Weekly Pulse: On Health Care Repeal, House GOP Full of Sound and Fury

By Lindsay Beyerstein, Media Consortium blogger

House Republicans will hold a symbolic vote to overturn health care reform on January 12. The bill, which would repeal the Affordable Care Act (ACA) and set the nation’s health care laws back to the way they were last March, has no chance of becoming law. The GOP controls the House, but Democrats control the Senate. Senate Majority Leader Harry Reid announced that the Senate Democrats will block the bill.

Suzy Khimm of Mother Jones reports that the 2-page House bill carries no price tag. The Congressional Budget Office estimates that the ACA would save $143 billion dollars over the next decade. The GOP repeal bill contains no alternative plan. So, repealing the ACA would be tantamount to adding $143 billion to the deficit. So much for fiscal responsibility.

Why are the Republicans rushing to vote on a doomed bill without even bothering to hold hearings, or formulate a counter-proposal for the Congressional Budget Office to score? Kevin Drum of Mother Jones hazards a guess:

[Speaker John] Boehner [(R-OH)] knows two things: (a) he has to schedule a repeal vote because the tea partiers will go into open revolt if he doesn’t, and (b) it’s a dead letter with nothing more than symbolic value. So he’s scheduling a quick vote with no hearings and no CBO scoring just so he can say he’s done it, after which he can move on to other business he actually cares about.

An opportunity?

Steve Benen of the Washington Monthly argues that all this political theater around repealing the Affordable Care Act is an opportunity for Democrats to remind the public about all the popular aspects of the bill that the GOP is trying to strip away.

Last weekend several key provisions of the ACA took effect, including help for middle income seniors who are running up against the prescription drug “donut hole.” Until last Saturday, their drugs were covered up to a relatively low threshold, then they were on their own until they spent enough on prescriptions for the catastrophic coverage to kick in again. Those seniors will be reluctant to give up their brand new 50% discount on drugs in the donut hole.

Another crack at turning eggs into persons

A Colorado ballot initiative to bestow full human rights on fertilized ova was resoundingly defeated for the second time in the last midterm elections. Attempts to reclassify fertilized ova as people are an attempt to ban abortion, stem cell research, and some forms of birth control. Patrick Caldwell of the American Independent reports that new egg-as-person campaigns are stirring in other states where activists hope to take advantage of new Republican majorities.

Personhood USA, the group behind the failed Colorado ballot initiatives, claims that there is “action” (of some description) on personhood legislation in 30 states. Caldwell says Florida may be the next battleground. Personhood USA needs 676,000 signatures to get their proposed constitutional amendment on the ballot. Right now, they have zero, but they promise a “big push” in 2011.

Ronald McDonald = Joe the Camel

In AlterNet, Kelle Louaillier calls for more regulation of fast food industry advertising to children. New research shows that children are being exposed to significantly more fast food ads than they were just a few years ago. Other studies demonstrate that children give higher marks to food products when they are paired with a cartoon character. Louaillier writes of her organization’s campaign to prevent fast food companies from using cartoons to market fast food to kids:

For our part, my organization launched a campaign in March to convince McDonald’s to retire Ronald McDonald, its iconic advertising character, and the suite of predatory marketing practices of which the clown is at the heart. A study we commissioned by Lake Research Partners found that more than half of those polled say they “favor stopping corporations from using cartoons and other children’s characters to sell harmful products to children.”

Local elected officials are joining the cause, too. Los Angeles recently voted to make permanent a ban on the construction of new fast food restaurants in parts of the city. San Francisco has limited toy giveaway promotions to children’s meals that meet basic health criteria. The idea is spreading to other cities.

2011 trendspotting: Baby food

The hot new snack trend for 2011 is mush, as Bonnie Azab Powell reports in Grist. In an attempt to burnish its portfolio of “healthier” snack options for kids Tropicana (a PepsiCo company) is introducing a new line of pureed fruit and vegetable slurries. The products, sold under the brand name Tropolis, feature ground up fruits and veggies, vitamin C, and fiber in a portable plastic pouch. These “drinkified snacks” or “snackified drinks” will be priced at $2.49 to $3.49 for a four-pack, making them more expensive than fresh fruit.

This post features links to the best independent, progressive reporting about health care by members of The Media Consortium. It is free to reprint. Visit the Pulse for a complete list of articles on health care reform, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

Weekly Audit: GOP Plays Chicken with the Debt Ceiling

By Lindsay Beyerstein, Media Consortium blogger

Sen. Jim DeMint (R-SC) is calling for a “big showdown” over the upcoming vote to raise the nation’s debt ceiling to $14.3 trillion from $13.9 trillion. The debt ceiling is simply the maximum amount the government can borrow.

Congress routinely raises the debt ceiling every year. It’s common sense: Since the government has already pledged to increase spending, Congress must authorize additional borrowing. (Remember that the government is now forced to borrow billions of extra dollars to pay for tax cuts for the wealthy, which Republicans insisted on.) If the ceiling isn’t raised, the United States will be forced to default on its debts, with catastrophic consequences.

Why would default be catastrophic? The principle is the same for countries and consumers alike: If you have a good track record of paying your bills, lenders will lend you money at lower interest rates. If you don’t pay your bills on time, or default on your obligations altogether, lenders will demand higher interest rates.

Congressional Republicans say they oppose raising the debt ceiling because they favor fiscal responsibility. This kind of rhetoric is the height of recklessness. The interest on our debts is a big part of government spending. Even idle talk about defaults could spook some creditors into raising interest rates on U.S. debt and cost taxpayers dearly.

Steve Benen of the Washington Monthly quotes Austan Goolsbee, chair of the White House’s Council of Economic Advisers, who says that congressional GOP members are flirting with the “the first default in history caused purely by insanity.”

Making work pay (for real)

An astonishing 80% of full-time minimum wage workers can’t afford the necessities of life, according to new research by labor economist Jeannette Wicks-Lim of the Political Economy Research Institute, featured on the Real News Network.

Wicks-Lim argues for a two-part solution to the crisis of working poverty in America: i) raising the federal minimum wage to $12.30/hr from $7.50/hr; ii) Increasing the earned income tax credit to 40% of income. She estimates that these two policy changes would raise the income of a minimum wage worker from $15,000 to about $36,000 at a manageable cost to employers and taxpayers.

Her proposal is a revamp of President Bill Clinton’s attempt to “reform” welfare by cutting social service benefits and shifting government spending to tax credits. Currently, the Earned Income Tax Credit is a subsidy for the working poor that is designed to “make work pay”–i.e., if workers aren’t making enough in wages to secure a decent standard of living, the government provides an income subsidy to reward them for working.

However, if a decent standard of living remains out of reach for 80% of full-time minimum wage workers, Wicks-Lim argues that the minimum wage is too low and the subsidies are too modest to achieve the stated goal of making work pay.

Colorado minimum wage inches up

Speaking of minimum wage issues, Scot Kersgaard of the Colorado Independent reports that the minimum wage in the state ticked up from $7.25 an hour to $7.36 on January 1. The modest increase represents the annual adjustment for inflation. Every bit counts, but Colorado families are falling further behind. According to a new report by the Denver-based Bell Policy Center, 8.3% of working families in Colorado live below the federal poverty line, which is $22,050 for a family of four. Fully one-fourth of Colorado families do not earn enough to meet their basic needs, which requires an income approximately twice the FPL, according to the report.

Colorado is one of only 10 states that automatically adjust their minimum wages for inflation.

Wage theft epidemic

Unscrupulous employers are stealing untold millions of dollars from hardworking Americans, Dick Meister reports in AlterNet:

The cheating bosses don’t take the money directly from their employees. No, nothing as obvious as that. The employers practice their thievery by underpaying workers, sometimes by paying them less than the legal minimum wage. Or they fail to pay employees extra for overtime work, or even force them to work for nothing before or after their regular work shifts or at other times. Some employers make illegal deductions from employee wages. And some withhold the final paycheck due employees who quit.

In New York City alone, an estimated $18 million worth of wages is stolen every week. Workers in the restaurant, construction, and retail sectors are at increased risk of wage theft. Wage thieves disproportionately target undocumented workers because they assume that these employees will be less likely to report the crime.

Debt collection from beyond the grave

The dead don’t tell tales, but they have been known to sign debt collection papers, Andy Kroll reports in Mother Jones. Martha Kunkle died in 1995, but her printed name and signature appear on paperwork filed by the debt collection agency Portfolio Recovery Associates as late as 2006 and 2007. The ruse was discovered and PRA, facing a fraud lawsuit, agreed in 2008 that the “Kunkle’s” documents couldn’t be used in court. That didn’t stop the agency from trying to use them again in 2009.

The attorney general of Missouri has announced that he will investigate whether any of Kunkle’s handiwork was used to support debt collection in his state. The attorney general of Minnesota is already investigating whether debt collectors have used fraudulent paperwork in court.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

Weekly Audit: A Progressive Deficit Fix?

by Lindsay Beyerstein, Media Consortium blogger

The co-chairs of the 18-member deficit commission issued a preliminary presentation two weeks ago that favored tax breaks for the wealthy and left open the possibility of deep cuts to Social Security, Medicare and other social programs. But there’s still time for the commission to radically reshape its message before it issues its final report.

Jan’s plan

That’s exactly what progressive Rep. Jan Schakowsky (D-IL) is trying to bring about. Schakowsky is a member of the commission and she has an alternative, progressive plan to rein in the deficit, as David Moberg reports for Working in These Times:

It would not go into effect until 2015 or after unemployment subsides, and it provides for $200 billion of job-creating investments during the next two years, in addition to reducing the deficit by $441 billion in 2015, nearly double Obama’s target. Slightly more than a third of Schakowsky’s proposed deficit reduction would come from new revenue (mostly tax changes hitting the wealthy and corporations but also from cap-and-trade carbon emission controls), 30 percent from ending or reforming tax expenditures (again, mainly benefiting rich taxpayers), a quarter from defense cuts, and 9 percent from mandatory programs (like offering a public option for health insurance and requiring Medicare to bargain over drug prices). Though Social Security does not contribute to the deficit, Schakowsky plans to secure future payouts without benefit cuts by increasing how much the wealthy pay into the retirement program.

A public option for health insurance would keep rising health care costs in check because insurers would have to compete with non-profit, government-administered insurance. Instead of cutting Social Security benefits for the needy, Schakowsky would simply eliminate the arbitrary payroll tax ceiling on high earners. Sounds like common sense, doesn’t it?

A coalition of progressive groups calling itself Our Fiscal Security unveiled its own alternative proposal for cutting the deficit on Monday, Luke Johnson reports for the Colorado Independent. Key planks of the platform include repealing the Bush tax cuts, reinstating the estate tax for married couples with assets greater than $4 million, and capping itemized deductions at 15%. Coalition members include Demos, the Century Foundation, and the Economic Policy Foundation.

Generation Recession

Young adults have the highest unemployment rate of any demographic. At the National Radio Project, Rina Palta examines the impact of joblessness on the nation’s 80 million “Millennials.” (Audio) Palta talks to young people who are weathering their first layoffs mere weeks or months after landing their first professional jobs.

Mark Kirk: Tax Cuts for the Rich “No Matter What”

The day before 2.5 million Americans stand to lose their unemployment benefits, Sen. Mark Kirk (R-IL) went on TV to insist that unemployment insurance is misguided and that the government must cut taxes for the rich “no matter what,” Julianne Escobedo Shepherd reports in AlterNet.

Oddly enough, Kirk fancies himself a moderate by Republican standards, according to Steve Benen of the Washington Monthly. Kirk believes that extending unemployment insurance would “just add to the deficit.” In fact, as Benen notes, extending unemployment benefits would be a very efficient way to infuse billions of dollars into the economy. Unemployed people will spend their extended benefits on food, gas, rent, and other necessities. That money doesn’t just disappear into the ether, it feeds local businesses, who in turn keep other Americans working.

The Republican Party line is that the rich need tax cuts because they create jobs. If tax cuts for the rich created jobs, we should already have a full employment economy. As the Bush tax cuts are set to expire, taxes for the rich are at all time lows and unemployment is at historic highs. It is crazy to assume that allowing these tax cuts to continue will magically produce jobs that have yet to materialize, or even bring back the jobs that have disappeared since the Bush tax cuts went into effect.

Ireland’s Billion Dollar Bailout

Over the weekend, the world’s financial institutions agreed to spend $90 billion to bail out Ireland. Tim Fernholz of TAPPED worries that this sum is too small to bring Ireland back from the brink of its sovereign debt crisis. He argues that the world financial community is making the same mistake it made in the 1990s when it forced debtor nations into fiscal austerity without forcing creditor nations to restructure their loans on more sustainable terms.

Once again, bondholders are being spared while Irish taxpayers are being expected to shoulder the heaviest burdens. The economic argument for saving the bondholders is that a bond is an ironclad promise, and that if you start expecting bondholders to accept less than 100% of what was promised to them (no matter how ill-advised they were to take that promise), the entire system will fall apart. It’s ironic that the promises that governments make to their citizens are endlessly renegotiable while bond deals are ironclad. Worldwide, citizens outnumber bondholders. Having citizens lose faith in their government seems far more dangerous than expecting bondholders to take a haircut.

 

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

Weekly Audit: Will Obama Save Homeowners From Wall Street’s Latest Fraud Scheme?

by Zach Carter, Media Consortium blogger

A massive foreclosure fraud scandal is rocking the U.S. mortgage market. Wall Street banks and their lawyers are fabricating documents, forging signatures and lying to judges—all to exploit troubled borrowers with enormous, illegal fees, and in some cases, improperly foreclose on borrowers who haven’t missed any payments.

The fraud is so widespread that it could put some big banks out of business and even spark another financial collapse. Fortunately, things haven’t fallen apart just yet. With strong leadership from President Barack Obama and Congress, the government can help keep troubled borrowers in their homes and prevent another meltdown.

One fraud begets another

As Danny Schecter emphasizes in an interview with GRITtv’s Laura Flanders, this mess is just one element of a broader, criminal fraud at the heart of the foreclosure fiasco and resulting financial crisis. Banks pushed fraudulent loans onto borrowers during the housing bubble because the loans could be packaged into mortgage-backed securitizations and pawned off on hedge funds and other banks. Banks made a lot of money from this process, until the mortgages went bad and the fraud-packed securities plummeted in value.

Document drama

At the heart of any mortgage is a document called “The Note”, which lays out the terms of the mortgage and the kinds of fees that banks can levy against borrowers if they fall behind on their payments. Owning the note also gives banks the right to foreclose when a borrower stops paying.

The trouble is, in an effort to cut costs and boost bonuses, banks haven’t kept actually kept track of the note—in fact, they’ve actively destroyed the document so they don’t have to deal with filing it. Now that mortgages are going bad, banks are taking advantage of the documentation vacuum they created to levy massive, illegal fees on borrowers both before and during the foreclosure process. They do this by manufacturing fake documents, forging signatures, and getting bogus signatures from notaries to approve sham documents.

This is all terribly unfair to borrowers. In some cases, illegal fees push borrowers over the edge into foreclosure, while in others, borrowers get saddled with tens of thousands of dollars in illegal fees after getting kicked out of their home. The situation is a national disgrace.

Failure to produce

But the situation also creates legal liabilities that can push banks into failure. If banks can’t pony up the note, they don’t have the right to foreclose—not without some serious, expensive legal maneuvering. And what’s more, if the banks who created these shoddy securities can’t supply notes, investors who bought the securities can force losses back on the banks that created them. Given that there are $2.6 trillion in mortgage-backed securities out there, banks are very worried that losses and lawsuits stemming from shoddy documentation could spark another round of major financial turmoil.

The sheer lack of documentation makes it very difficult for investors to decipher which banks are exposed to loads of red ink, and which banks are not. That’s a recipe for financial panic.

Silencing employees

The banks know they’re in serious trouble. That’s why, as Andy Kroll notes for Mother Jones, mortgage servicers like GMAC are trying to silence employees who can testify about the extent of these frauds. GMAC employee Jeffrey Stephan confessed to robo-signing 10,000 foreclosure documents every month without actually examining them. His acknowledgment sparked the current public scrutiny of foreclosure fraud, which has expanded to banks including JPMorgan Chase and Bank of America.

Kroll was one of the first to report on these fraudulent foreclosure mills and their illegal fees, and his coverage of the issue is essential reading for anybody following the unfolding crisis. Kroll also highlights the wave of new investigations and inquiries being launched by attorneys general in eight states, a phenomenon that is likely to expand as the crisis widens.

As Annie Lowrey details for The Washington Independent, one of those states is Ohio, where Attorney General Richard Cordray is suing GMAC, seeking $25,000 in damages for every fraudulent document the company has filed. In Ohio alone, there have been 190,000 foreclosures over the past two years.  Cordray hasn’t won his suit, and not every foreclosure will include fraud, but that’s a potential loss of over $7 billion to GMAC from foreclosures in Ohio alone over the past two years. And that doesn’t include what would be much higher losses to banks who packaged the mortgage securities, who are forced to repurchase them by burned investors.

Banks are doing their best to minimize the appearance of scandal, but the scope of potential losses from outright fraud is quite clearly a threat to the viability of the financial system. It’s easy to imagine a disaster scenario in which the government has no choice but to take major action to prevent the economy from imploding (yes, it can actually get worse).

Obama needs to pick up the slack

So far, President Obama is sending mixed signals about his intentions. As Steve Benen notes for The Washington Monthly, Obama vetoed a bill that would have made it harder for borrowers to show that banks were engaging in fraud during the foreclosure process. That was on Friday—but by Sunday, top Obama adviser David Axelrod was telling the press that the administration was not ready to support a foreclosure moratorium, dismissing the fraud crisis as a set of “mistakes” with lender “paperwork.”

As I note for AlterNet, Axelrod’s comments are a complete mischaracterization of what’s going on in the foreclosure process, and of what can be done. The housing market is a mess because banks have been systematically committing fraud. We cannot rely on such fraudsters to fix the mess– some kind of government action is going to be necessary. Whatever the solution, the administration cannot stand with big Wall Street banks against the borrowers and investors that are being defrauded. Any solution must take the interest of troubled borrowers as paramount. We’ve already tried saving the banks without saving homeowners, and as the unfolding foreclosure fraud crisis illustrates, it didn’t work.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: Will Obama Save Homeowners From Wall Street’s Latest Fraud Scheme?

by Zach Carter, Media Consortium blogger

A massive foreclosure fraud scandal is rocking the U.S. mortgage market. Wall Street banks and their lawyers are fabricating documents, forging signatures and lying to judges—all to exploit troubled borrowers with enormous, illegal fees, and in some cases, improperly foreclose on borrowers who haven’t missed any payments.

The fraud is so widespread that it could put some big banks out of business and even spark another financial collapse. Fortunately, things haven’t fallen apart just yet. With strong leadership from President Barack Obama and Congress, the government can help keep troubled borrowers in their homes and prevent another meltdown.

One fraud begets another

As Danny Schecter emphasizes in an interview with GRITtv’s Laura Flanders, this mess is just one element of a broader, criminal fraud at the heart of the foreclosure fiasco and resulting financial crisis. Banks pushed fraudulent loans onto borrowers during the housing bubble because the loans could be packaged into mortgage-backed securitizations and pawned off on hedge funds and other banks. Banks made a lot of money from this process, until the mortgages went bad and the fraud-packed securities plummeted in value.

Document drama

At the heart of any mortgage is a document called “The Note”, which lays out the terms of the mortgage and the kinds of fees that banks can levy against borrowers if they fall behind on their payments. Owning the note also gives banks the right to foreclose when a borrower stops paying.

The trouble is, in an effort to cut costs and boost bonuses, banks haven’t kept actually kept track of the note—in fact, they’ve actively destroyed the document so they don’t have to deal with filing it. Now that mortgages are going bad, banks are taking advantage of the documentation vacuum they created to levy massive, illegal fees on borrowers both before and during the foreclosure process. They do this by manufacturing fake documents, forging signatures, and getting bogus signatures from notaries to approve sham documents.

This is all terribly unfair to borrowers. In some cases, illegal fees push borrowers over the edge into foreclosure, while in others, borrowers get saddled with tens of thousands of dollars in illegal fees after getting kicked out of their home. The situation is a national disgrace.

Failure to produce

But the situation also creates legal liabilities that can push banks into failure. If banks can’t pony up the note, they don’t have the right to foreclose—not without some serious, expensive legal maneuvering. And what’s more, if the banks who created these shoddy securities can’t supply notes, investors who bought the securities can force losses back on the banks that created them. Given that there are $2.6 trillion in mortgage-backed securities out there, banks are very worried that losses and lawsuits stemming from shoddy documentation could spark another round of major financial turmoil.

The sheer lack of documentation makes it very difficult for investors to decipher which banks are exposed to loads of red ink, and which banks are not. That’s a recipe for financial panic.

Silencing employees

The banks know they’re in serious trouble. That’s why, as Andy Kroll notes for Mother Jones, mortgage servicers like GMAC are trying to silence employees who can testify about the extent of these frauds. GMAC employee Jeffrey Stephan confessed to robo-signing 10,000 foreclosure documents every month without actually examining them. His acknowledgment sparked the current public scrutiny of foreclosure fraud, which has expanded to banks including JPMorgan Chase and Bank of America.

Kroll was one of the first to report on these fraudulent foreclosure mills and their illegal fees, and his coverage of the issue is essential reading for anybody following the unfolding crisis. Kroll also highlights the wave of new investigations and inquiries being launched by attorneys general in eight states, a phenomenon that is likely to expand as the crisis widens.

As Annie Lowrey details for The Washington Independent, one of those states is Ohio, where Attorney General Richard Cordray is suing GMAC, seeking $25,000 in damages for every fraudulent document the company has filed. In Ohio alone, there have been 190,000 foreclosures over the past two years.  Cordray hasn’t won his suit, and not every foreclosure will include fraud, but that’s a potential loss of over $7 billion to GMAC from foreclosures in Ohio alone over the past two years. And that doesn’t include what would be much higher losses to banks who packaged the mortgage securities, who are forced to repurchase them by burned investors.

Banks are doing their best to minimize the appearance of scandal, but the scope of potential losses from outright fraud is quite clearly a threat to the viability of the financial system. It’s easy to imagine a disaster scenario in which the government has no choice but to take major action to prevent the economy from imploding (yes, it can actually get worse).

Obama needs to pick up the slack

So far, President Obama is sending mixed signals about his intentions. As Steve Benen notes for The Washington Monthly, Obama vetoed a bill that would have made it harder for borrowers to show that banks were engaging in fraud during the foreclosure process. That was on Friday—but by Sunday, top Obama adviser David Axelrod was telling the press that the administration was not ready to support a foreclosure moratorium, dismissing the fraud crisis as a set of “mistakes” with lender “paperwork.”

As I note for AlterNet, Axelrod’s comments are a complete mischaracterization of what’s going on in the foreclosure process, and of what can be done. The housing market is a mess because banks have been systematically committing fraud. We cannot rely on such fraudsters to fix the mess– some kind of government action is going to be necessary. Whatever the solution, the administration cannot stand with big Wall Street banks against the borrowers and investors that are being defrauded. Any solution must take the interest of troubled borrowers as paramount. We’ve already tried saving the banks without saving homeowners, and as the unfolding foreclosure fraud crisis illustrates, it didn’t work.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

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