Free Markets, Free People

Culture


King Eddie’s Funeral (Updated)

Let me clarify something in the previous post.  Some commenters are saying that they don’t understand how government will allow private money to be created, and relinquish the death hold they want to keep on the economy.  The short answer is, I don’t think they’ll have a choice.  We’ll concentrate  on the US here, but keep in mind that the rest of the developed nations are in even worse shape than we are.

What allows the government–any government, but democratic ones in particular–to operate as they do is the consent of the people.  Even totalitarian governments have to worry about that, ultimately, although they can keep the lid on for a time, even for a couple of generations. But even totalitarian regimes often run into explosions which topple them, eventually.

But the loss of faith in a liberal, democratic government is the kiss of death for that government.  It doesn’t take a full scale revolution.  it just takes people to stop cooperating.  India was liberated through non-violent action.  So was South Africa.  nce the people say, “You’re done.” the government is done.

Right now our economic system is built on nothing more than the “full faith and credit” of the US Government.  And that will last only as long as we, the people, have faith in it.

Now this particular recession may not be the one that kills that faith.  It may be just one of the warning signs of a coming collapse.  But a crash is coming, and, I think sooner, rather than later.  We cannot continue indefinitely to fund the spending of the richest country on earth with the savings of one of the poorest.

Consider:

The total debt and future obligation of the US government now exceeds, by a substantial percentage, the total with of the country’s assets.  We have a mountain of debt and payment obligations that exceeds our ability to  meet, even if we were able to liquidate the entire country.

If we wish to retire those obligations we have essentially two alternatives:  We can repudiate them, or we can pay them off through hyperinflation, which, as a practical matter, amounts to the same thing.

For instance, let’s take social security and medicare.  We simply don’t have enough money to pay those obligations.  We can slash benefits, or eliminate cost of living increases, which is nothing more than  repudiating the debt.  We can raise the payroll tax to 30% or more, but that will slow economic growth so much that the increase in revenue will be more than offset by the increased unemployment  and slower GDP growth that would result, which would make it even more difficult to pay off other obligations, such as Treasury Bonds.  Or we can simply print the money, and pay off the paper obligation with money that has signifigantly less purchasing power than the face value of the obligation.

However we go about it, it amounts to a repudiation of all or part of our obliations, and reveals that the government is both faithless and, as investors take note of the repudiation and decide not to buy government paper any more, creditless as well.  What paper they have, they will attempt to unload on any idiot stupid enough to take them.

The dollar will collapse to the point that imported goods, even cheap, shoddily made Chinese ones, might as well be made of unobtainium.

The life savings of million upon millions of Americans will evaporate overnight.

There will be serious hardship, and massive unemployment.

That’s the kind of hardship I’m talking about.

So, how much trust will there be in a government who, after all that, comes back and says, “We’ve learned our lesson.  Trust us now.  It’ll all be different this time.” among a people who’ve watched the government repudiate all of the promises made over the last 70 years?

And how much more will this be true if there is a feasible, private alternative, consisting of hundreds, perhaps thousands of independent sources of money, and credit?  One whose reliability can be publicly judged every minute of every day, and which has no coercive power?

It wouldn’t take a revolution to force the government out of the money and economics business.  Or the retirement or health care business.  All it will take is a lack of trust. Who will want to do business with an entity that has utterly failed to deserve any trust?

The collapse itself will be the revolution.

UPDATE:  By the way, the government’s repudiation of its obligations has already begun, in regards to Social Security.  If you are in my age cohort or younger, you are not allowed to retire at age 65.  Your retirement age is now 72.  The government changed the deal.  For us, we have to wait an additional 7 years to begin collecting our benefits.  Those of us who do not die before age 72, that is.

That wasn’t the deal we had when we started our working lives.  The government unilaterally changed the terms of our Social Security compact.  They didn’t call it “repudiation” but, that’s certainly what it was.


Dead Ed, the Collapse, and eBay Saves Us All

My first reaction to Pres. Obama’s speech last night was depression.  Here were the Democrats giving the president standing O’s for completely converting the Republic into a social democracy.  I mentioned that on Facebook, and one of my readers said it reminded him of Amidala’s line from Star Wars Episode III:  “So this is how liberty ends…with thunderous applause.”

But on more careful review, I find that I am not, in fact, depressed over the long-term.  Indeed, last night’s speech seems to me not to herald the beginning of a new era for big government and socialism, but rather the last gasp of a dying ideology.

We are, I think, at the cusp of a new era, but it isn’t the one that Pres. Obama and his acolytes in the Congress are thinking it is.  Neither the Democrats nor the Republicans, it is clear, have any idea about what is happening.  Very few people do.  I am going to try and explain something very complicated, and do so very simply, and as briefly as I can.  So, with the realization that all simplifications are inevitably wrong in some particular, let me explain.

“Ed’s dead, baby.  Ed’s dead.”*

We stand now, I think, in a very historically similar position to the one described by Barbara Tuchman, in the beginning chapter of her monumental work on the outbreak of Word War I, The Guns of August:

20 May 1910:  The past passes in review

20 May 1910: The past passes in review

So gorgeous was the spectacle on the May morning of 1910 when 9 kings rode in the funeral of Edward VII of England that the crowd, waiting in hushed and black-clad awe, could not keep back gasps of admiration. In scarlet and blue and green and purple, 3 by 3 the sovereigns rode though the palace gates, with plumed helmets, gold braid, crimson sashes, and jeweled orders flashing in the sun. After them came 5 heirs apparent, 40 more imperial or royal highnesses, 7 queens, and a scattering of special ambassadors from uncrowned countries. Together they represented 70 nations in the greatest assemblage of royalty and rank ever gathered in one place and, of its kind, the last. The muffled tongue of Big Ben tolled 9 by the clock as the cortege left the palace, but on history’s clock it was sunset, and the sun of the old world was setting in a dying blaze of splendor never to be seen again.

Four years later, the world order of 1815-1914 was drowned in fire and blood.  The Age of Royalty was over, and the Age of Democracy had begun.  I believe that Pres. Obama’s speech of last night may very well be the historical equivalent to Edward VII’s funeral.

Ever since it began in late 2007, a blog called Fabius Maximus has been arguing that we are watching the decline and fall–indeed, collapse–of our current economic and financial system.  A précis of the argument can be found here, and a more comprehensive archive can be found here.  Just as the black-clad crowds lining the streets of the capitol of the British Empire on the morning of May 20, 1910 might have found it inconceivable that their generation would witness the collapse of both the European geopolitical regime, and, ultimately, the British Empire itself, so it may be inconceivable to us that we are witnessing the collapse of the Post-WWII economic and political regime.  But I believe it is nevertheless true.

“MONEY! Doesn’t it make you feel good just to say that, Jerry?”

Let me start by explaining what money is.  Money is a medium of exchange, that is, it is an object of some kind that I can exchange for goods and service, rather than trying to barter with people to obtain what I need.  It may consist of elaborately carved cowry shells, tiny beads painstakingly stitched to strips of leather, round pieces of metal with the image of guys named Julius or Claudius hammered into them, or little pieces of high-quality paper that say “Federal Reserve Note” on them.

But whatever it is, money has certain minimal characteristics.  It must be convertible, i.e., if I do a job for you, I have to be willing to accept it as payment, and whoever I buy bread or clothes from has to be willing to accept it in exchange, too.  It also has to be difficult to replicate, so that when I accept it, I am reasonably assured that it is the genuine article.

Get 'em while they last.

Get 'em while they last.

For nearly all of recorded history “money” has been synonymous with gold or silver.  And right up till the late 18th century, it was more or les the perfect money.  It was intrinsically valuable, in that raw silver or gold was as easily convertible as hammered or minted coins.  It was also practically impossible to counterfeit, the best efforts of alchemist to convert dross into gold notwithstanding.  It was also relatively rare, and it difficult to obtain new supplies of it without intensive–and extremely expensive–mining operations.

Additionally, there simply wasn’t much to buy.  Most people grew their own food, produced their own clothes from flax or wool, and built their own houses by hand.  Money was essentially a luxury, and it bought mainly luxury goods for fat cats.  Kings could raise and equip armies with it.  Merchants could buy nice clothes. But for the most part, money was a tool for use by the rich, and by the relatively few urban dwellers.  And, as such, gold or silver was perfect for that level of economic activity.

By the 19th century, though, there were lots more things to buy, and lots more city dwellers, and that trend was increasing rapidly.  Hard money became…problematic.  The thing about having a hard currency based in gold or silver is that, at the end of the day, whether you run a fully convertible gold standard, or some sort of fractional reserve system, the size of the money supply is always constrained by the amount of gold or silver on hand.

If the economy takes off on a tear, it’s extremely difficult to expand the money supply to meet the demand.  When the supply dries up, the economy just shudders to a quick stop, because nobody has enough spare money to fund more expansion.  So the economy collapses until it reaches equilibrium with the available money supply, and the cycle starts again.  Look at a chart of US economic activity in the 19th century and you see it’s a system of booms and busts, which were far steeper than any we’ve seen since the depression.  So the fundamental problem with a gold standard is that it’s relatively inflexible when used by a vibrant, diverse economy.  When everybody needs gold, and the demand is unpredictable, gold is very difficult to use unless you’re willing to live with severe booms and busts.

The Great Depression was the death knell for the gold-based world economic system.  Those nations that jettisoned gold the fastest, recovered the most.  Of course, WWII intervened in the depression, so it took a decade or so to get back to the business of commerce–as opposed to the business of building things to kill Nazis.   But, by 1944, everyone–on the Allied side, at least–had recovered enough breathing room to meet at Bretton Woods, NH, and hammer out a new economic system.

What they came up with was a system of fiat currencies, all freely convertible in the FOREX market.

Now, governments could adjust their money supplies appropriately by printing more money or less of it, and taxing their populations more leniently or more severely, as needed.  This is the system most of us have grown up with…and it’s dying.

It’s dying because of something innate in human nature that the gold standard was better equipped to deal with:  the urge to loot the system.

It’s an urge that has always been there.  Sometimes it has been the result of intentional government action to cheapen the currency.  If you were, say, the king of Persia, you didn’t need to consult the priests of Ahura Mazda to know that if you changed from using 10 grams of gold per coin, to using only 9 grams per coin, you could stretch your gold supply by 10%.  You could then take the extra gold, and buy yourself a nice hat.  Or use the extra gold to make one.  Whatever.

Of course, people would notice this pretty quickly, and items that used to cost 9 gold pieces would cost 10 pieces–inflation!–but because gold had an intrinsic value, the same weight of gold could be exchanged.  It was still pernicious, of course, but because gold had an intrinsic value–and because the supply of gold was relatively inflexible–it wasn’t usually seriously pernicious.

Sometimes, the urge to loot the system has been done by private individuals, who figured out that if they shaved a bit off the edges of their gold pieces, they could accrue enough gold shavings to buy themselves a nice hat, too.  This, by the way, is why when we began minting coins instead of hammering them out. They were minted with milled edges, making shaving attempts immediately obvious.

By the 19th century, the looting attempts became widespread, populist movements, like the “Free Silver” movement.  At the time, gold was real money.  If you took a bunch of gold to a Minting facility, the mint would return you an equal weight in gold coins–minus a nominal minting fee.  After huge silver deposits were discovered at places like the Comstock Lode, populist agitation began for minting silver in the same way, at a ratio of 20 ounces of silver for 1 ounce of gold.  The massive amount of silver floating around would, of course, have made this an extremely inflationary policy, and the farming and borrowing interests would have benefited by paying off bills for less than they had borrowed…enabling themselves to use the extra saving to buy a nice hat.

But during the First Age of Money, the looting was always constrained by the fact that gold had an intrinsic value, and that the supply of gold was inelastic.  There were, therefore built-in constraints to the looting impulse.

When the Bretton Woods Agreement launched the Second Age of Money, it solved the problem of the inelasticity of the money supply, and enabled monetary authorities to fine-tune the money supply in response to economic activity.  That was a good thing in the sense that it flattened–although did not eliminate–the business cycle fluctuations.

But the bad thing was that it completely removed any physical restraint on the money supply.  It depended on governments and monetary authorities to exercise self-restraint, rather than impersonal, externally imposed constraints.  The result has been 65 years of continually expanding credit, more or less constant inflation to a greater or lesser degree, and unrestrained spending and borrowing.

Governments–and their democratic (small “d”) constituencies quickly learned that they could loot the system.  Social insurance, medical care, military expansion…whatever the Big Idea of the minute was, we could have it.  And if we didn’t want to pay the taxes to the government to pay for it–and, mostly, we didn’t–we could simply borrow it.  We could obtain a whole bunch of little green pieces of paper now in exchange for a promise we’d pay back more little green pieces of paper sometime in the future.  In the meantime, we could buy all the hats we wanted!

But now, we are obligated to pay back various people about fifty trillion pieces of green paper.  Unfortunately, the entire household worth of everyone in the country is worth about forty trillion pieces of green paper.

How can the current economic and financial system possibly be considered solvent at this point?  How will re-expanding the cycle of debt re-invigorate it?

No, we’ve had our fun.  We got to loot the system for 65 years.  Now, the hat bill is coming due.

I suspect we’ll pay the hat bill the same way that Germany repaid their war reparations debt after WWI.  “Hey, you remember that reparations bill for 3 billion marks that we’re supposed to pay next week?  Yeah.  I just wanted to let you know that we’ve sent that order off to the printers, this week, and we should have that printed up for you by Tuesday.”

The result was massive hyperinflation, the collapse of credit, and 5 years of compete economic stagnation, serious economic pain, severe unemployment…and the ability to start over in the mid-20s with a clean balance sheet.  Clean enough, in fact, that by 1936 Germany had more or less completely emerged from the Great Depression, while the employment rate in the United States hovered at around 18%.

What Pres. Obama is proposing may result in nothing more than additional spending that helps bring about the collapse of the Post-WWII economic regime, while at the same time providing–temporarily–a social safety net that will provide some help as we pass through a difficult transitional period.

“I was there at the dawn of the Third Age of Mankind…”

OK.  Maybe it’s not that grandiose, but I think we are seeing the dawn of the Third Age of Money.

No one in the government realizes how the economic world is changing.  So their proposed solutions are likely to be exposed over time as ineffective and, perhaps even counter-productive.  The credibility of governments around the world is now invested in staving off an economic collapse.   When their failures become evident, and their “solutions” are exposed as fantasies, that credibility will collapse.  Who will want to buy government bonds, or use worthless government money?  Who will trust the governments who lead us into the economic abyss?

Unfortunately, rather that realizing that we are entering a transition, and trying to discover how to shepherd us through that transition, they are invested in preserving the dying system of government-regulated money supply and credit.  And even if they realized that we were in a transitional period, they would still do nothing about it because it would require voluntarily releasing their power over the economy.

Governments have always been in charge of money; determining what money is, how it will be exchanged, how new money will be created, etc.  In part, this is traditional, in that only government had the resources and ability to fund and oversee mining and exploration activities, regulate what legal tender consisted of, and all of the other monetary functions.  There simply were no other large organizations in existence to perform those tasks.

It wasn’t until the 17th century that organizations began to emerge that could begin performing those tasks, and not until the 18th century that it became practical.  Private money of various types began to sprout up everywhere.  18th-century America was, for a time, replete every decent-sized bank issuing its own currency based on deposits.

Eventually, the Federal government cracked down on that private money, not so much from jealousy of the government’s role as the issuer of currency, but because private banks suffered from the same tendency to loot the system, issuing more and more inflated currency until it was worthless, and they ended up wiping out their depositors in the collapse as their obligations came due.  There were some solid money banks of course, but the spectacular failures of so many private currency attempts led the government to tax them so heavily that private currency issuance became uneconomic. Governments may not have been perfect, but the constraints of the gold system meant that they didn’t fail as completely and spectacularly as private banks did.

What was missing in private currency of the time, and what has been missing in the current post-WWII financial system is feedback.  Yes, there is some, but it takes a long time to filter into the monetary authority, and is derived indirectly from statistics on economic activity, rather than by any sort of direct observation.  The Fed raises interest rates today, for instance, and it takes around eight months to observe the indirect effects of the monetary policy change.   This is why the role of the Fed, has often been described as steering a car by looking through the rear-view mirror.  Based on seeing where you’ve been, you make decisions about where you must go.  That may be a form a feedback, but it is so separated in time from the inputs that it’s an inherently unstable system.

By the same token, what killed depositors in banks that issued private money was a lack of feedback.  It wasn’t possible to see that bankers were looting the system in time to withdraw your money.

We call this lack of feedback asymmetrical information.  We’ve never been able to even approach the ability to have full information about what a bank or government is doing that may affect the money supply, or economic activity as a whole.  We’ve never been able to see all sides of the story, as it were.  So, we’ve had to more or less leave it in the hands of government, simply because governments have been the only organizations with the size and scope to reduce, even partially, the problem of feedback.

So, it seems pretty hopeless, doesn’t it?  The financial world we’ve grown up with is collapsing under the sheer weight of looting.  If governments can’t do it, and a return to the gold standard can’t do it, then where are we?  At the edge of another dark age?

Not quite.

I foresee the rise of private money once again, and returning in such force as to negate the government’s role in the economy.  In fact, the pieces for creating the Third Age of Money are already there.

Your new ATM

Your new ATM

The Internet will be the platform for the new money.  But it’s just the platform; the communications media.  The actual objects that make up the Third Age of Money will almost be located in cyberspace.

First, there is encryption.  In the not-too-distant future, you will go online with a persona, i.e., an online identity with a unique, highly encrypted digital signature.  No more logging in with different user names and passwords at 100 different web sites.  Your persona will be uniquely identified as you through the use of 4096-bit or 8192-bit public key encryption.  Your persona will be impossible to forge or duplicate.  It will be unique.  Your “bank” and your “money” will be similarly encrypted.

Second, is your ATM/debit card.  It won’t be exactly the same, of course.  It will be far more secure, probably through the use of biological identification systems to verify authorization, such as retinal scans.  It will be linked directly to your persona’s bank account.

Third, is the ability of all the major banks and credit card companies to do online transactions, and to convert one system of private money to another at a publicly known exchange rate.  So, you can pay directly to your account–or withdraw from it–in Discover Dollars, or MasterBucks, or Credit Suisse Francs.  Or perhaps there might even be a universally acknowledged unit of currency–the “Credit”–that all the private companies agree to use.

But, the most important element of creating a reliable private money system that is resistant to looting the system is feedback. The reduction of asymmetrical information.  And that exists, too.  eBay has been using it for years.  Indeed, in no small way, the system implemented by eBay may be a key element of our future.

Imagine a system where, every time I do business with your persona, I rate your reliability, and it doesn’t matter of the persona is an individual or a bank…or a government.  Every day, millions of people who do transactions in MasterCard can rate the reliability and value of the MasterBucks system.  Private companies like Standard and Poors or Moody’s would not only rate MasterBucks, but consumers would rate the reliability of S&P or Moody’s judgments.

And not only are the bank’s persona’s being rated, but your persona is as well, by every one who does business with it.

Put them all together and you have a secure form of private money that’s convertible, impossible to forge, and is subject to constant feedback about its value and performance.  Does MasterBucks have too high a debt ratio or too much exposure to non-performing loans at MasterCard?  No problem.  It’s instantly convertible to Credit Suisse Franks.  And the conversion rate lowers MasterBucks reliability ratings even more, signaling the company to correct its course, or lose its depositors.

Think of the implications this has for taxation, especially income taxation.  Keep all your money in Credit Suisse Francs, say, and the US government will never even be able to see a record of your deposits or withdrawals.  How will they track your income?  And who will want to pay governments that failed to prevent the collapse for…well…anything?  Who will accede to the demand for money by governments that repudiated their debts, and destroyed the life savings of millions?

I can foresee huge implications for the future that are very pro-liberty.  In the long term.  In the short term, though, if I’m right, and the current financial system is collapsing we will be in for a very rough decade or so.  Very rough indeed.

_________________

*Apologies to Quentin Tarantino.


Old America v. New America – Justice vs. Fairness

David Brooks does his usual NYT spin job:

Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible

That’s the rumor. The reality, as we’ll see, doesn’t conform with the rumor. The why is in a single word: ‘justice’. What Brooks talks about here are the supposed foundations of our civilization and way of life. Individual responsibility and justice. Individuals are responsible for their condition (through their choices) and expected to live with them. Their condition isn’t anyone else’s fault or problem barring force or fraud. A just society understands that and, as is necessary, holds them responsible for their choices. Lessons are only learned when one has to live with the consequences of one’s choices. But what a just society doesn’t do is penalize those which have made the right or proper choices in their lives. It doesn’t require such people to prop up or rescue those who have made poor choices. Such a society would see that as “unjust” and work against the concept of individual choice and individual responsibility.

A just society is where everyone is afforded the same opportunities and held to the same standards of behavior and the law. Success, however, is left up to individual effort and ability. In a just society you are free to do, within reason, whatever you desire to do, but you’re expected to live with the consequences.

With that preface, let’s look at Brooks’ next couple of paragraphs:

Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.

The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.

While Brooks properly chastises the banks, automakers and state governments, he leaves out one of the most irresponsible of entities which played as large a role as any other contributor to this current financial debacle – the federal government. If ever there was an enabler for all of this, it is Washington DC. Much of what happened can be laid directly at the feet of the Fed. The financial  implosion didn’t start on Wall Street but with the insolvency of the quasi-governmental entities  Freddie Mac and Fannie Mae. Yet they’ve not been in the spotlight of Congressional hearings or had the millions paid their top execs complained about and capped. Where’s the justice in that?

So to get back on topic after that brief aside to assail writers like Brooks for excusing the Federal government from their condemnations (and you’ll see why he did so in a moment), the reason that Brooks seems so angry in this part of his op-ed is he is giving lip service to some foundational American ideals and pretending to be outraged that they’re being violated just before he pulls the rug out from under them.  It is obvious to Brooks and anyone with the IQ of a melon that those who are running the show in DC have absolutely no desire for a “just” society based on individual responsibility anymore but he wants to break it to you gently. That’s the old America. The new America is one based in “fairness” and collective responsibility.  At this point, Brooks wants you believing he’s an “old America” kind of guy.

So he relates the fact that many in America are still mired in their old fashioned belief in justice and are, consequently, a little ticked about this payoff to the irresponsible among us.   People are complaining about it. And after a reasonably good, but disingenuous start, it is here where Brooks pulls the mask off completely:

These injustices are stoking anger across the country, lustily expressed by Rick Santelli on CNBC Thursday morning. “The government is promoting bad behavior!” Santelli cried as Chicago traders cheered him on. “The president … should put up a Web site … to have people vote … to see if they want to subsidize losers’ mortgages!”

Well, in some cases we probably do. That’s because government isn’t fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole.

Irresponsibility is not really penalized in New America. New America is driven by the belief that it is our collective responsiblity to those in need, regardless of how they got there or what it entails, to satisfy that need. So when the life vest of your money (via taxes and debt you will be taxed to repay) is offered to someone drowning as a result of their own irresponsible choices, you are expected to accept that as your duty and not complain about it.

You see, per Brooks, government isn’t in the justice business, it’s in the “economic stabilization” business.

Really? Since when?

And since when did the economic stabilization business involve rewarding incompetence and irresponsibility while punishing their opposites? Isn’t such a policy of rewarding incompetence and irresponsibility a huge moral hazard, not to mention self-defeating? Why would someone change their behavior if there is no real punishment for their present behavior? Isn’t government picking “winners” and “losers” even while Brooks claims government isn’t in the “Last Judgment” business?

In fact it is and has been in the “Last Judgment” business for a while. And in the case here, the judgment made by government is that it is only fair to pick up those who’ve fallen short at the expense of those who haven’t. It has made the judgment that their need is far greater than the need of those who have played by the rules and done their part – after all those who have done the right thing are relatively better off than those who haven’t aren’t they? If, as Obama claimed at the Greek Temple, “we are our brother’s keepers” (well except in a real, Obama-family sense), then the “last judgment” was made then and is now merely being implemented.

We are, apparently, no longer a nation which seeks justice and equal opportunity. That’s Old America. New America seeks fairness as its highest goal. And in the New America, that means an equality of outcome where new “rights” are invented which entitle us to our desires, even at the expense of others.

Brooks goes on to apologize and attempts to minimize the horrific damage being done to America as we used to know it. He serves his purpose and spins the utter destruction of Old America and the emergence of New America as something which just had to be done by our new leader and his benevolent band of brothers, all of whom have your best interest at heart.

It’s enough to make you sick.

~McQ


Dissent and Hate Speech

Apparently signs equal threats to some of our police:

An Oklahoma City police officer wrongly pulled over a man last week and confiscated an anti-President Barack Obama sign the man had on his vehicle.

firstamendment-757857The officer misinterpreted the sign as threatening, said Capt. Steve McCool, of the Oklahoma City Police Department, and took the sign, which read “Abort Obama, not the unborn.”

Chip Harrison said he was driving to work when a police car followed him for several miles and then signaled for him to pull over.

”I pulled over, knowing I hadn’t done anything wrong,” Harrison said in a recent phone interview.

When the officer asked Harrison if he knew why he had been pulled over, Harrison said he did not.

”They said, ‘It’s because of the sign in your window,’” Harrison said. 

When did cops start pulling people over for political bumper stickers or signs?

Anyway, Harrison tried to explain what the sign meant, they disagreed and he was issued a a slip of paper that said he was a part of some sort of investigation. They took his sign. Later, he’s contacted by the police saying the policeman misunderstood and asking him if he wanted his sign back. They had contacted the Secret Service about the sign, and they had told the police it wasn’t a threat. Except apparently they were blowing smoke:

”The Secret Service called and said they were at my house,” Harrison said.

”When I was on my way there, the Secret Service called me and said they weren’t going to ransack my house or anything … they just wanted to (walk through the house) and make sure I wasn’t a part of any hate groups.”

Harrison said he invited the Secret Service agents into the house and they were “very cordial.”

”We walked through the house and my wife and 2-year-old were in the house,” Harrison said.

He said they interviewed him for about 30 minutes and then left, not finding any evidence Harrison was a threat to the president.

Walk through my house? Uh, get a warrant.

Hate groups? They knew what the sign was about, what was the rest of this about?

Which segues nicely into the next portion of the post – hate speech.

Eugene Volokh has a very interesting post up about a UCLA Chicano Studies Research Center study titled Hate Speech on Commercial Talk Radio.

It’s a fascinating post which demonstrates how hard certain groups are working another angle aimed at talk-radio (and read the comments, where commenters take the study’s assertions aparat). Hate-speech is a lever that various groups on the left have been trying to enable for years. From the study, here’s their definition of hate speech:

Types of Hate Speech

We identified four types of speech that, through negative statements, create a climate of hate and prejudice: (1) false facts [including "simple falsehoods, exaggerated statements, or decontextualized facts [that] rendered the statements misleading”], (2) flawed argumentation, (3) divisive language, and (4) dehumanizing metaphors (table 1).

Hate speech or controlled speech

Hate speech or controlled speech

 

Then the examples:

Table 1. Analysis of Hate Speech from The John & Ken Show

EXAMPLE
“And this is all under the Gavin Newsom administration and the Gavin Newsom policy in San Francisco of letting underage illegal alien criminals loose” (from the July 21, 2008, broadcast).

TARGETS
Vulnerable group: foreign nationals (undocumented people).
Social institutions: policy and political organizations (city policy and mayor’s office).

FALSE FACTS
The sanctuary policy preceded Gavin Newsom’s tenure as San Francisco’s mayor, and neither Newsom nor the sanctuary policy supports “letting underage illegal alien criminals loose.”

FLAWED ARGUMENTATION
Guilt by association is used to make the hosts’ point. Undocumented youth and those who are perceived as their endorsers at the institutional level are stigmatized by being associated with criminality.

DIVISIVE LANGUAGE
Criminalized undocumented youth and their perceived validators (Gavin Newsom and the sanctuary policy) are depicted as a threat to San Francisco citizens, setting up an “us versus them” opposition.

ANALYSIS The language depicts the hosts’ targets (undocumented people, city policy, and Mayor Gavin Newsom) as dangerous, criminal, and collusive. In addition, the focus of that policy (undocumented people) becomes reduced to “underage illegal alien criminals.”

Talk about over-analysis. The bottom line is this matrix of assessment is based in pure biased opinion disguised as objectivity. Hate speech, in this case, is nothing more than saying “letting underage illegal alien criminals loose” is wrong.

As Volokh says:

The vagueness and potential breadth of the phrase “hate speech” is a pretty substantial reason — though just one among many — to resist the calls for a “hate speech” exception to the First Amendment. And the vagueness and potential breadth is also a reason to be skeptical of uses of the phrase even outside the law: It’s very easy to define “hate speech” as you like (or leave it undefined, as some arguments do), and use it to condemn people who express a wide range of views that you disapprove of.

One of the most defining phrases in the history of America free speech is “I may not agree with what you say, but I will defend to the death your right to say it.”

It has never been “I don’t like what you say and it sounds like “hate speech” to me so you should be silenced”.

~McQ


Cartoons, Chimps, and Scared White People

Who is that poor, dead ape?

Who is that poor, dead ape?

Yesterday, in a surprisingly foolish move, New York Post cartoonist Sean Delonas attempted to somehow use the story of the Unfortunate Chimpanzee Incident in Connecticut as a visual segue to some sort of commentary on politics.  Although, I’m not entirely sure what point was being made.

The reference to writing  the next stimulus bill seems to me to be a clear reference to Pres. Obama.  He is, after all the guy the guy who’s been out pushing for the thing since day one.  They guy who tried to get Republicans and Democrats together to vote for it a bipartisan fashion.  The number one cheerleader.  He is inextricably linked in the public’s mind with the stimulus bill.  We even call it the Obama Stimulus Bill.  So, who, then are we supposed to think this cartoon is referring to?  Who else could we reasonably infer it refers to?

Now, Obama isn’t the first president who’s been the butt of Chimp references.

He is, however, the first president whose racial heritage includes centuries of invidious comparisons to the great apes.

Which is a shame, actually, because for reasons entirely unrelated to his race, Pres. Obama has a physical feature that is perfect for comparison to a chimp.  His ears.

Chimpy McHaliburton Bushitler

Chimpy McHaliburton Bushitler

I mean, have you seen them? They are Ferengi-class ears. Lyndon Johnson’s soundhorns were practically unnoticeable by comparison.  Sarah Palin may be able to see Russia from her place in Alaska, but with those satellite dishes Mr. Obama carts around on his skull, I bet he hears the occasional Da, and Khorosho! from the bowels of the Kremlin while sitting in the Oval Office.  I don’t think Mr Obama is Jesus, but I wouldn’t be surprised at all to learn that he does hear it every time a sparrow falls.

But, irrespective of the comedy gold that could be mined from Pres. Obama’s unfortunate auricular appendages, and unlike Mr. Bush, who had some relatively chimp-like expressions, a major newspaper can’t make those same references to any African-American, much less the president of the United States, and expect to elide past the deserved criticism for it.

How then could the cartoonist possibly be blind to the possible inferences that would be drawn?  And for that matter, what of the vaunted “layers of editors” the mainstream media employs?  The cartoon didn’t raise any red flags in the mind of the Page 6 Editor?  the Op/Ed Editor?  The Managing Editor?

Apparently not.

I simply can’t believe that the staff of a major newspaper were blissfully unaware that even an oblique Obama/chimpanzee reference would be…troublesome.  And even if they did, you’d think the dead president reference might raise a red flag or two in the publisher’s suite, wouldn’t you?

Combining that into the dead chimpanzee president has to be almost the apex of bad judgment by a major media outlet.

But, once the cat was out of the bag, the Right couldn’t leave it alone.  Instead, the defenders of the cartoon jumped in with their explanations.  Her, for example, is John Hinderaker at Powerline:

Readers of the Huffington Post and–who else?–Al Sharpton construe the cartoon as a possibly racist attack on President Obama…There are several problems with this critique. Most obviously, Obama didn’t write the “stimulus” bill. If anyone is being called a chimp, it is Nancy Pelosi and Harry Reid.

And yet, we don’t call it the Pelosi-Reid Stimulus Bill, do we?  How terribly odd.  This defense of the cartoon is little short of obtuse.

And Post Editor-n Chief Col Allen isn’t any more convincing.

“The cartoon is a clear parody of a current news event, to wit the shooting of a violent chimpanzee in Connecticut,” Allan said in a statement. “It broadly mocks Washington’s efforts to revive the economy. Again, Al Sharpton reveals himself as nothing more than a publicity opportunist.”

I yield to no man in my contempt for Rev. Sharpton, but this is terribly lame.  How, in fact, does this broadly mock the stimulus effort.  It can’t be a reference to the bill itself.  that bill, unfortunately, is not only not dead, it is now the law of the land.  From a political point of view, the passage effort was successful.  And why the reference to the person who “wrote” the stimulus bill?  That person–if not the actual writer, the primary cheerleader for it–is comfortably ensconced in the Oval Office, savoring his victory on this issue, and moving on to mortgage relief.

The only part of Mr. Allen’s statement with which I agree is that it is, in fact, “is a clear parody of a current news event, to wit the shooting of a violent chimpanzee”.  But to what end?  If we assume that it is not a reference to the president, then what, exactly is it about?  And why do so many people seem to think it is a reference to the president?  Why is there no label on the dead ape so that we can know what it is supposed to represent?

"Hi There, Eric. I Can't Help But Notice You're Black. Let's Talk About How Black You Are."

"Hi There, Eric. I Can't Help But Notice You're Black. Let's Talk About How Black You Are."

You see, the thing about one-panel political cartooning is that it takes an extraordinary amount of talent to provoke a complicated train of thought from a single, hand-drawn picture.  You have to be clear, concise, and often humorous, and make a clear, polemical point in one panel. Somehow, the average person thinks the point is entirely different from what Mr. Allen says it is.  And that is, as our Soviet friends used to say, “no coincidence.”

Yesterday morning, before this thing had blown into a full-scale brou-ha-ha, The guys at the Opie and Anthony Show had seen it, and they had their producers out on the street, showing the cartoon to the morning commuters on 57th Street in NYC, and asking them, “What do think this cartoon means?”

What they got was a collection of nervous mumbles that amounted to, “Uh, I don’t really know.”  “I can’t say.”  “Er, uh, I can’t talk right now”.  Oh the passersby had time to read it, but when given the chance to express an opinion about it publicly, all of the sudden it was to dense for them to take in, or they had pressing engagements elsewhere.

Which is an interesting reaction, considering Attorney General Eric Holder’s speech on race, coincidentally given yesterday.

“Though the nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and continue to be, in too many ways, essentially a nation of cowards,” Holder said.

“Though race-related issues continue to occupy a significant portion of our political discussion and though there remain many unresolved racial issues in this nation, we average Americans simply do not talk enough with each other about race.”

The funniest response to that came from a  Jeff Emanuel piece at RedState, which was titled, “Hi There, Eric. I Can’t Help But Notice You’re Black. Let’s Talk About How Black You Are.”

Well, we probably don’t talk enough about race.  We don’t have those frank exchanges of racial views.  Indeed, we don’t even have humorous public statements about race, even tangentially. Because all it takes is for Dom Imus to say something on the radio like, “That’s some nappy-headed hos right there,” and he’s done. Al Sharpton comes around with a group of lusty, gusty fellows to demand your firing, as soon as he hears about it.  And you lose your livelihood, because he’ll get it.

If you’re white, there’s no upside to having a talk about race.  You run the risk of accidentally or unknowingly saying something insensitive, at which point the best thing that can happen to you is that you’ll be publicly reviled as some sort of bigoted troll.  Why take the risk?

Is that cowardice, or simply the result of a prudent calculation of risks and benefits?

No, the only time we talk about race, is when some buffoon like Sean Delonas makes a public faux pas that can’t be ignored.  And I don’t see that changing any time soon.


Entitlement, Pain Avoidance, Parenting And College (update)

It seems that college students have entirely different expectations than do college professors.  Or at least some college professors.  Apparently the students see it like this:

“I think putting in a lot of effort should merit a high grade,” Mr. Greenwood said. “What else is there really than the effort that you put in?”

“If you put in all the effort you have and get a C, what is the point?” he added. “If someone goes to every class and reads every chapter in the book and does everything the teacher asks of them and more, then they should be getting an A like their effort deserves. If your maximum effort can only be average in a teacher’s mind, then something is wrong.”

Sarah Kinn, a junior English major at the University of Vermont, agreed, saying, “I feel that if I do all of the readings and attend class regularly that I should be able to achieve a grade of at least a B.”

Essentially the argument is, show up, do the minimum (i.e. all you are asked to do) and you should get an “A”, or at least a “B”.

Merit? Above and beyond the “average” or the “expected”? They don’t seem to enter into their thinking at all.

Yes, as the professors properly identified the problem, it is a false sense of entitlement.

So, now that the problem has been identified, can you pinpoint the source? Well the profs have various views about that.

Professor Greenberger said that the sense of entitlement could be related to increased parental pressure, competition among peers and family members and a heightened sense of achievement anxiety.

Uh, no, but nice try, professor.

Aaron M. Brower, the vice provost for teaching and learning at the University of Wisconsin-Madison, offered another theory.

“I think that it stems from their K-12 experiences,” Professor Brower said. “They have become ultra-efficient in test preparation. And this hyper-efficiency has led them to look for a magic formula to get high scores.”

Wrong again.

James Hogge, associate dean of the Peabody School of Education at Vanderbilt University, said: “Students often confuse the level of effort with the quality of work. There is a mentality in students that ‘if I work hard, I deserve a high grade.’ “

Oh, oh, oh … so damn close. Where do they get that screwy idea that “level of effort equals quality work”, Dean Hogge? I mean it has to come from somewhere, and apparently it is widespread enough that it is a fairly pervasive phenomenon? Any guesses?

Well, in a nut shell, false entitlement often flows from false self-esteem. Yes, friends, I’m back on that. When little Johnny gets a trophy and a party for being on a 12th place Pee-Wee Baseball team – the very same reward the first place team gets – why in the world wouldn’t he correlate “effort” with “result”? In his case his effort landed him the same rewards as the first place team. So 12th is just as much an “A” as 1st to him, isn’t it? And he gave his all to end up in 12th, so that just has to be good enough, right?  Multiply that over a 18 year life time and it isn’t difficult to understand where this sense of entitlement comes from, is it?

When you’re rewarded at the same level as the real achievers throughout life – so you won’t feel like the loser you are and learn from that – two things happen: One, you don’t try to do better because there’s no incentive to do so and two, you feel entitled to the same results as those who actually did achieve something. So it certainly isn’t far fetched for someone to then believe that effort equals achievement and thus entitlement to the best rewards.

Heh … then you finally leave “soft America” and meet “hard America” as Michael Barone calls it. Suddenly reality slaps you in the face, calls you a loser and gives you the “C” you deserve for just doing the expected. The “average”.  The same thing you’ve always done and been rewarded with more.  

Your world is shattered. You either figure out how big a disservice those who cheered your stunningly average performance up till then have done you and do something positive about it or you wail and whine about how “unfair” you’re being treated and eventually drop out.

In reality, just like our economic remedy, it’s just another example of pain avoidance – something it seems the American public is addicted too these days. The pain avoidance that characterizes the building of false self-esteem can be crippling to a child because the child is given the wrong signals about their abilities and what reality and life expect of them throughout their early formative years. It’s a loser’s way of avoiding reality, except it isn’t the kid doing it to themselves – it’s usually the parents and other enablers who too are in the pain avoidance business.

But the one inescapable truth in this whole process , however, is the fact that reality always finds a way to get through the puny defenses that have been erected and eventually has its way. It’s a pity that many students first discover that in college and many don’t survive the discovery.  Had their parents just done their job as parents instead of trying to manage and avoid pain, the kids might be prepared to confront the reality of “hard America” and give it their best instead of being blindsided by it and crushed.

But of course, that smacks of common sense and as our experts are constantly telling us they know much more how our children should be raised than we do.  And trust me, given the results, that claim has little to do with common sense.  

UPDATE: If you don’t believe this translates into a real world problem all you have to do is listen to Bill Press – or not, as, apparently, most people choose.  Here he is in an interview describing why he wants government to ensure his reward via the Fairness Doctrine:

‘I know why I’m interested in it because I get up every morning at 3:45, I do three hours of talk radio every day from six to nine, that’s my life, it’s my business, I want to make money at it, and I want to be heard.


Translation: I make the effort and thus I should have the same rewards (listenership, influence and monetary) as Rush Limbaugh.

~McQ


Be An Irresponsible Idiot And Make Millions

I‘m always a little amazed at stories like this.  I’m not sure why, given they happen quite often.  

A Manhattan jury awarded $2.33 million to a man who lost his leg after drunkenly stumbling onto the path of an oncoming subway train.

Now, you’d think, given that sentence, that there’s no way a jury could hold the subway folks liable because this drunk stumbled in front of their train right? Heck, he had a blood/alcohol level of .18. That’s smoked folks. That’s twice the legal limit if you’re on a highway. But check out the reasoning his attorney used and, obviously, the jury bought:

According to Dibble’s lawyer, Andrew Smiley, NYC Transit rather than Dibble bore primary responsibility for the accident because the subway driver had time to stop the train but did not.

Smiley added that Dibble’s drunkenness did not excuse the driver, who said in a court deposition that he mistook Dibble for an inert object.

“They don’t get a free pass as to why the person was on the tracks. They are trained to be able to look out for people on the tracks … and people are known to be intoxicated by night,” the lawyer said.

“Trained to be able to look out for people on the tracks”?  Uh, even if that’s true, how does that excuse Dibble of responsibilityfor being on the track?

That comes in the second line – “people are known to be intoxicated by night”?

No kidding? So tell me Mr. Smiley, had your client been on the road in the same condition, do you supposed a state trooper would have just said,  “aw forget it, sir. People get drunk at night. Take it easy?”

And you can bet your house (or the bailout you’re getting for it) that the state trooper would have only held one person responsible for the state Mr. Dibble was in at the time he stopped him.

In this case, my guess is two things happened. One – Mr. Smiley made sure that Mr. Dibble appeared in court looking as pathetic as one could look and used that to play on the sympathy of the jury. Emotional theater. And, two, the MTA was represented by lawyers (not victims) and was thus easy to ignore emotionally. And besides, I’m sure the New Yorkers felt the MTA had deep pockets or insurance or something with which to pay this pathetic creature, right? Of course if their fares go up because of this, they’ll be the first to bitch as well.

But back to the trial. This was my favorite part:

The jury ruled Tuesday that Dibble was 35 percent responsible for the accident, so his monetary compensation was also reduced by 35 percent — from $3,594,943 to $2,336,713.

Really? Good thing I wasn’t on that jury because at worst, it would have been a hung jury. I, unlike this bunch, would have found Mr. Dibble 100% responsible for being where he was and in the condition he was in when the train hit him, and he wouldn’t have gotten a red cent.

If that makes me a cruel and heartless you know what, well so be it.

~McQ


Redefining “Fascist”

So public speaking classes aren’t so much about how you argue a point but what point you argue?

A college student has filed a lawsuit saying a public speaking professor berated him in class for making a speech opposing same-sex marriage.

In the federal court suit filed last week, student Jonathan Lopez said that midway through his speech, when he quoted a dictionary definition of marriage and recited a pair of Bible verses, professor John Matteson cut him off and would not allow him to finish. He said Matteson also called him a “fascist bastard.”

A student evaluation form included with the lawsuit lacks a score for Lopez’s speech, and reads “ask God what your grade is.”

Exceptional levels of tolerance in academia, these days, no? A tremendous diversity of opinion is apparently welcomed and encouraged. Good to know, eh?

“Basically, colleges and universities should give Christian students the same rights to free expression as other students,” David J. Hacker, an attorney for the Alliance Defense Fund, a Christian legal organization that is representing Lopez, told the Los Angeles Times.

Amazing such a thing even needs to be said in this day and time. You have to wonder if Professor Matteson even knows what “fascist” means, much less that it was he who was acting like one.

~McQ


Andrew Sullivan “Misremembers” The Last 8 Years (Update – Sullivan Responds)

Apparently history began for Andrew Sullivan on January 20th of this year:

This much is now clear. Their clear and open intent is to do all they can, however they can, to sabotage the new administration (and the economy to boot). They want failure. Even now. Even after the last eight years. Even in a recession as steeply dangerous as this one. There are legitimate debates to be had; and then there is the cynicism and surrealism of total political war. We now should have even less doubt about what kind of people they are. And the mountain of partisan vitriol Obama will have to climb every day of the next four or eight years.

Obviously Sullivan can’t think of “legitimate debates to be had” concerning this awful bill (just turn toward the White House, bow and sign). And you have to assume that he doesn’t consider putting this bill together without letting the Republicans participate as a party (not as the ‘picked off three’) a cynical declaration of “total political war”. In fact you have to wonder when he began paying attention to “mountains of partisan vitriol” that presidents have to climb over every day.

Andy, when the opposition party “war” dedicated to undermining a presidency and causing it to fail even approaches that which the Democrats waged against George Bush for the last 8 years, I’ll be first to let you know.  In the meantime, quit whining for heaven sake.  This ain’t bean bag.

UPDATE: Andrew Sullivan responds to my points about “legitimate debates” and Republican inclusion:

You mean Obama never went to the Congress to talk to the House GOP? That he hasn’t been relentless in including Republicans in the debate? That he didn’t urge over $300 billion in tax cuts in the bill to assuage Republican feelings in the first place?

Of course going to Congress to talk with the House GOP turned out to be more for show than substance. It was made clear, afterward, that while he was polite and at least pretended to listen, little if any of what they asked for ended up in the bill. One reason that’s so is the bill was written by Democrats in Congress, not Barack Obama. If it had been written by Obama and his administration, Sullivan might have a leg to stand on. But obviously his “relentless inclusion” attempt was ignored by the Democratic Congressional leadership and the GOP was shut out of the process to craft the bill.

Concerning tax cuts, as we’ve pointed out here any number of times, transfer payments my be called tax cuts just like a pile of dog feces may be called a rose, but by any other name, they’re still just welfare checks. Those aren’t the tax cuts the GOP asked for and certainly not what the GOP would support.

~McQ


Where Do These People Come From?

The arrogance of “art” or the artist, if you prefer.

Val Kilmer is thinking about running for governor of New Mexico. Says Kilmer:

He told The Hill at Monday’s Huffington Post party at the Newseum that he has been approached to run for the highest office of the state where he owns a ranch and has family roots.

“Actually, they’ve asked me to run for governor,” he said, not specifying who “they” are. “People seem to want me to.”

I bet I can name one group who doesn’t want you.

Veterans. Specifically, Vietnam veterans.

Why you may ask?

Read this from an interview in Esquire where the interviewer is asking Kilmer how he relates to the characters he plays:

[Klosterman]: You mean you think you literally had the same experience as Doc Holliday?

Kilmer: Oh, sure. It’s not like I believed that I shot somebody, but I absolutely know what it feels like to pull the trigger and take someone’s life.

[Klosterman:] You understand how it feels to shoot someone as much as a person who has actually committed a murder?

[Kilmer] I understand it more. It’s an actor’s job. A guy who’s lived through the horror of Vietnam has not spent his life preparing his mind for it. He’s some punk. Most guys were borderline criminal or poor, and that’s why they got sent to Vietnam. It was all the poor, wretched kids who got beat up by their dads, guys who didn’t get on the football team, couldn’t finagle a scholarship. They didn’t have the emotional equipment to handle that experience. But this is what an actor trains to do. I can more effectively represent that kid in Vietnam than a guy who was there.

Pompous ignorance. And the absolute certainty this poseur displays is laughable. He knows “absolutely” what it feels like to pull the trigger and take someone’s life” although he’s absolutely never done it.

And he “understands it more” than a combat veteran what it is like to have been in combat.

He crowns his burst of ignorance with a stereotypical but untrue characterization of a group he obviously knows nothing about. The disrespect he displays is both disgusting and inexcusable.

Let’s see, he played a fighter pilot once, didn’t he? Well let’s plop his rear-end in an Airbus A320 over the Hudson River at about 2500 feet, kill both engines and see if he can “effectively represent” former fighter pilot Sully Sullenburger, shall we?

Piece of cake, right?

Whatever happened to actors like Henry Fonda who when given an Oscar I believe, said, and I paraphrase, “I don’t know what all the fuss is about. I just pretend to be someone who really did something”.

That’s you, Kilmer!

New Mexicans, I love you, but if you ever elect this trumped up fraud to the governor’s office, I can promise you I will never, ever again step foot in NM for the rest of my natural life. And I’ll do everything I can to persuade others never to do so either. In fact, for all I’ll care, La Raza can have you.

Signed: Some poor borderline criminal punk who volunteered to go to Vietnam.

[There, I feel better.]

~McQ

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