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Mark Perry

Mark Perry

Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

Articles by Mark Perry

Some amazing findings on income mobility in the US including this: the image of a static 1 and 99 percent is false – Publications – AEI

5 days ago

AEI
Some amazing findings on income mobility in the US including this: the image of a static 1 and 99 percent is false

In a 2014 New York Times article titled “From Rages to Riches to Rags” Washington University professor of social welfare Mark Rank presented some amazing and striking findings on income mobility in America, here’s a slice (my emphasis):
The picture drawn of the 1 percent has been that of a static population, just as the 99 percent is often portrayed as unchanging. There is a line drawn between these two groups, and never the two shall cross. But is it the case that the top 1 percent of the income distribution are the same people year in and year out? Or, for that matter, what about the top 5, 10 and 20 percent? To what extent do everyday Americans experience these levels

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Something to be thankful for: the cost of a 2017 Thanksgiving dinner is lower than last year and 23% lower than 1986 – Publications – AEI

6 days ago

AEI
Something to be thankful for: the cost of a 2017 Thanksgiving dinner is lower than last year and 23% lower than 1986

From today’s annual report from the American Farm Bureau Federation (AFBF) on the cost of a classic holiday meal, “Farm Bureau Survey Reveals Lowest Thanksgiving Dinner Cost in Five Years”:
American Farm Bureau Federation’s 32nd annual price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $49.12, a 75-cent decrease from last year’s average of $49.87. The big ticket item – a 16-pound turkey – came in at a total of $22.38 this year. That’s roughly $1.40 per pound, a decrease of 2 cents per pound, or a total of 36 cents per whole turkey, compared to 2016.
“For the second consecutive year, the

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Details in BLS report suggest that earnings differentials by gender can be explained by age, marital status, children, hours worked – Publications – AEI

6 days ago

AEI
Details in BLS report suggest that earnings differentials by gender can be explained by age, marital status, children, hours worked

The Bureau of Labor Statistics (BLS) releases an annual report every year on the “Highlights of Women’s Earnings” (since the BLS report actually analyzes equally both men’s and women’s earnings, one might ask why the report isn’t simply titled more accurately “Highlights of Earnings in America”?). Here’s the opening paragraph from the most recent BLS report “Highlights of Women’s Earnings in 2016” that was released in August:
In 2016, women who were full-time wage and salary workers had median usual weekly earnings that were 82 percent of those of male full-time wage and salary workers. In 1979, the first year for which comparable earnings data are

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Quotation of the day on how the radical college left eliminated opposing voices and replaced them with extremism and demagoguery – Publications – AEI

7 days ago

AEI
Quotation of the day on how the radical college left eliminated opposing voices and replaced them with extremism and demagoguery
…. is from John M. Ellis, professor emeritus of German literature at the University of California-Santa Cruz and chairman of the California Association of Scholar, writing in today’s Wall Street Journal (“Higher Education’s Deeper Sickness“):
We are now close to the end of a half-century process by which the college campuses have been emptied of centrist and right-of-center voices. Well-balanced opposing views act as a corrective for each other: The weaker arguments of one side are pounced on and picked off by the other. Both remain consequently healthier and more intellectually viable. But intellectual dominance promotes stupidity. As one side becomes

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NAFTA has been a smashing success, let’s hope the protectionist-in-chief doesn’t make America poorer by scrapping it – Publications – AEI

7 days ago

AEI
NAFTA has been a smashing success, let’s hope the protectionist-in-chief doesn’t make America poorer by scrapping it

Below are a few excerpts from some recent reports on NAFTA and Trump’s threat to pull out of what the protectionist-in-chief calls the “worst trade deal ever made.” From the Wall Street Journal’s editorial yesterday (“A NAFTA Recession?“), emphasis mine:
President Trump keeps touting the 3% U.S. GDP growth of the last two quarters and “record” stock prices, and the economy is his best talking point. But he might want to take a look at the latest Journal survey of economists about the impact of a U.S. withdrawal from the North American Free Trade Agreement.
Not a single economist said that the withdrawal Mr. Trump has threatened would help the economy. Some 82% said the

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2016 FBI data: Jews were 3X more likely than blacks, 1.5X more likely than Muslims to be a hate crime victim – Publications – AEI

8 days ago

AEI
2016 FBI data: Jews were 3X more likely than blacks, 1.5X more likely than Muslims to be a hate crime victim

Members of which of these groups were most likely to be a victim of a hate crime in 2016: Muslims, Blacks or Jews? Based on media coverage, you would probably have to say Muslims or Blacks. According to a Google news search for the term “hate crimes” along with the name of each of those three groups, there are 131,000 results for “hate crimes” + black, 69,00 results for “hate crimes” + Muslims and only 32,500 results for “hate crimes” + Jews. Based on news reports, you might think that blacks were four times more likely than Jews to be the victim of a hate crime and that Muslims were almost more than twice as likely to be a hate crime victim compared to Jews.
Hate crime

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Chart of the day: US trade deficits vs. US household net worth — they’ve risen in tandem over the last half century – Publications – AEI

8 days ago

AEI
Chart of the day: US trade deficits vs. US household net worth — they’ve risen in tandem over the last half century

The chart above was inspired by a similar one that Don Boudreaux featured in the round of his debate at Hillsdale College with Ian Fletcher last week (featured on CD here). It shows the annual US trade deficit (inverted, data here) and the annual dollar value of US household net worth (data here), from 1970 to 2016. As can be seen in the chart, the steady increase in the US trade deficit over the last nearly half-century to a peak of $770 billion in 2006 before falling to an average of about $525 billion during the last seven years has been accompanied by a steady increase in the value of US household net worth, which has increased nearly four-fold in inflation-adjusted

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Profitable US airline oligopoly enjoys global marketplace but doesn’t like competition from low-cost Gulf carriers – Publications – AEI

9 days ago

AEI
Profitable US airline oligopoly enjoys global marketplace but doesn’t like competition from low-cost Gulf carriers

I flew recently on Delta Airlines and noticed that Delta is still bragging in its Sky Magazine (on p. 210, see graphic above) that the airline “can get you to more than 325 destinations in more than 60 countries on six continents” (see previous CD post about this topic here). But at the same time it enjoys operating in a global marketplace for air travel, Delta is engaged in a lobbying and intense public relations effort to maintain its entrenched domestic oligopoly position in the US market (along with United and American) by restricting foreign competition from more efficient, lower cost Gulf carriers like Emirates Airline,  Etihad Airways and Qatar Airways (see

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The best sentence I read today… – Publications – AEI

9 days ago

AEI
The best sentence I read today…
…. is on taxpayer subsidies and lobbyists from the Wall Street Journal’s editorial board in yesterday’s paper:
This goes to show that as long as a subsidy has life, it has lobbyists.
That was in regard to the generous taxpayer subsidies for wind energy, which under the current draft tax reform will be reduced to their 1992 levels and eliminated after 2020. Obviously, the Big Wind lobby is not happy. Here’s more (my emphasis):
In the 1980s wind power was dubbed an “infant industry” that needed federal help to grow. More than three decades and tens of billions of dollars in subsidies later, the business of making electricity from spinning turbines remains inefficient and heavily dependent on federal aid—i.e., the American taxpayer. Tax reform is a chance

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Saturday afternoon links – Publications – AEI

10 days ago

AEI
Saturday afternoon links

1. Chart of the Day I (above) shows the close statistical correlation (0.964) over time from 1980 to 2016 (logarithmic scaling) between: a) annual US real imports of goods and services and b) annual US civilian employment. Don’t we always hear from Trump and other protectionists that imports lead to US job losses? According to the actual data and economic reality real US imports and US employment have gone up in perfect unison over the last 36 years.
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2. Video of the Day I (above) features the first round of a debate between Don Boudreaux and anti-trade protectionist Ian Fletcher (author of the book Free Trade Doesn’t Work) that took place earlier this week on Tuesday at Hillsdale College. The chart of the day

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44 years ago, economist Murray Rothbard predicted the rise of quality pay-TV like Netflix, HBO, Amazon, etc. – Publications – AEI

11 days ago

AEI
44 years ago, economist Murray Rothbard predicted the rise of quality pay-TV like Netflix, HBO, Amazon, etc.

In 1973 when commercial TV in America was an oligopoly of only three major networks (ABC, CBS and NBC), economist Murray Rothbard, presciently predicted in his book For a New Liberty: The Libertarian Manifesto the eventual rise of pay-TV (Netflix, HBO, Showtime, Amazon, etc.). From page 122 in the chapter Personal Liberty, here’s Murray Rothbard writing 44 years ago:
Furthermore, if TV channels become free, privately owned, and independent, the big networks will no longer be able to put pressure upon the FCC to outlaw the effective competition of pay-television. It is only because the FCC has outlawed pay-TV that it has not been able to gain a foothold. “Free TV” is, of course,

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Scarcity versus abundance – Publications – AEI

12 days ago

AEI
Scarcity versus abundance
John Tamny: Stating what is visibly obvious, capitalism is all about turning scarcity into abundance. Source.
Mark Perry I: Stating what is visibly obvious, international trade is all about turning scarcity into abundance.
Mark Perry II: Stating what is visibly obvious, protectionism is all about turning abundance into scarcity.
Scarcity versus abundance
Mark Perry

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Quotation of the day on ignorance vs. stupidity…. – Publications – AEI

12 days ago

AEI
Quotation of the day on ignorance vs. stupidity….
…. is from George Mason University economics professor Walter E. Williams writing in his latest weekly syndicated column “Ignorance versus Stupidity“:
The fact that we have gross ignorance about how the world operates is ignored by the know-it-all elites who seek to control our lives. Let’s look at a few examples of the world’s complexity.
According to some estimates, there are roughly 100 million traffic signals in the U.S. How many of us would like the U.S. Congress, in the name of public health and safety, to be in charge of their actual operation? Congress or a committee it authorizes would determine the length of time traffic lights stay red, yellow and green and what hours of the day and at what intersections lights flash red or

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Following the election of Trump in 2016, the stock market had the best one-year return since 1944 – Publications – AEI

13 days ago

AEI
Following the election of Trump in 2016, the stock market had the best one-year return since 1944

A year ago tomorrow on the day following the 2016 presidential election, economist Paul Krugman made the following statement in an article in the New York Times titled “The Economic Fallout” (emphasis added):
It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover? Frankly, I find it hard to care much, even though this is my specialty. The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.
Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never. Under any circumstances, putting an irresponsible,

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What nation on Earth has reduced its carbon emissions more than any other, part II? – Publications – AEI

13 days ago

AEI
What nation on Earth has reduced its carbon emissions more than any other, part II?

A few weeks ago, I had a post (“Q: What nation on Earth has reduced its carbon emissions more than any other?“) that featured a video of Dr. Patrick Michaels, director of the Center for the Study of Science at the Cato Institute, who suggested that the answer to the question was “the USA.” There was some discussion in the comment section about where there were other countries that had reduced CO2 emissions more than the US, e.g., Russian Federation.
Dr. Michaels didn’t provide any specific data sources or time period in the video to support his answer, and I was unaware of any reliable data sources on international CO2 emissions by country until I came across a post last night on the Watts Up With

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Quotation of the day on what explains the idiocy of the liberal elite…. – Publications – AEI

14 days ago

AEI
Quotation of the day on what explains the idiocy of the liberal elite….
…. is from a January 2017 article (“What Explains the Idiocy of the Liberal Elite? It’s Their Education?“) in the UK Spectator by journalist and author James Bartholomew:
Why would anyone support Hillary Clinton — a ruthless, charmless Washington insider with socialist tendencies? Why do lawyers, churchmen, the BBC and, indeed, most educated people support the EU — an organization as saturated with smug self-righteousness as it is with corruption; one which created the euro, which in turn has caused millions of people to be unemployed; an organization which combines a yawning democratic deficit with incompetence over immigration and economic growth?
The elite are supposed to be educated. So why are they so silly?

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Quotation of the day on how protectionists are either sad or despicable figures…. – Publications – AEI

15 days ago

AEI
Quotation of the day on how protectionists are either sad or despicable figures….
…. is from Don Boudreaux writing at Cafe Hayek:
The economic case for protectionism is deeply illogical: a country’s people cannot all be enriched by policies that decrease the availability of goods and services, including that of inputs to production. The protectionist is either a sad or a despicable figure. He’s a sad figure if he truly believes that people generally are enriched by any government policy that obstructs their access to goods and services. It’s sad that anyone clings to such illogic. The protectionist is a despicable figure if, while himself knowing better, he uses this logical fallacy to dupe others into supporting a policy that enriches him at their expense. It’s my experience that the

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Why should America complain about an ‘unlevel playing field’ for international trade when it’s tilted in our favor? – Publications – AEI

17 days ago

AEI
Why should America complain about an ‘unlevel playing field’ for international trade when it’s tilted in our favor?
Don Boudreaux makes another excellent point here on Cafe Hayek  about the incessant appeals of protectionists (aka “scarcityists”) for government force to “level the playing field” when it comes to trade with China, Mexico, Japan, etc.:
Long ago I tired of responding to protectionists’ incessant appeals for government to “level the playing field.” Whoever uses that term to plead for trade barriers reveals a failure to understand trade. Still, I’ll answer your e-mail in which you allege that Beijing “unfairly tilts the playing field against” Americans – and I’ll answer it while sticking with this tired sports analogy despite the fact that sports analogies are almost always

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Some perspective on Apple’s pending stock market milestone — becoming the world’s first $1 trillion company – Publications – AEI

19 days ago

AEI
Some perspective on Apple’s pending stock market milestone — becoming the world’s first $1 trillion company

There’s been a lot of speculation recently that Apple could soon be the first company in history to be worth $1 trillion. Surging sales of the iPhone X have lifted the company’s expected revenues for the current quarter to record levels, and that’s boosted the company’s share price by 50% over the last year and brought the firm’s market cap to $868 billion at the closing today. Some analysts expect Apple’s market value to top $1 trillion by the end of this year, which would be a 15% gain from its current level.
The pending milestone of the world’s first $1 trillion private company made me think that it would be interesting to compare the market valuation of some the largest US

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King of the Washington swamp this month? Big Ethanol – Publications – AEI

21 days ago

AEI
King of the Washington swamp this month? Big Ethanol

From my op-ed in U.S. News and World Report “King of the Swamp“:
When news came out that the Environmental Protection Agency was simply gathering data and looking into modest changes to the amount of ethanol that’s forced into the nation’s gasoline supply, Big Ethanol threw a political temper tantrum as if their government-subsidized livelihoods depended on it. In a classic display of Washington putting special interests ahead of American consumers and the public interest, Iowa Republicans, Sens. Chuck Grassley and Joni Ernst, threatened to use their powerful committee positions to block key federal appointments. Despite its promise to drain the Washington swamp, the Trump administration caved to the politically powerful swamp

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Import duties are taxes imposed on, and paid for, by Americans, not foreign producers – Publications – AEI

22 days ago

AEI
Import duties are taxes imposed on, and paid for, by Americans, not foreign producers
A recent BloombergPolitics article (“U.S. Imposing Anti-Dumping Duties on Chinese Aluminum Foil“) provides the latest example of hundreds that illustrate how routinely media reports on trade protection are one-sided stories that only present the viewpoint of domestic producers. For example, notice in the original BloombergPolitics article there is one word that is never mentioned: “consumer.” To correct for that producer bias when the media writes about trade protectionism, I provide some balance below with a re-titled, revised, edited (in bold) version of the BloombergPolitics article that includes the viewpoint of the American consumer.

New Title: “U.S. Imposing Anti-Dumping Duties on Americans Who

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The best sentence I read today….. – Publications – AEI

22 days ago

AEI
The best sentence I read today…..
…. is on the “fragile veal generation” from Lenore Skenazy and Jonathan Heidt writing in the December 2017 issue of Reason Magazine (“The Fragile Generation: Bad policy and paranoid parenting are making kids too safe to succeed“):
Today many kids are raised like veal.
Here’s some context from the same article:
Parents, teachers, and professors are talking about the growing fragility they see. It’s hard to avoid the conclusion that the overprotection of children and the hypersensitivity of college students could be two sides of the same coin. By trying so hard to protect our kids, we’re making them too safe to succeed.
Bonus Accompanying Video: From Reason.tv “Are Your Kids Too Fragile? How to Make the Next Generation More Resilient.”

The best sentence

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Q: What nation on Earth has reduced its carbon emissions more than any other? – Publications – AEI

23 days ago

AEI
Q: What nation on Earth has reduced its carbon emissions more than any other?

Inconvenient Answer: According to climatologist Dr. Patrick Michaels, it’s “the good old USA, and that’s because we’ve been substituting natural gas for coal for power generation” as can be seen in the chart above, which shows that CO2 emissions from electric power generation in the US last year were the lowest in 28 years, going all the way to 1988. How often is that reported in the media?
In the video below, Dr. Patrick Michaels, director of the Center for the Study of Science at the Cato Institute and author of the book Lukewarming: The New Climate Science that Changes Everything, offers a current assessment of the political debate over climate change. He explains how the free market is allowing natural

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Bonus quotation of the day on propaganda vs. education…. – Publications – AEI

24 days ago

AEI
Bonus quotation of the day on propaganda vs. education….
…. is from Thomas Sowell writing in 2003 (“Twisted History“), emphasis added:
One of the things that we take for granted today is that it is wrong to take other people’s land by force. Neither American Indians nor the European invaders believed that. Both took other people’s land by force – as did Asians, Africans, Arabs, Polynesians, and others. The Indians no doubt regretted losing so many battles. But that is wholly different from saying that they thought battles were the wrong way to settle the question of who would control the land.
Today’s child cannot possibly put himself or herself in the mindset of Indians centuries ago, without infinitely more knowledge of history than our schools have ever taught. Nor is understanding

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Quotation of the day on mercantilism…. – Publications – AEI

24 days ago

AEI
Quotation of the day on mercantilism….
… is from Don Boudreaux writing on the Cafe Hayek blog:
In this, the 21st century, 17th-century mercantilism – a toxic mix of economic ignorance, grotesque hypocrisy, and cronyism – remains alive and well and supported by partisans left and right.
MP: Perhaps it’s obvious and/or redundant, but the exact same can be said for today’s free trade skeptics/protectionists.
Quotation of the day on mercantilism….
Mark Perry

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Quotation of the day on the great virtue of the free market….. – Publications – AEI

25 days ago

AEI
Quotation of the day on the great virtue of the free market…..
…. is from Milton Friedman’s 1999 essay “Why Government is the Problem“:
The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.
Quotation of the day on the great virtue of the free market…..
Mark Perry

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Quotation of the day on Trump’s sophomoric thinking on trade… – Publications – AEI

26 days ago

AEI
Quotation of the day on Trump’s sophomoric thinking on trade…
… is from Richard Epstein’s article “The Looming NAFTA Disaster” on the Hoover Institution website:
The President, without looking at any of the particular details, seems confident that NAFTA is a bad deal for America because it has led to trade deficits with Mexico ($55.6 billion in 2016) and Canada ($12.1 billion for 2016)—and to the displacement of some American workers. But this is sophomoric thinking. Free trade consists of three separate elements. First, there are the goods and services that move from the United States to Canada or Mexico. The firms that sell these goods and services make profits, as do the Canadian and Mexican firms that acquire them. Killing NAFTA would destroy those gains. Second, there are the

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Morningstar’s top-ranked active funds can’t sustain high performance, which strengthens the case for index investing – Publications – AEI

26 days ago

AEI
Morningstar’s top-ranked active funds can’t sustain high performance, which strengthens the case for index investing

In today’s Wall Street Journal, there’s a major 5,000-word, three-author, seven-graph cover story on investment research firm Morningstar’s mutual fund ratings (“The Morningstar Mirage” is the online title, “Mutual Fund Ratings Are Not What They Seem” is the title in today’s print edition) and how top-rated Morningstar funds rarely sustain high performance over time. The chart above tells the story of “mean reversion” for mutual funds, especially for the highest-rated funds — the average rating for a five-star fund falls to just above three stars within three years and down to three stars within five years. After ten years, the original range in Morningstar ratings from

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The best sentence I read today….. – Publications – AEI

26 days ago

AEI
The best sentence I read today…..
…. is from Heather Mac Donald’s excellent essay in the City Journal (“Standing on the Shoulders of Diversocrats: The mania to achieve racial and gender equity in the hard sciences and tech will hurt American competitiveness“):
Any female [college student] who thinks that she needs a female [professor] in front of her in order to learn as much as she can, or to envision a career in a particular field, has declared herself a follower rather than a pioneer—and a follower based on a characteristic irrelevant to intellectual achievement.
From the same article, a close runner-up:
The only thing that the academic diversity racket achieves is to bid up the salaries of plausibly qualified candidates, and redistribute those candidates to universities that can

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Quotation of the day….. – Publications – AEI

27 days ago

AEI
Quotation of the day…..
…. is from Rabbi Lord Jonathan Sacks’s speech at the AEI Annual Dinner last night:
There is only one nation, known to me, that had the same duel-founding as Biblical Israel, and that is the United States of America. The United States had its social covenant in the Declaration of Independence and its social contract in the Constitution. In America the social contract is still here but the social covenant is being lost. But there is good news – covenants can be renewed.
Watch the entire speech below, starting about 15:30:

Quotation of the day…..
Mark Perry

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