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| | Price Controls and Shortages |
 | | It is a price control that prevents the price of a scarce good from being raised by the self-interest of the buyers and sellers to its free-market level and thus reducing the quantity of the good demanded to equality with the supply of the good available. | | | Rising prices as a chronic social problem are a consequence of governments overthrowing the use of gold and silver as money and putting in their place unbacked paper currencies and checking deposits whose quantity can be increased without limit and virtually without cost. | | | Furthermore, in the absence of a price control, any build-up of supplies for sale in the future would simply be accompanied by a rise in prices in the present, which would prevent the appearance of a shortage, as we have seen repeatedly in previous discussion. |
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http://www.fee.org/vnews.php?nid=797
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| | Price Controls, by Hugh Rockoff: The Concise Encyclopedia of Economics: Library of Economics and Liberty |
| | Price controls may limit these costs of disinflation by prohibiting wage increases that are out of line with the new trends in demand and prices. | | | Resources follow prices, and supplies tend to rise in the uncontrolled sector at the expense of supplies in the controlled sector. | | | The true price of gas, which included both the cash paid and the time spent waiting in line, was often higher than if prices were not controlled at all. |
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http://www.econlib.org/library/Enc/PriceControls.html
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| | Incomes policy - Wikipedia, the free encyclopedia |
| | This is seen as internalizing the external cost of raising prices and/or wages, solving a market failure that encourages inflation. | | | (The name arises because this involves control over incomes.) Many or most macroeconomists oppose the use of these controls since they interfere with the price mechanism, encouraging inefficiency : they lead to shortages and declines in the quality of goods on the market, while requiring large government bureaucracies for their enforcement. | | | One variant is "tax-based incomes policies" (TIPs), where a government fee is imposed on those firms that raise prices and/or wages more than the controls allow. |
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http://en.wikipedia.org/wiki/Incomes_policies
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| | Price controls can be lethal - The Washington Times: Commentary |
| | If the price of the drug is not sufficiently high to cover the cost of the original investment, the company will not have the funds for research and development of other lifesaving drugs. | | | The correct solution to high drug prices is to enable low-income people to buy necessary drugs and to institute tort reform to lessen the rapacious activities of trial lawyers who are unnecessarily driving up costs. | | | Threatening the industry with price controls or imports from parasitic countries scares away needed financial investment and talent. |
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http://www.washtimes.com/commentary/20031028-083515-6228r.htm
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| | Price Controls |
| | Price controls are usually justified as a way to help consumers, but whether they actually do is open to doubt. | | | The role of price in allocating resources is even more clear when there is massive restriction on markets and prices. | | | Those planning to abandon (which is illegal) try to maximize their cash flow by cutting or eliminating maintenance and by not paying taxes. |
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http://ingrimayne.saintjoe.edu/econ/AllocatingRationing/PriceCeilings.html
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| | Price Controls Do Not Control Prices |
| | The dynamics of price controls are misunderstood, even by economists. | | | Last year, however, prices were allowed to reflect not only the sudden decline in supplies, but also the uncertainty that gripped the oil markets. | | | Long-term price controls have forced up prices in other markets as well. |
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http://www.libertyhaven.com/theoreticalorphilosophicalissues/economics/economicissues/pricecontrols.html
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| | Price Controls, Unemployment, and World Hunger by Thomas Sowell -- Capitalism Magazine |
| | Controls that keep prices from falling to the level they would reach in response to supply and demand include not only agricultural price supports like those in India but also minimum wage laws, which are equally common in countries around the world. | | | Conversely, price controls imply chronic surpluses or shortages -- depending on whether price controls keep prices from falling to the level they would reach under supply and demand or keep them from rising to that level. | | | Just as an artificially high price for wheat set by the government leads to a chronic surplus of wheat, so an artificially high price for labor set by the government leads to a surplus of labor -- better known as unemployment. |
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http://www.capmag.com/article.asp?ID=3771
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| | Price Controls |
| | If a price ceiling is enacted, most commonly with rent control or the price of bread in developing countries, then it causes the opposite problem. | | | This means that the minimum wage, rent control, agricultural price supports and gas price controls are all going to alter the basic ability to buy and sell goods. | | | If I were a real estate developer when the price of rent is dictated to be low, I would rather build housing somewhere I could sell it for a higher price, like the suburbs. |
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http://www.neo-libertarian.com/pricecontrols.html
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| | MacAddict Forums / price controls in emergencies |
| | But there's a difference between a price change effected by market forces--which are the result of changes in demand and supply--and a price change by government fiat. | | | If you're so sure that, even under price controls, there'll be enough food to go around, then there's no need to worry about food being priced out of the range of the poor: If the merchant has food available to sell to everyone, he'll make more money by making sure he sells to everyone. | | | A price is the point where consumers' willingness to pay and suppliers' willingness to sell meet. |
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http://www.macaddict.com/forums/topic/48038/3
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| | Capitalists Unite |
| | The main problem with price controls is the difference between "price" and "cost". | | | Controlling prices will not control costs- it has to go the other way around. | | | Prices cover costs; they are not incosequential little details we can simply wave away through government fiat. |
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http://capitalistsunite.blogdrive.com/archive/31.html
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| | Rationing Health Care: Price Controls Are Hazardous to Our Health: Publications: The Independent Institute |
| | Had price controls not been instituted by the government, a market-clearing would have occurred wherein the price of gasoline would have gone up as the quantity of gasoline demanded met the quantity supplied. | | | There is a strong emotional attraction for price controls as a way for the government “to do something.” However, well-intentioned motives are not enough it is only results that count and whether the consequences from government action are beneficial to the public, especially the disadvantaged, or not. | | | The negative effect of price controls and global budgets can also be seen in the United States, in health care systems dominated by government mandates, such as the Department of Veterans Affairs’s medical system. |
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http://www.independent.org/publications/article.asp?id=1201
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| | abc7news.com: New Price Controls |
| | Although rates in California have plummeted to less than a tenth the price of a month ago — when prices were 10 times as high as in 1999 — the FERC move expands existing controls on the state and region's wholesale electricity prices. | | | Democrats are pushing for temporary fixed price caps, with a ceiling price based on the cost of generating power plus a modest profit. | | | Ratepayers in the West seek price relief for wholesale electricity to prevent power costs from soaring this summer. |
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http://abclocal.go.com/kgo/news/061801_nw_power_ferc.html
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| | Commanding Heights : Nixon Tries Price Controls on PBS |
| | That would, it was thought, solve the inflation-employment dilemma, for such controls would allow the administration to pursue a more expansive fiscal policy -- stimulating employment in time for the 1972 presidential election without stoking inflation. | | | The public felt that the government was coming to its defense against the price gougers. | | | Government officials were now in the business of setting prices and wages. |
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http://pbs.org/wgbh/commandingheights/shared/minitextlo/ess_nixongold.html
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| | History and Analysis -Crude Oil Prices |
| | The obvious result of the price controls was that U.S. consumers of crude oil paid about 50 percent more for imports than domestic production. | | | By mid-year the non-OPEC members were restoring their production cuts but prices continue to rise and U.S. inventories reached a 20-year low later in the year. | | | Spot prices for the U.S. benchmark West Texas Intermediate were down 35 percent by the middle of November. |
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http://www.wtrg.com/prices.htm
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| | NCPA Health Care - Price Controls |
| | Hospitals there are among the financially sickest in the nation as a result of state price controls, a federally-backed building spree, huge amounts of debt, no money to pay the bills and fewer patients staying shorter periods. | | | "Price controls tend to become a vehicle for health care rationing." The tendency is to set the price too low, in order to control spending. | | | The state's price control system allows hospitals to jack up patient prices in the early years of a construction loan -- thereby encouraging hospitals to build more and more unneeded facilities. |
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http://www.ncpa.org/~ncpa/w/w30.html
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| | An Ancient Fallacy: Price Controls by Thomas Sowell -- Capitalism Magazine |
| | Some oil wells that will repay their costs and earn a profit when the price of oil is $25 a barrel will not cover their costs when the price is $15 a barrel. | | | Hawaiian politicians have the best of all worlds with immediate credit for price controls and a postponement of the consequences till after they are re-elected. | | | Whenever and wherever government controls have been put into effect to hold down prices, the most common consequence has been a reduction in the quantity supplied. |
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http://www.capmag.com/article.asp?ID=1684
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| | Price Controls Can Be Deadly, by Jacob Hornberger |
| | The artificially low price has a twofold effect: it causes supplies to be withheld from the market and it induces people to consume more than they ordinarily would. | | | Not only because of the long lines but also because a black-market price, which is the true free-market price, has formed in response to the government-set price. | | | When the federal government finally lifted its price controls here in the United States, the price quickly rose to the free-market level and the lines disappeared. |
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http://www.antiwar.com/orig2/hornberger121403.html
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| | Price Controls |
| | Recent history indicates that governments have fixed the price of gasoline, rent and the minimum wage, to name a few, with war usually the reason for general price controls. | | | While controls on prices normally distort allocation of resources, economists usually know how to produce a surplus or a shortage in order to fight inflation and eventually establish a stable economy. | | | It took many agencies to resolve disputes between workers and management, set price controls, and impose rationing on scarce commodities as part of the war effort. |
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http://www.u-s-history.com/pages/h1689.html
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| | Profits and Drugs |
| | Prices allow entrepreneurs to calculate; to make rational appraisals of current market data against their own judgment of future prices. | | | As Mises noted, prices are social phenomena brought about by the interplay of all the subjective valuations of the individuals participating in the market. | | | However, cost is not the driving force of prices. |
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http://www.mises.org/freemarket_detail.asp?control=309
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| | Cafe Hayek: More on Price Controls |
| | To prevent the price of some staple good (say, lumber) from rising to its market level in the wake of a natural disaster is to camouflage the underlying reality. | | | If the price of lumber is currently below its market-clearing level, the quantity of lumber demanded at that price will exceed the quantity of lumber supplied at that price. | | | I agree with you that price is based on supply and demand but there is also such a thing as just being greedy. |
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http://cafehayek.typepad.com/hayek/2004/12/more_on_price_c.html
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| | excerpts from MAKING ECONOMIC SENSE |
| | Stein knew as well as I did that price controls were disastrous and counter- productive, but I and others like me had not done a good enough job of educating the American public, and so the Nixon Administration had been "forced" by public pressure to impose the controls anyway. | | | Health care prices have risen faster than inflation. | | | Grayson warns that, already 24% of U.S. health care is spent on administrative costs, largely imposed by government. |
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http://www.freedomkeys.com/pricecontrols5.htm
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| | EconLog, Price Controls Archives: Library of Economics and Liberty |
| | I would add that laws against price gouging also reduce the incentives for businesses to maintain inventories of supplies in anticipation of possible storms. | | | Jonathan Oberlander and Jim Jaffe think that drug price controls are on the horizon. | | | When the stores are empty because there were no price signals to protect supplies or to create an increase in them, what does a family desperately in need of a generator or propane lanterns think of the laws that they were told were intended to shield them from avaricious businesses? |
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http://econlog.econlib.org/archives/price_controls
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| | commentaryBA |
| | Preemptive selling should not be confused with price volatility or rate of change, which are measures of rapid price fluctuation. | | | There is a clear reduction in the price of gold after the first incidence of counter trend selling by 0.5% in excess of three standards deviations. | | | In a freely traded market, selling events in one price declining epoch should be similar to selling events in other price declining epochs. |
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http://www.goldensextant.com/commentaryBA.html
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| | Bruce Bartlett: Gasoline price controls would be a disaster |
| | His proposal would require oil companies to justify price increases and regulate their profits in the state. | | | Bustamante is really concerned about gasoline prices, he should look at California’s 50.8-cent per gallon gasoline tax—4th highest in the U.S. Bruce Bartlett is a senior fellow at the National Center for Policy Analysis, a TownHall.com member group. | | | Bustamante proposed amending the California state constitution to allow the Public Utilities Commission to regulate gasoline prices. |
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http://www.townhall.com/columnists/brucebartlett/bb20030902.shtml
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| | Price controls and tuition - The Washington Times: Editorials/OP-ED |
| | McKeon denies that he is proposing price controls. | | | Colleges and universities must continue to seek sensible ways to control their costs. | | | Together, we must seek new ways to control costs and ensure that families can make informed decisions. |
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http://www.washtimes.com/op-ed/20031022-085631-2182r.htm
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| | Wage & Price Controls |
| | A free economy is one that allows individual businesses to set not only the prices on the goods and services they sell, but also the wages they pay to the workers they employ. | | | Specifically, it looks at which products have prices set by the government, whether the government controls such things as utilities, and whether the government has a minimum wage policy or sets other wages. | | | The extent to which government price controls are used |
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http://www.gomainst.com/economicfreedom/09.htm
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| | Calblog: Price Controls on gas |
| | Gasoline exhibits low price elasticity of demand and the *wholesale* provision of gasoline has extremely high barriers to entry. | | | Low prices encourage excess consumption, and investments based on artificially low price. | | | Cal has no control over component costs, e.g. |
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http://www.calblog.com/archives/002683.html
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| | wage and price controls on Encyclopedia.com |
| | Record steel prices but tempered by record prices for raw materials led to the inevitable themes of China and Consolidation dominating discussions at the... | | | America's most controversial peacetime experiment with an incomes policy was during the period 1971-74, when inflation was fueled by the costs of the Vietnam War, the 1973 oil embargo, and the later quadrupling in the world price of oil by the Organization of Petroleum Exporting Countries (OPEC). | | | economic policy measure in which the government places a ceiling on wages and prices to curb inflation. |
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http://www.encyclopedia.com/html/w1/wageN1pri.asp
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| | TCS: Tech Central Station - Study: Price Controls Harm Patients |
| | The study's first step is to establish that price controls exist abroad, and that they reduce revenues that our drug companies otherwise would acquire. | | | The chapter describing the price controls presents a veritable rogues gallery of intrusive government practices. | | | If foreign price controls suppress innovation and harm the health of our citizens, then importing those price controls will do so as well. |
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http://www.techcentralstation.com/122204G.html
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| | Price Controls |
| | Section 340B of the Public Health Service Act sets price controls for pharmaceuticals purchased by certain government agencies and to certain grantees of Federal agencies. | | | Pricing, reimbursement and cost containment policies in Spain, 1999. | | | Current Standard Pharmaceutical Pricing Agreement between the Department of Health and Human Services and Drug Manufacturers. |
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http://www.cptech.org/ip/health/pc
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| | JS Online: Price controls bad for consumers |
| | When it comes to the price of milk - or anything else - the broad interests of consumers, not the narrow interests of a group of retailers or producers, should rule, be it in Burlington, Vt., or Burlington, Wis. | | | In Badgerland, bureaucrats in Madison actually have the power to tell retailers the lowest price they can charge for gasoline, cigarettes, milk and a host of other products. | | | Because the New England compact covers several states, it required Congressional approval, which expires next month. |
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http://www.jsonline.com/bym/your/aug01/lankcol19081801a.asp
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| | Nixon Imposes Wage and Price Controls |
| | Compounding the situation were such events as Fed Chairman Arthur Burns and the Committee on Interest and Dividends (part of the controls apparatus) strenuously opposing banks attempting to raise the U.S. prime rate from 6% to 6.25% in February 1973. | | | In 1971, the U.S. was also in the process of leaving the gold standard, which was intended to allow the value of the U.S. dollar to fall. | | | The wage and price controls were mostly dismantled by April, 1974. |
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http://www.econreview.com/events/wageprice1971b.htm
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| | Article Price controls stifle drug development |
| | Late last month, when European health ministers were being advised of the importance of drug pricing freedom, the House approved a bill on drug reimportation by a whopping margin, 243-186. | | | Reimportation would allow Americans to purchase pharmaceuticals from nations like Canada where governments fix drug prices. | | | After careful study of the continent's price controls, the EU feels Europeans pay too little for their drugs. |
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http://www.manhattan-institute.org/html/_chicsuntimes-price_controls.htm
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| | Brayden King: Privatization and price-controls |
| | Privatization will not only lead to higher prices, more fiscal pressure on the government, and hence a greater tax burden on all of us. | | | (Recall that the original Medicare act forbid the federal government from exercising control over the practice of medicine - try telling that to a doctor today.) Costs will soar as increased demand pushes up prices and more people are added to the program and when this happens the public will demand controls. | | | What really depresses me, however, is not the subsidies (which are mostly transfers) but that we are now on an inevitable path towards price controls on pharmaceuticals. |
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http://www.braydenking.com/weblog/archives/000063.html
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| | NCPA - Regulation Issues - Why Price Controls Fail |
| | Price controls discourage conservation because they destroy the only viable mechanism which encourages consumers to cut back usage -- high prices. | | | NCPA - Regulation Issues - Why Price Controls Fail | | | In a futile attempt to solve one problem, price controls distort other markets and crate additional problems. |
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http://www.ncpa.org/pd/regulat/pd062101a.html
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| | USATODAY.com - Enact price controls |
| | • A national health care system, similar to those in other industrialized countries, could cut costs by setting prices, paying all bills and reducing overhead. | | | Proposal: The government could exercise its power as a regulator and the largest purchaser of medical services to drive down costs. | | | For example, drug prices could be reduced by allowing lower-cost imports or changing patent laws to shorten a company's monopoly on a medicine. |
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http://www.usatoday.com/news/nation/2004-10-04-price-controls_x.htm
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| | Saddam Hussein - Wikipedia, the free encyclopedia |
| | In dealing with Shiites, Kurds, Communists, and other likely regime opponents, the government tended either to provide them with benefits so as to co-opt them into the regime, or to take repressive measures against them. | | | A year later, world oil prices rose dramatically as a result of the 1973 world oil shock, and Saddam was able to pursue an all the more ambitious agenda through skyrocketing oil revenues. | | | Kuwait was pumping large amounts of oil, and thus keeping prices low, when Iraq needed to sell high-priced oil from its wells to pay off a huge debt. |
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http://en.wikipedia.org/wiki/Saddam_Hussein
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