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His question reminded me of the essay, Collectivized Ethics, by Ayn Rand, in The Virtue of Selfishness. Particularly the beginning of the essay.

Certain questions, which one frequently hears, are not philosophical queries, but psychological confessions. This is particularly true in the field of ethics. It is especially in discussions of ethics that one must check one’s premises (or remember them), and more: one must learn to check the premises of one’s adversaries.

For instance, Objectivists will often hear a question such as: “What will be done about the poor or the handicapped in a free society?”

The altruist-collectivist premise, implicit in that question, is that men are “their brothers’ keepers” and that the misfortune of some is a mortgage on others. The questioner is ignoring or evading the basic premises of Objectivist ethics and is attempting to switch the discussion onto his own collectivist base. Observe that he does not ask: “Should anything be done?” but: “What will be done?”—as if the collectivist premise had been tacitly accepted and all that remains is a discussion of the means to implement it.

I'm curious how your opponent would react if you simply ask him, "Should something be done in the first place. If so, why?" He'll of course answer Yes to the first question. Get him to justify his ethical premise for you with the second question.

Edited by Amaroq
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I believe the current disagreement is over whether the US Constitution, as it is today, amounts to a contract. VcatoV says "yes," everyone else I've seen says "no."

I was never asked to sign the US Constitution as a contract. (I would probably do so provided everyone else freaking FOLLOWED it, but in today's culture the presumption would instead be that if I were to sign it I would be bound by, and be required to agree with, what the current and previous congresses and presidents are doing and have done, even though I believe that they are violations of the Constitution.) Since I haven't signed it, and neither have any of the other alleged "parties", it is not a contract. (Though certain parties have taken an oath to uphold it.)

What the US Constitution is, is law, and law can be, and regularly is, imposed on someone without his consent and will operate on him as long as he is within its jurisdiction (and sometimes even when he leaves if he retains citizenship).

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I believe the argument that social contract people try to make is that the government owns all land and resources in the country, and them controlling what you use those resources for is like a landlord controlling what someone does in a condominium.

Oh Jesus, not the "condominium argument." If I had a nickel for how many times I've encountered that to justify taxation... :dough:

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What the US Constitution is, is law, and law can be, and regularly is, imposed on someone without his consent and will operate on him as long as he is within its jurisdiction (and sometimes even when he leaves if he retains citizenship).

I see. And how do you define law?

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I believe the argument that social contract people try to make is that the government owns all land and resources in the country, and them controlling what you use those resources for is like a landlord controlling what someone does in a condominium.

I don't know who makes that argument, but it is nothing more than Feudalism dressed up.

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His question reminded me of the essay, Collectivized Ethics, by Ayn Rand, in The Virtue of Selfishness. Particularly the beginning of the essay.

I'm curious how your opponent would react if you simply ask him, "Should something be done in the first place. If so, why?" He'll of course answer Yes to the first question. Get him to justify his ethical premise for you with the second question.

If you visited the thread, then this may be redundant, but I replied to his question with "Nothing. Nothing should be done by a society in that situation, since it is only a collection of individuals." I added, of course, that it was up to individuals to decide whether or not to assist.

With regard to his original question, I feel comfortable in my response. It was simply the contractual pert that hung me up. Perusing this discussion, however, I am inclined to side with 2046, softwarenerd, and now apparently VcatoV, and the "no social contract" argument.

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For those who haven't read the linked discussion, I strongly suggest you give it a reading, if only for the entertainment. He gave up after round 2, which was fairly surprising. I thought he would endure at least a few more turns.

If you find no humor in me satirizing and blatantly belittling an altrusit, then you might consider skipping it. But if you sail on the opposite ship, jump on in.

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America is a nation of contract, including the contract citizens "sign"/accept by birth-and-staying here or by moving here.

How would you respond to this hypothetical situation:

There is an empty house up for sell in a neighborhood. All the neighbors living around the house get together and decide they should be entitled to 50% of the income of whoever purchases the property. If a person moves into the house knowing of the situation, is he obligated to accept their taxation since he knew of the expectation and moved in anyway? Or is it the case that, by geography alone, they never had a right to any of his property in the first place?

This example isn't meant to mirror the exact details involved with taxation in America as it is today, but the ethics involved in both cases are the same. I don't think that- as it is today- moving to (or not moving out of) America constitutes an implicit social contract to have taxes taken.

Edited by Cole
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I'd already read it when I posted that. I did indeed find it amusing. xD

I remember that you did tell him that nothing should be done. I don't think I remember him giving a reason for why something should be done other than the constitution/"contract" we "agreed to" by being born here says so.

I've seen my roommate jump through some pretty intricate and confusing hoops to try to justify altruism. I'd love to see what kinds of hoops your opponent is willing, and able, to jump through.

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How would you respond to this hypothetical situation:

There is an empty house up for sell in a neighborhood. All the neighbors living around the house get together and decide they should be entitled to 50% of the income of whoever purchases the property. If a person moves into the house knowing of the situation, is he obligated to accept their taxation since he knew of the expectation and moved in anyway? Or is it the case that, by geography alone, they never had a right to any of his property in the first place?

This example isn't meant to mirror the exact details involved with taxation in America as it is today, but the ethics involved in both cases are the same. I don't think that- as it is today- moving to (or not moving out of) America constitutes an implicit social contract to have taxes taken.

I would say that unless the people around the property purchased the property as a "group" and are then reselling it, they cannot take the money (though of course, they can demand all they want). It is nothing more than a troll living under a bridge.

That being said-my answer is to a hypothetical. As I have stated previously and multiple times, I was discussing things as they are currently. The United States was founded as a society of contract, and its laws and customs are ingrained in such a manner. Igniting the intellectual revolution is the job of the Objectivist :lol:.

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I would say that unless the people around the property purchased the property as a "group" and are then reselling it, they cannot take the money (though of course, they can demand all they want). It is nothing more than a troll living under a bridge.

That being said-my answer is to a hypothetical. As I have stated previously and multiple times, I was discussing things as they are currently. The United States was founded as a society of contract, and its laws and customs are ingrained in such a manner. Igniting the intellectual revolution is the job of the Objectivist :thumbsup:.

I understand that you're discussing things as they are currently. The point I am trying to get at is; What is the key difference between my hypothetical situation and the current state of America that constitutes an explicit contractual agreement? If it is immoral for one person to assert this type of claim over the property of anybody who moves into a certain geographical area, then at what point does it become moral for a group of people organized into a government to do so?

I suspect that your response to this may be that it is not moral for the government to take taxes by force, but it is still condition of living in this country. I agree. But the discussion here is whether or not Americans actively agree to give up their right to property simply by owning it in a certain geographical area. The fact that the government will take taxes from you whether you consent or not does not imply an agreement to have those taxes taken.

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I understand that you're discussing things as they are currently. The point I am trying to get at is; What is the key difference between my hypothetical situation and the current state of America that constitutes an explicit contractual agreement? If it is immoral for one person to assert this type of claim over the property of anybody who moves into a certain geographical area, then at what point does it become moral for a group of people organized into a government to do so?

I suspect that your response to this may be that it is not moral for the government to take taxes by force, but it is still condition of living in this country. I agree. But the discussion here is whether or not Americans actively agree to give up their right to property simply by owning it in a certain geographical area. The fact that the government will take taxes from you whether you consent or not does not imply an agreement to have those taxes taken.

-edited to add Constitution section. I apologize-I tend to shy away from writing lengthy posts, and so felt a bit overwhelmed-but I felt like I had something to say! :)

You suspected-wisely. ;)

I have been thinking a lot about this subject, and how to make it more understandable. I am glad that we all agree (at least hopefully, it appears) in principle. So, how to explain things-as-they-are:

Most of human society and history, with brief flashes, has been collectivist. As a corollary, most societies have been Societies of Status. Because the individual did not matter, and the group reigned supreme, the organization and separation of mankind into classes and groups was necessary. Most of these societies were stagnant or class-rigid, meaning that an individual could rarely move upwards (though very easily could move downwards). Thus each class developed its own characteristics: from dress to dinner, from song to handshake, from dancing to toilet protocol. All that mattered was an "individual's" status, and his life was solely determined by that status. Lord versus peasant, Spartan versus Helot, Brahmin versus Pariah, Wang versus Shumin-call it what you want to call it, you were not John-you were "Farmer". Consequentially, most laws were centered around your "status". Each group had different laws, different taxes, different demands. These societies cram history, and still exist today.

Short of a history lesson, the Society of Contract was introduced by Rome. Ideally, the individual reigned supreme*1. Legally, all were treated equally, innocent until proven guilty, and possessing natural rights which emanated from one's individuality, nature, and being. The Society of Status was so pervasive, however, that Rome eventually became more mixed than it already had been, and eventually reverted to a Society of Status. For the United States, the next major event was Magna Carta-a document which is, quite literally, a contract. The participants at Runnymede drew up a contract with the king. The reason that this document survived, even being relevant in modern times, is that it reintroduced the foundations for the Society of Contract. In effect, Magna Carta planted the seeds. Though fruition came slowly, the seeds did grow-because many saw the principles of a contract-based society: namely, that it focuses upon the individual. Like I said before, I don't want to get too into it, but just look at the writings, principles, and inspirations of most of the enlightenment philosophers, from Voltaire to Rousseau. The contract-theory highlighted a principle to many people as much as a telescope does a distant star. Thus it is no wonder that so many great things came out of the establishment of the Society of Contract. Every relationship, whether it were between one to another or a man and his government, was viewed as a contract. But in their frenzy for liberty and the beauty of that distantly-shining star, most legalized, nationalized, and proselytized the telescope. Is it any surprise, then, that when the energy of the telescope finally collapsed as it naturally would, so many in Western Society, especially in Europe, stood in stupor as they were no closer to attaining that distant star than the first time they gazed upon it. The star continued to burn brightly, but they had failed to get there-and thus, in the dark vacuum that remained, the Society of Status returned to Europe-and is quickly returning here.

The Constitution, as originally designed, was a contract between the government and male property-holders*2. It was assumed that limiting eligibility to property-ownership would produce a vested interest in the machinations of government. Obviously, the erosions of the Constitution added continuous faults in the motor, turning what could have been pebbles of problems into boulders. It was nevertheless supposed that these property holders would be signing "two" contracts upon purchasing property (legally extended to rent, inhabitants, etc.): one to the individual from whom you are purchasing the land, and the other to the "government", or the rest of the property holders. The second contract, embodied in the oath of office ceremonies, was aimed at ensuring that all Americans would sustain from violating the rights of others in exchange for the protection of one's owns rights being violated. This was the "contract"

That the Society of Contract is based-upon or agrees with individualism is without question; the problem lies with the way these intellectuals attempted to implement their love for individualism. It was a contradiction: mostly, as has been the historical case, because the Society of Status was still so pervasive and powerful a force. In the event of a contradiction, two things will assuredly happen: 1.) the individual discovers and corrects the error, 2.) the "timer" runs out and the contradiction eventually destabilizes the entire system, forcing one to revert or compartmentalize.

Clearly, Ayn Rand sorted out this contradiction, and set the foundations for a new Society. Her beliefs about government, from the absence of a legislature to no taxation, stem directly from her views of an individual, the nature of rights, and the relationship between individuals. It is possible, perhaps probable, that the Society of Contract is nothing more than a cline between the Society of Status and the Society of ____(Society of the Individual? :) ). That is...an interesting discussion.

*1 Though there is much to disagree with concerning the Society of Contract, the importance lies in the principles, rather than the method of implementation.

*2 Ironically, the elementary unit of the society of status is almost always the family. That only males could vote does not show sexism as much as it does a continuation of the belief that th elementary unit was the family, legally, while crying out that it was the individually, in principle. The male was supposed to be the father of the family, who voted and made decisions as the "head of the house".

Edited by VcatoV
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The Constitution, as originally designed, was a contract between the government and male property-holders*2.

Wrong. Wrong wrong wrong.

A contract requires the agreement of all parties to it.

Many male property owners in the United States did not agree to it when it was established, and many (all too many) do not agree to it now. It was imposed on them without their consent. Certainly there was a process followed in doing so where people had the opportunity to debate it and argue against it... but those opposed to it lost that argument and had it, in essence, forced on them.

It was, as I said, a *law*, functioning like criminal law, not a *contract*. Criminal law is imposed on people and by its very nature would not work if people had to agree to it (as they do with a contract). If all law functioned like contracts, a robber could get away with a robbery simply by proving he never agreed to the law against robbery. He never signed on the dotted line saying he'd never commit a robbery, so you cannot prosecute him under the terms of the contract.

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Though I am aware that this thread has evolved into a discussion of innate contracts, I thought I'd share my final conclusion from the other forum. I chose to surrender, because it became increasingly clear to me that, even after countering their points, my opponents would continue in their irrationality:

""I assume this is some of Amo's nonsense. I don't read hist posts because, well, they're nonsense from someone who just enjoys arguing because he thinks it shows how smart he is. Only a real idiot would believe what he says here."

You aren't lying; you obviously failed to read my post, because you have claimed that I post nothing but nonsense, though you've failed to show how what I've said is nonsensical. I do hold the opinion of the minority, especially in this forum, but that does not negate my statements as untrue, simply because they are unpopular.

Your insinuation that the seller is responsible for the education of the buyer is absolutely incredulous. It is the buyer's responsibility to educate himself about any product, and saying that healthcare is "too complex" only belittles the ability of the human mind, and only attempts to paint man as some poor slave to capitalism, unable to better himself. That is patently untrue. Just as the men and women who operate the healthcare industry were able to learn about their trade, consumers are able to learn it too. Forgive me for considering mankind able and rational.

And in the case of health insurance, your blatant little false analogy is lacking. It would be rational to shop for health insurance before someone was stricken with a painful condition. Regardless, it is not the health insurer's responsibility to provide a person with health insurance, simply because they are in pain and are "incapable of thinking". That, sir, is nonsensical. And on you, I think even Van Mises would say to give up.

To all who have followed this conversation diligently, I applaud you. Those who disagree with me will attempt - indeed, have attempted - to draw me as a heartless monster. They have tried to paint me as a backwards, selfish, and even dangerous radical. They have decried my support of capitalism as prehistoric and outdated. To those who think me thus, I say this: Is it selfish to recognize my right to life and property, and to respect those very rights for everyone else? I think not. Is capitalism outdated, even though it has never been allowed to function, always swallowed immediately by regulation? I think not.

The absolute nonsense of blaming capitalism for the ravages produced by collectivism, and blaming capitalists for the larcenies committed by collectivists is pitiful, almost childlike.

It is clear that engaging any of you was a mistake. Literally none of you have grasped the concept of actual logic. All of you are suckers to the trend, and slaves to your emotions. While that, alone, worries me not, it is when you decide that your shackles best fit around the ankles of others that I object. I will continue to object to your impositions of force, be them in the name of the "public good" or "whole" or "nation" or "the children". I will continue to object to your assaults upon my property, because that is what is happening. You know it, and you don't care. But you will one day, and hopefully by then I will have eloped to the rationality of Galt's Gulch, to a world where men are truly free to work and play as they choose. When you've finally filed bankruptcy on all of your bloody debt and the world comes crashing down to rubble at your parasitic feet, I hope that I am away in a society for individuals, not "the people" - a society of men, not slaves or animals. You could at least have the common courtesy to erect a cage around your madness. Why not isolate yourselves and start your own country under your principles? Is that "too radical"? Or is it just that you'd rather leech from my pocket?"

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  • 2 weeks later...

I'm back, and I am unqualified to counter this argument. I posted the Yaron Brook/Don Watkins article "Stop Blaming Capitalism for Government Failures", and this is the rebuttal:

I scanned this and it's your usual anti-government, mostly fact-free, free market worshipping propaganda.

"government-licensed rating agencies, which gave AAA ratings to mortgage-backed securities, creating a false sense of confidence"

This is true, but trying to blame the government for the irresponsibility and dishonesty of rating agencies is patently absurd.

"In the face of this long list, who can say with a straight face that the housing and financial markets were frontiers of “cowboy capitalism”?"

You mean that short list of sound bites? Yes. It's actually pretty easy to put most of the blame on the private sector if you aren't blinded by ideology, as you clearly are. Your "long list" is actually rather short and is largely a list of popular misconceptions.

"the Community Reinvestment Act, which forces banks to lend money to low-income and poor-credit households"

Feel free to produce one iota of evidence that any lending company made a mortgage they didn't want to make. You can't. Lenders loved making those loans because they were so profitable. The following was posted in another forum by someone else, and it provides a much more accurate picture of what happened than your nonsense:

******************

1. The congress created Fannie and Freddy many years ago to encourage home ownership. They weren't direct lenders, but would buy loans from S&Ls (remember them?) and banks who originated home loans on fairly conservative terms. The terms under which Fannie and Freddy were willing to purchase required hefty income ratios and down payments, and also limited the amount that could be borrowed.

2. This created a market for borrowers who could not qualify for conventional loans. The first big group were "jumbo loans", loans that exceeded the upper limit of what Fanny and freddy would accept. They also had "no documentation" loans, loans that had substantial down payments but didn't require borrowers to prove income and assets. These carried marginally higher interest rates, due to the higher risk involved. World Savings and Countrywide Financial led the field in originating these loans.

3. Since the originators of those loans couldn't sell them to Fannie and Freddy, they had to find a way to sell them to other investors. Sombody came up with the idea of bundling these loans, all of various levels of risk, into an investment pool, and then selling securities from that pool of money. They were able to get Standard and Poor's, the investment rating agency, to rate these as triple-A investments. Investment banks, seeing high yield securities with AAA ratings, gobbled them up.

4. This created a demand for even more of these securities, which encouraged the banks to orignate more loans. As they wrote more loans, the terms they accepted in originating the loans became looser and looser. "No-documentation" loans became known as "liar loans". Underwriters were encouraged to look the other way more and more. Why? Because the banks knew they would have no problem unloading the bad paper. The market for these securities was almost unquenchable. Even though the loans coming in the front door were getting riskier and riskier, they were still going out the back door faster and faster in the form of AAA securities.

5. Then the recession hit. The houses backing the loans they had floated, with inflated prices driven up by easy financing, started losing value. A lot of the loans, written as adjustable rate mortgages, started hitting the higher rates that were inherent in the loans, and the people who borrowed the money couldn't sell the house for what they paid for it, nor could they afford the payments. The loans went into default. All those securities, which were backed by the bad loans, which were backed by the devalued houses, lost their value. Since the banks were carrying these securities as assets, they themselves had borrowed money against those assets, and so were now in a position to default. The whole house of cards came tumbling down.

6. How was fannie and freddie involved? Not really that much. They pretty much ignored the sub-prime market until 2004, and then started buying the securities. They took a hit on the securities, and, although the loans that made up the majority of their business were fairly conservative, the housing that backed those loans were devalued by the crash of housing prices. Consequently, they ended up needing a bailout, but haven't had to pull as much money as they originally thought they needed.

Now, people should pay attention here. This was all done without any government agency encouraging anybody to buy those houses or any bank to write those loans. Government was NOT the culprit in this part of the story.

Was there a failure of government? Yes. As far back as 1999, community groups were complaining to the Federal Reserve about the predatory lending practices of these lenders. The fed did nothing about the problem. They were only paying attention to conventional lenders, and pretty much ignoring banks like world Savings and Countrywide. Further, the Congress abolished the Glass Steagal act in 1999, which basically deregulated the investment banks who were buying up the securities and borrowing against them. Some of the banks were leveraged by as much as 40-1 against those securities. AIG, the insurance company had gotten in the business of selling insurance policies called "credit-default-swaps" against the failure of those securities. When the securities failed, AIG lost billions. That exacerbated the collapse. The upshot was the massive bailout engineered a year ago.

So, this isn't about any special effort on the part of congress to expand lending by offering stupid loans to stupid people. This was strictly a private sector generated crisis. It might have been avoided by proper regulatory oversight by the federal reserve and the SEC, but anybody who says it's the result of some sort of scheme by Fannie or Freddy doesn't know what he's talking about.

******************

To this I'll add:

- Here's an article about community groups warning the fed:

http://www.washingtonpost.com/wp-dyn/conte...9/26/AR200909...

- Credit default swaps were effectively a form of insurance against against the failure of securities. But credit default swaps were not regulated like normal insurance, so AIG was not required by law to put anything aside to pay claims. Believing such highly rated securities backed by real estate had virtually no chance of failing, AIG failed to set aside anything to pay possible claims, so when they started failing, AIG had to pay out billions in claims, and they had to get the money from other parts of the company.

"Credit default swaps are insurance-like contracts that promise to cover losses on certain securities in the event of a default. They typically apply to municipal bonds, corporate debt and mortgage securities and are sold by banks, hedge funds and others. The buyer of the credit default insurance pays premiums over a period of time in return for peace of mind, knowing that losses will be covered if a default happens. It's supposed to work similarly to someone taking out home insurance to protect against losses from fire and theft.

Except that it doesn't. Banks and insurance companies are regulated; the credit swaps market is not. As a result, contracts can be traded — or swapped — from investor to investor without anyone overseeing the trades to ensure the buyer has the resources to cover the losses if the security defaults.

[...]

American International Group, the world's largest insurer, recently reported the biggest loss in the company's history largely due to an $11 billion writedown on its CDS holdings."

http://www.time.com/time/business/article/...1723152,00.html

- Rating agencies:

"internal documents reveal that the credit rating agencies knew that the ratings they were giving the securities were overvalued."

http://www.stockbrokerfraudblog.com/2008/1..._poors_and_fi...

- Regarding those mortgage companies being "forced" to make loans to people:

"NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission on Thursday filed securities fraud charges against former Countrywide Chief Executive Angelo Mozilo and two other former executives.

The trio was charged with deliberately misleading investors by telling them the company was a quality lender of mostly prime mortgages and had prudent underwriting standards, while it actually was engaging in very risky lending practices in order to build and maintain market share.

[...]

"This is the tale of two companies," said Robert Khuzami, director of the SEC's Division of Enforcement. "Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards. But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk."

From 2005 to 2007, Countrywide engaged in an unprecedented expansion of its underwriting guidelines and was writing riskier and riskier loans, according to the SEC. The senior executives knew that defaults and delinquencies would rise."

http://money.cnn.com/2009/06/04/news/econo...harges/index....

- The power of the free market:

"But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.

[...]

“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,” said Representative Henry A. Waxman of California, chairman of the committee. “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.” "

http://www.nytimes.com/2008/10/24/business...my/24panel.html

Isn't learning fun?

This also shows that I, in fact, did not quit posting in the thread. I just couldn't leave well enough alone, I suppose.

Edited by AmoProbos
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