical engineer, Class of 1960 (so he’s roughly 79), talked about starting his career working on a variant of the F-105 jet fighter and now finishing it as an FAA employee. Not that much has changed! [Thinking that you’ll work with newer technology in the U.S. military? A friend’s message: “I found out that [the Boeing 757 that becomes] Air Force Two’s nav databases have to be loaded by floppy with everything checked against some sort of huge spreadsheet to make sure they have the approaches and waypoints they need for wherever they’re going (they can only have a limited amount at any one time)”; it isn’t quite this bad in the civilian world because a Cessna 172 can have a $10,000 Garmin GPS with, if desired, an SD card containing a database covering every airport, airway, and waypoint on Planet Earth.]

One alum had worked for 30 years building trading software for big banks. What had he learned about the financial services business? “The only way to make money is by cheating the customer.”

Physical fitness seemed to be an important component of happiness for our group of mostly 57-year-olds. One guy works from home for a big integrated circuit manufacturer and his non-MIT girlfriend said that he worked 70-80-hours per week for 12 out of the preceding 18 months. She runs a fitness center (“I worked in corporate America for decades. I’m a lot happier now.”) and gets him out on the golf course regularly as well as into the gym. They both seemed to be doing great despite his lack of “work-life balance.”

Maintaining musical skills also seemed to be a good investment of time and energy. The Alumni Jazz Band (roughly our class’s age) performed at our brunch and they looked happy and sounded fantastic.

Understanding government and government regulation seemed to be the key to a lot of careers. One alum’s wife works for a “woman-owned small business” that perpetually keeps the headcount below 100 people. They are thus entitled to “sole source” federal contracts and don’t have to compete with other/larger companies. How do they get the work done on what might be huge contracts? “They subcontract everything to Booz-Allen. That’s how business is done in D.C.”

Readers: What did you learn at your latest college reunion?

Related:

• Life Lessons from Successful Pilots
• MIT alumni in their 50s

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“Investigators Believe USS Fitzgerald Crew Fought Flooding For An Hour Before Distress Call Reached Help” (U.S. Naval Institute News) contains an item related to some previous postings here:

In addition to the damage to the spaces, the collision knocked out Fitzgerald’s communications for the better part of an hour. At about the same time the crew was able to reactivate their backup Iridium satellite communications to radio for help,

This is the system that Bill Clinton-era Pentagon bureaucrats were unenthusiastic about using (they envisioned an official military contractor building them a more glorious one) and downright hostile to helping rescue from Motorola’s threats to de-orbit.

Iridium is apparently still useful, 18 years after going bankrupt.

The previous posts:

• Karl Marx was right: Iridium
• Resurrecting Iridium

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Kim Bastaits described research from Belgium at the International Conference on Shared Parenting 2017.

For custody and child support, Belgium was a standard (for Europe) “mom wins, but not too much cash” jurisdiction until 1995 when courts began favoring joint legal custody (“authority”). Mom couldn’t donate the child’s kidneys without Dad’s consent, for example. In 2006, legislation moved to gender neutrality and favoring 50/50 shared parenting. Did they abandon “best interests of the child”? No. Before 2006 the “best interests of the child” were “live with mom.” After 2006 the “best interests of the child” were “live 50/50 with mom and dad.”

Today roughly 27 percent of Belgian children of separated biological parents are in a 50/50 shared parenting arrangement, with the remainder primarily with their mothers.

Bastaits and her colleagues worked with 623 parent-child relationships, interviewing parents, the new partners of those parents, children, and grandparents. 221 of the relationships involved intact (nuclear) families. 138 were in what the researchers considered “shared parenting,” but it wasn’t the strict 50/50 criterion used by the Swedes. Anything from 35/65 to 65/35 was put into the “shared” bin (the difference between these two schedules in Illinois could be millions of dollars in cashflow!). There were 234 relationships measured for children who lived primarily with their mothers and just 30 for children who lived primarily with a father.

As in Scandinavia, the kids in intact families did the best and kids who were primarily with one parent did the worst. Also as in Scandinavia, the children with a shared parenting arrangement were closer to children of intact families (nobody at the conference would breach decorum and say “normal children” or “children in a normal family”!).

Bastaits and her colleagues looked for differences between “mostly with mom” and “mostly with dad.” In both types of situation, the child’s ability to communicate openly with the other parent was damaged as well as the ability of the other parent to control and support the child. Whichever parent had been reduced to a minority role provided less “emotional support.” Fathers who were primary parents provided more emotional support than mothers who were primary parents (consistent with what litigators interviewed for Real World Divorce told us; American single moms are not that interested in their children, according to their attorneys).

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A handful of presentations at the International Conference on Shared Parenting 2017 were on parental alienation. This is a challenging area to study because (1) some kids hate one or both parents even in intact families, (2) some kids may hate a parent because the parent has done something to them, and (3) some kids may hate Parent B because Parent A says bad things about Parent B.

In the family law context, psychologists collect fees to determine if Case #3 is occurring and the standard seems to be “I know it when I see it.” The waters are inherently muddy due to the fact that a parent who files a divorce lawsuit is generally doing something harmful to his or her children (see the Litigation chapter: “It a mistake to think of divorce lawsuits as being Parent 1 v. Parent 2,” was how one lawyer explained the typical situation. “In the cases where anyone has enough money to hire me, the parties who are opposed are the plaintiff parent and the children.”). The waters are further muddied by the fact that many states give child support plaintiffs (winner parents) a financial incentive to engender hatred of the defendant (loser) parent. If the child refuses to spend time with the loser parent and the parenting time split goes from 70/30 to 100/0, for example, the cash profitability of the child increases under many states’ child support guidelines.

The stories of children who haven’t seen one of their parents, a person who actually does love them, for years or decades, are sad. We actually have one of these guys in our suburban neighborhood. He doesn’t know whether his adult daughter is dead or alive because, decades ago, his plaintiff “just made it too difficult to see her.” He’s super gentle, so he probably would have been an important resource for the girl (now woman). Certainly he seems like a good father to his elementary-school-age child (though, unless he moves out of Massachusetts into one of the states with 50/50 shared parenting as a default, he is at risk of a repeat!).

Nonetheless, as a numbers person it is tough to know what to do with sentiment. A common outcome of an American divorce or custody lawsuit is that the child hasn’t seen the loser parent within the previous year (see the Children, Mothers, and Fathers chapter for how it might be roughly 2/3rds of children of divorce falling into this category). But how much of that is due to parental alienation? Nobody cares enough to gather data and it might be challenging to gather even if anyone did care.

Americans at the conference, mostly lawyers and psychologists, confirmed what the litigators we’d interviewed for Real World Divorce told us: most states’ family courts make it easy for a motivated plaintiff to go from being winner parent to being 100-percent parent. Where the conference attendees differed from the veteran litigators was on plaintiff motivation. The attendees simply denied the possibility of a financial motive for fomenting parental alienation. It was a psychological phenomenon and therefore the only remedies were bringing more and better psychologists into lawsuits.

I cited Brinig and Allen (see Causes of Divorce), who found that the possibility of being the winner parent increased the probability of a divorce lawsuit being filed and then, in a later paper, that the profitability of child support also influenced the probability of a plaintiff seeking to be divorced in the first place. How could parental alienation work in Nevada? I asked. With a 50/50 shared parenting guideline and child support capped at $13,000 per year, how could it be done and, more importantly, why would someone bother trying? Nobody was persuaded that changing the incentives would be more effective than bringing more psychologists into the courtroom. This was true even with a guy who’d actually lost a child (attending the conference to find remedies and sources for his situation). He was a Massachusetts resident who had been the loser in a winner-take-all divorce. He believed that his child was currently alienated from him due to actions taken by the plaintiff/winner parent. I couldn’t sell him on the idea that he might not even have been sued in the first place if he’d lived in Nevada, Arizona, or Pennsylvania, and that as a 50/50 parent in those states his plaintiff would have had a tougher time embarking on a program of parental alienation. As with most Americans at the conference, he wanted to see better-funded family courts (but we already spend more on family court matters than any other society in the history of humanity!), better personnel, and better procedures so that there would be more accurate outcomes after litigation.

The one thing I learned is that parental alienation allegations may be most commonly made by winner parents. How is that possible when the children are with the loser parent only every other weekend? Here’s how the process was explained to me: Plaintiffs typically sue when children are young; the winner parent gets accustomed to a compliant 5-year-old; the winner parent loses the relocation fight so the kid is actually still in contact with the loser parent; the sweet 5-year-old turns into a questioning 13-year-old; the 13-year-old begins to question the winner parent’s motivations and veracity; the 13-year-old gets an earful on the greed and mendacity of the winner parent from the loser parent’s new partner (evil stepmother, just like in fairy tale!); the 13-year-old decides to switch allegiance and refuses to return “home” to the winner parent’s house, thus putting the continued child support cashflow at risk.

Readers: What do you think? If we know that a child hates one parent is there in fact a practical hope of figuring out why? Or will we just spend the remnants of what would have been this child’s college fund paying psychologists to guess?

Related:

• no blog entry is complete without a reference to Rachel Dolezal, who sued her husband (and father of one of her two children) and was subsequently accused by the defendant of parental alienation (New York Daily News)

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Sail Boston 2017 ended today with the departure of tall ships from all around the world.

Here are some photos from the dock, from a schooner (Hindu), from the Institute for Contemporary Art’s 4th floor, and from an East Coast Aero Club Robinson R44 helicopter:

album on Google Photos

Enjoy!

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Folks:

Helicopters Explained for Curious Children is now available as a Kindle book (paperback eventually). If you’re a Kindle Unlimited subscriber can you please download and give some feedback (technical or content-related).

If you’re not a Kindle Unlimited subscriber and buy it and don’t love it I’ll be happy to personally refund your $1.99 via PayPal!

Thanks in advance for any comments.

[I should note that this was developed as a hand-out for schools that we visit in our helicopter (free of charge). Also,if you don’t want to invest $1.99, email me and I will send you the ePub or PDF.]

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