Tol goes bye bye

Philip asked me to comment on the recent media coverage of my person (1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17).

The background is as follows. I have regretted that I never wrote my memoirs of my time in Hamburg. I plan to write a multi-media text “book” and tweet the key messages. To hone my book-tweeting skills, I decided to tweet my memoirs (under the hash tag #cuimhnícinn). The chapter on the ESRI was tweeted early on January 1st. I had assumed that all Irish twitterati would be asleep, but Colm Keena was not. And then RTE called, and nothing much had happened that day, and so on.

All this is ironic for someone who has repeatedly warned against celebrity economists. And yes, the Late Late Show called too.

Among our reasons to leave are the economic prospects of Ireland, and particularly of families like ours with a triple exposure to public finances: two salaries and kids in education. I called that “10 more years of austerity”, where “10 years” really stands for “a long period”. This was apparently news to some. Although really not my area, the facts are simple. The programme for government and the deal with the Troika have that the primary deficit will be reduced to zero by 2014-5. Public debt will reach 125-135% of GDP by then, pension reserves will be depleted, and valuable state assets will have been sold. That means that, after 2015, a large share of tax revenue will go towards interest payments, debt reduction, and rebuilding of reserves – rather than to things that make life worthwhile. If debt is to be reduced to 60% GDP, then 10 more years of austerity seems fairly optimistic. I do expect, however, that the ECB will monetize part of the debt.

I also said a number of things about the ESRI. I enjoyed working there, and hope to pass to my students the things I’ve learned while there. However, I also think the ESRI should work harder on transparency and quality management. ESRI data and models should be in the public domain.

There has been no independent investigation of the accusations of racism against some ESRI staff. Indeed, ESRI management has repeatedly denied the possibility that there could be any truth in such allegations.

The ESRI is not as independent as it should be. The ESRI does not have a budget to pursue issues that no one in government wants to hear about. That is, government departments and agencies set the research agenda. That is fine in a way. Blue skies research belongs at university. The ESRI does policy-relevant research – that is, answers questions posed outsiders. However, it would be better if part of the ESRI budget would be reserved for projects identified by the opposition, by the public, and indeed by ESRI researchers (who often come across major and minor public policy mishaps but lack the resources to pursue them).

Funding agencies do not influence the conclusions that the ESRI draws.

Funding agencies do influence the conclusions that the ESRI draws attention to.

The grant-in-aid is about 1/3 of the ESRI budget. About 1/3 is international and corporate money. And about 1/3 comes in through competitive tenders from the various parts of the Irish government. The funding agencies often have a clear idea of the desired result, and award the contract to the bidder who is most likely to obtain that result. Can a bidder uphold her integrity and be loyal to her employees at the same time? One solution is to have a specialized government agency to manage research contracts. Tenders would tend be awarded on merit, recalling that pliability is not a merit.

That agency could also keep an eye on the output: Some projects never seem to reach a publishable result.

This does not require a new government body. The research managers (and their budgets) in the various government departments and agencies could be transferred to, say, Science Foundation Ireland.

As to academic freedom at the ESRI, the chronology of my contributions to this blog tells it all.

42 replies on “Tol goes bye bye”

Thanks for posting again Tol

The whole load of coverage that came around your departure just shows how messed up this country is, most of the coverage was along the lines of “how dare this ‘outsider’ tell us Irish the reality of things to come?” did he not get the memo of “we have turned a corner” and “there is a light at the end of the tunnel”

sigh, thanks for ruffling the feathers of our inbred islanders 🙂 and hope you continue to post here

aside: aint the UK following the same crazy wind generation policies, i wonder what will happen when there is excess here and in UK (often under same weather systems) or a calm period and of course feck all interconnection capacity 😀

The principle of an independent fiscal council has officially been accepted in principle by the Government.

Whether the Government properly funds the Fiscal Council will tell whether the Government is genuine about reform.

Similarly, funding the ESRI to do additional work and to serve the opposition to some small degree would be another positive step in improving how the Oireachtas functions. It would also heap pressure on the opposition to know their onions.

However, the ESRI will never be totally independent even if there measures are put in place, for what the Government gives the Government can taketh away. With that said the reforms suggested by Richard Tol make sense and should be addressed on their merits (even if I, like others, do not agree with everything Richard Tol says 🙂 ).

Richard,

I think your criticism of the ESRI should be welcomed and I hope that it shakes things up somewhat there. Leaving your position at the ESRI because of shortcomings in the research environment is one thing, but leaving because Ireland as a whole faces years of austerity is quite another.

You say in your post that you are leaving because both you and your wife work in the public sector and you have kids in school. But I assume that it is not at all clear that either you or your wife will have to endure paycuts or radically increased taxes (beyond European averages). And if you think state schools in the UK are better than those in Ireland, then good luck with that.

It is all the more curious because you are heading to the UK which also faces years of (self-imposed?) austerity and stagnation. Moreover, the quality of life in the UK is by no means any better than here (although I imagine Brighton is nice place to live).

I moved to Ireland at the beginning of 2011 with my young family. I left a very comfortable life in Switzerland with a good career and a high salary. I took a substantial paycut along the way, but nevertheless my family and I are very happy here. I think the quality of life in Ireland is still amongst the highest in Europe, despite the very obvious downsides (the weather, the queues at A&E, the public transport system (that won’t be sorted out by simple privatisation as in the UK, but that’s another story)).

The issue I have is that in making very public statements that essentially amount to “I’m outta here because Ireland is going down the toilet”, it gives an unjustifiably bad impression of life and career opportunities in Ireland and may cause others to think twice about moving here to take up important posts in academia or the private sector.

Good luck on your new life , with a family it was a rational decision –

Relatively basic life support could be cut off here due to the ongoing depreciation of assets and the non investments in areas of infrastructure that may have a higher apparent cost due to higher labour inputs rather then higher energy inputs.
I.E. – the national accounting is flawed , chiefly but not exclusively because of the Euro.

http://www.ironroadaaron.com/foynes/index.htm

@bazza

People outside of Ireland don’t need Richard Tol to tell them that Ireland is a smoking crater. They know. Even if universities were hiring in meaningful ways, recruiting foreign academics will be an almost-impossible sell: combine certain salary cuts with widespread public hostility (fanned by the media’s propaganda war) to the public sector as a whole, add in stubbornly high prices for everything including housing (thanks in part to private-sector grocery cartels), lousy weather, the relative paucity of things to do other than drink (Dublin pales in comparison to most European or North American cities in this regard), the religious stranglehold on the schools and difficulty placing children in them and Ireland is not an attractive place to immigrate to and won’t be for at least a decade.

The funding agencies often have a clear idea of the desired result, and award the contract to the bidder who is most likely to obtain that result.

Isn’t that the preferred method for awarding nearly all government contracts?

An army of experts banged loudly on the ‘soft landing’ drum rather than discomfort the groupthink of the gentry despite forewarnings from such revolutionary sources as the IMF.

@Ernie

Most of what you wirte is simply rubbish. I have lived in sunnier, richer, snowier and supposedly more interesting place than Dublin and there is really not that great a difference in the quality of life. This is especially so when it comes to schooling. We moved to Dublin in Jan 2011 and could place our eldest in one of two excellent local schools that are free and run by dedicated teachers. The fact that they are owned or managed by the Church has not had the slightest impact on our child or us, except that she learned to sign carols at Christmas.

Knowing what school systems are like in other countries, I am more than happy that my children will be educated here.

So
Farewell Then.
Richard Toll.

Worlds 169’th Best
Economist

And Scourge
Of Greenwashers.

Your Departure.
to a country.
That Prints
Money.
caused ripples.

Please return

now and again
when you’re not that busy

and observe
Our Rosary
Of Austerity.

@ Richard
Good to hear from you. Best of luck in the UK. Would be nice if you came back some day. Keep in touch.

@Richard

Best of luck in Brighton/Hove.

It is interesting to note that three of the last four threads could be said to be somewhat contrary to the Establsihment’s view – i.e. Richards, Jeromes and Colms (2 locals and 1 visitor) – and offer some hope that critical comment has a future.

@ Ernie,

Every country has its plus and minus points. There is corruption in Ireland, however it is on a much lower scale when compared to other countries, try Brazil, Nigeria, South Africa etc.

Other countries like Singapore have much greater control over their populations, which makes for a low crime society, however the general population does not seem to be very happy considering they work so hard.

What will define Ireland is the attitude to the problems it currently faces, if Indifference is to rule then there is no hope. I fear that indifference is winning out.

The unfortunate outcome of this whole episode -and I expect entirely unintended by Richard Tol – is that it will increase – if that were possible – public cynicism about the activities of ‘Official Ireland’. The most that any of his fellow academics and researchers here could muster was (1) the possibility that he might have a case to which the ESRI should respond, (2) some regret that he is among a number of academics who are leaving or have left and (3) some further regret that he did not feel he had the freedom to express dissent with the official line in some areas.

Whatever about his allegations of xenophobia, racism and nepotism (which are specifically related to the terms and conditions of his employment), all of his erstwhile fellow academics know that his critique of the funding and direction of, and the nature of the public policy research conducted by, the ESRI is solidly based.

Yet they remain silent.

The reason they remain silent is explained by the fact that Richard could go public with his critique only on his departure when he was completely beyond the reach of any retribution that might been exacted if he had gone public while still employed by the ESRI.

This may be a comfortable oppression and not very onerous to bear – and it appears that many are perfectly happy with this reasonably well-rewarded, if constrained, existence, but it is oppression none the less. And it is extremely damaging to the public interest when those with knoweldge and competence are prevented from speaking out – or are persuaded to accept that it is in their better interests not to.

The climate of fear that prevented those who knew from speaking out as forcefully as they should have when the ‘double bubble’ was inflating remains intact.

What will it take for those who are paid from the public purse and who have knoweldge and compeletence to give voice publicly to what, I’m convinced, they acknowledge in private? It could be career-damaging, or even livelihood-threatening, for any individual to go on a solo run, but there would be safety in numbers.

I have long extolled the virtues, and necessity, of collective action here. But I expect the incarceration is too comfortable and well-rewarded. And, it’s Ireland after all. It’s a lot easier to go with the flow. Tóé bog é an saol; agus tógfaidh an saol bog duit.

The line that got my attention was that Richard and his wife worked in the public sector and feared for the future of his children.

The private sector is another planet and I have sensed the fear of staff in a wobbly company where they had little chance to work again.

Ulster Bank hits the headlines and for those that don’t make it in the media, there isn’t 7 weeks pay per year worked, in additional to the statutory redundancy payment nor an application to the EU’s globalisation fund. Size does matter.

My son hated leaving Jeddah to begin school in Ireland but he got to like Ireland and is now earning more than myself running his own startup. Being of Filipino/Malay origin, he never had a problem with racism. I don’t like the grey Irish weather myself but it’s not very different to most of Northern Europe.

As regards Irish institutions, it is as rare as a black swan in the northern hemisphere to find individuals daring to depart from what is expected of them.

During the bubble, not one at the DoF, ESRI and the universities, dared tell the little emperors that they had no clothes.

Whitaker was an exception a long time ago; a William Whyte had sussed out the specie that went with the flow in the 1950s and he dubbed him ‘organisation man.’

“I have regretted that I never wrote my memoirs of my time in Hamburg”

I have a feeling Hamburg is less regretful.

@bazza

” “I’m outta here because Ireland is going down the toilet”, it gives an unjustifiably bad impression of life and career opportunities in Ireland”

You would appear to be in a minority. And I speak as someone who has lived and worked in many countries for quite some time.

Richard Tol is by no means the first – and won’t be the last – to point out that Ireland is on a downward trajectory, may be on it for some time and that getting out of it might be a good idea (I think even previous FF ministers have said similar things in recent years as they encouraged the young unemployed/recent graduates to up sticks and preferably go and draw their dole somewhere else).

Since 2008 I’ve been receiving a steady message from the outside world – that I have dealt with over here – that they view Ireland as a lost cause. Where they were actually living over here, they were glad to be going back to USA/Canada/the Gulf/Germany/Holland/etc. I recall one American executive in 2008 speaking to a manager who was looking to hire people here saying: “We are not about to become the only job creation scheme in Ireland. The place is going down the pan.”

I wouldn’t be too quick to praise the education system here either. Most teacher appointments (like a lot of other things in Ireland) are based on the connection to the decision-maker and not the candidate’s ability plus there is only one way the teacher:pupil ratio is going in this country.

I think Richard has every right to call a spade a spade and do what he believes is best for his family. As for career opportunities here….. sorry but you’ve got to be kidding. It seems there are lots of others on the same plane/ferry out of here who have tried to make a go of it but have finally had to admit defeat and leave.

Its quite amazing how framing can influence people’s attitudes to support for funding. If Frances Ruane came on this blog and made the exact same plea as Richard, namely for greater non-commissioned budgets for ESRI, she would be getting a pretty hard time. Richard’s points about ESRI (with the exception of a very vague racism allegation) have been debated for a long time and it is great that he is revisiting them and putting them back on the agenda. In my own view, the main lost opportunity has been on the philantrophic side and I have no insider knowledge of why this hasn’t happened. Ultimately ESRI and the universities need endowments to buffer against the vagueries of government policy, to allow investment in longer-term research streams and to allow staff to go out on riskier projects.

@ PR Guy

You should take that tablet at lunchtime. “Ireland as a lost cause” sounds like 2010. The bank losses will eventually be digested . The crisis has moved on to other countries now. Gideon Rachman in the FT a few weeks ago wrote that he can’t see UK living standards growing much in the next 10-15 years. The debt binge is going to hang over many countries for the rest of the decade at least. Plus Ireland has Taytos.

@Liam
Philanthropy would be another source for independence, as would multi-year budgets. Back in the good times, I argued that part of the overheads should be used to create an ESRI endowment to get us through the bad times.

@Liam D

Is it the case that 75% of third level funding is spent on salaries? Perhaps, if the latter was throttled back there would be more funds available to meet other needs?

Alchemist – yes, salaries are the main expense for teaching and research. Like any salary-intensive industry, you could cut wages and try to hire more people. If this could be done in a way that ensured more and better researchers and funding lines not tied to overly-specific policy lines then you could sign me up!

Richard,

Best wishes to you and your family in your new life in Brighton. You made a remarkable contibution, especially to the area of environmental economics, in your short time here. Let’s hope the standards you established in discussion of public policy formation in that area will be maintained. You must be flattered by all the attention that the announcement fo your departure engendered, but then again it does well to remember that we have short memories in these parts!

Good luck and good fortune to you and yours.

V

Energy economists need to remind themselves ALL OF THE TIME of the fundamental change in the industrial / finance system since industrialisation.
200 years ago (Ireland was still a essentially agricultural place) the core wealth still came from a combination of light & the land through photosynthesis although at that stage a rising Imperium was beginning to direct trade in a forceful manner – See Corks supply of the Anglo / American war of 1812.

This core wealth was farmed via mostly local capital & labour inputs and the product (lets say butter) went to market in towns like Cork.
We exported the stuff in exchange for stuff like wine from Spain & France which was also reliant on photosynthesis and it was transported by horse which ate grass and by sail which depends on solar heating & its interaction with the earths surface.
So most cities outside the major financial capitals of the time were almost entirely dependent on their own Hinterlands for their income i.e they were self contained units that traded with other self contained units.

This dynamic changed with the use of fossil fuels (ancient sunlight) for locomotive power and its subsequent monopoly takeover by the banking establishment.

The Bankers found out they could increase or decrease the sunlight at will – ultimate power……………………simply by changing the money supply whose value was now linked to these fossil fuels.

Cities, regions and then entire countries began to loose their redundancies – they became more interconnected and thus more vulnerable to the money power.

One of The final intellectual acts of this time was the changing of the political geography syllabus from one of nation states with at least official control over their own destinies to rudderless market states – whose very lifeblood is hilariously tied to financial indices.
This is the extreme dominance of the capital markets over previously organic trade connections that we see today.

In his famous Cross of Gold speech Wiiliam Jenning Bryan said the great cities depend on proud and fertile lands & thus the workers who toil in the fields – but they do not now , their wealth is now connected directly to the fossil fuel matrix – they have divorced themselves completly from their local hinterlands
http://www.youtube.com/watch?v=m83EKoS5FWY

The fields around Cork do not produce the wealth today – the great credit engine recycled Arabian oil wealth into these lands – inflating their value while mysteriously keeping consumer inflation low.
Indeed Europe produces little of its own wealth now – the Great Imperium must project its forces around to planet to sustain these absurd & declining wealth batteries.

The western world has even now not come to terms with the changing of its Navies from sail to coal and in the final act to oil – one of the greatest most profound stragetic decisions of the last 100 + years.

Meanwhile the scarecrows of North Cork & the tinmen of Verolome have been put burned or put on the scrapheap.
The best they could hope for is to farm some oil based credit via selling land or perhaps cater for the middle credit managers toys.
Now even that is going………
http://www.youtube.com/watch?v=OGyDtjPFtMA

This is the modern world gentlemen.

@Liam Delaney,

“..If Frances Ruane came on this blog and made the exact same plea as Richard, namely for greater non-commissioned budgets for ESRI, she would be getting a pretty hard time. ”

Why? And from whom? If what you assert is true, then it means there is no demand for public policy research that contests and critiques the huge ‘snow job’ on public policy and regulation perpetrated by government, the government machine and entire associated quangocracy and, where relevant, dissents and offers credible alternative options.

In fact the simplest solution is to re-assign some of the huge amount of resources allocated to this ‘snow job’ and allocate them to the Oireachtas. But this would require the Oireachtas to express some interest in applying effective scrutiny of government and imposing some restraint on its activities – and it would require some measure of public support for the Oireachtas to do this.

So, perhaps, your assertion is correct. The Oireachtas has no interest – and the public probably wouldn’t support it if it were to express some.

But as for philanthropy as a source of funding for public policy research, pleeease..

@Liam,

Of course. That should be self-evident. But it should be voted and administered by the Oireachtas. In addition the Oireachtas should vote funds to commission the ESRI to assist its Cttees to evaluate and critique government policy proposals – and submissions from the various interest groups. 50 years ago, following on from the original Ford Foundation grant, it made sense for goverment to fund policy research. Nowadays it has the resources and ability to access policy research and advice globally.

What is needed now are people with the competence and knowledge to contest the huge wave of bullshit government, the government machine and the quangocracy generate. But there is also a requirement for non-commisioned funding for these people to conduct general disinterested public policy research.

@ PR Guy

“It seems there are lots of others on the same plane/ferry out of here who have tried to make a go of it but have finally had to admit defeat and leave.”

We have what, 1.8mio in employment, and approximately 1% net emmigration in this country? Its not exactly the end of the world stuff.

@Bond
Show me one bit of internal redundency remaining on this bog – this island is ripe for the extraction phase.
A classic pump & dump operation.
I always think Verolome really encapsulated the modern history of Ireland – a Dutch company coming in here , unlike Ford & Dunlop – a highly skilled competent team of men were built around this unit that made some fantastic boats of much higher standard to the South Korean stuff then coming on line.
But blown away by the global wage arbitrage system that for only one moment in time stopped in Cork before moving outwards in a Locust like fashion.
This was a near 100 year $ bubble phenomena – if this continues most of your bonds will become worthless unless they are US treasuries.
The $ most feed , if it cannot eat the vegetation it must feed off other Locusts.

Do you think Bonds will provide your life support when this is all over ?

Public debt will reach 125-135% of GDP by then

This contrasts with
ESRI’s prediction in September 110% gross debt/gdp by 2015 (98% net debt/gdp)
Any evidence or data to support this difference of opinion?

Tol’s previous co-authored outlook on the Irish economy in 2008 predicted average 3.8% growth 2010-2015. We all make mistakes but why should we expect this year’s predictions to be more accurate than previously?

Tol publicly and frequently supported the Poolbeg incinerator as a great project while it was obtaining consents. Now he recognises that the same project will be in receipt of unfair state subsidies and state guarantees. What has changed? Nothing but the minister. This is Tol’s lasting Irish legacy – that he reframed the debate on the incinerator to a discussion of one politician’s presumed political motivations away from the long term environmental and economic interest of the city. It was not intentional, but the effect was massively destructive. €80m has been spent already by the state on this project.

@Richard Tol

If you even think about wearing an English rugby shirt live on the BBC – don’t even think about it!

May the road rise to meet you – your children play for Ireland … stay well … and a little bit more heterodox, outspoken, and refreshingly honest.

As for your comments on all those heterodox, marxist, radical, and postmodernist influences in the ESRI: No Comment!

@Bond Eoin Bond-i beach here I come

You don’t seriously believe all that drivel and stat-bending that says only a small handful of people have in the past couple of years left/currently are leaving this country do you? I have honestly lost count of the number of people I know who have gone (though granted, some of them are just working elsewhere in Europe and coming home on a Friday night to see their kids). There’s also a few who leave but come back home shortly afterwards because they can’t cope without mammy to do everything for them!

@PR guy

Not to mention all the money and assets that have ‘gone’ via the British Virgin Islands only to reappear in exotic downtown Zurich. It will take another ten years before a tribunal is worked up to investigate this emigration trend.

I get the feeling reading the intro that Richard Tol didn’t have a nice experience being the lead item on the six one on a slow news day. Did it come across unduly negatively? A sort of “If that’s what you feel it’s not what I meant” vibe perhaps ?

PR Guy,

I venture to say that Construction of Buildings and PR (Contruction of an illusion) are both in the vortex of the storm. Both depended on the continuance of the financial sector and Fianna Fail for the modest fees eeked out over the last decade. Since both have collapsed, your world is shattered.

The good news s that a) we will always need houses to live in and b) some corporate or politico will always pay top $ for you to burnish his image.

@TullMc
Is this the future for the outer suburbs ? , or is it the inner suburbs these days – I am not quite sure.

Anyway its advertised on Daft.ie (good name) at 575,000 euros if you are interested.
http://www.youtube.com/watch?v=RYIGmE2VTks.

It would have to come complete with a young Felecity Kendell before I would become interested in the Good life out in the burbs to be honest.

@ Bond. Eoin Bond

Plenty of Immigrants passing Paddy then as he makes his exit stage left? This is one of the characteristics of the current crisis that distinguishes it from the 1980’s or indeed any of the other numerous recessions we have had. In fact, we have lived most of our lives in recession since the foundation of the state not counting the times we were living it up on borrowed money as we are now. As we know the CSO were already 100,000 people out but what’s a 100,000 here or there, we are Irish after all.

What you are really referring to, is an almost endless supply of cheap workers on top of those already on the dole. It comes at a time when we are heading into a fiscal union with our government admitting it cannot create jobs but then announced that it was creating 2,000 fitting water meters to citizens pipes.

Usually, when a government says it cannot create jobs if follows it up by saying it can only create the conditions that foster growth and jobs but they have not even made an attempt to say that. I suppose with sky high energy bills, petrol/diesel, no structural reforms, no targeted PS job losses, no scrapping of UORR no benchmarking of commercial rates to today’s rents, no real meaningful changes to bankruptcy and a private sector left to deal with zombie banks etc., the pretense of providing the conditions for growth would be hard.

@ Richard

Once again, Good luck! I suspect there are a lot of people who will be joining you in the UK and they won’t just be the bankruptcy tourists.

This is all getting a bit tiresome. There was an old expression that when you took the schilling you must follow the drum.
Mr Tol took the schilling but seems to have taken the drum with him to beat from afar.

The UK has a broken economic model that didn’t even survive Thatcher. And she destroyed what the country needs now to get it going again.

http://www.guardian.co.uk/society/2012/jan/15/below-breadline-liverpool-workless-estates

http://www.guardian.co.uk/society/2010/oct/23/britain-not-working-unemployment-middlesbrough

All this damage might have been justified if something sustainable came out of it

http://www.fsa.gov.uk/pages/Library/Other_publications/Miscellaneous/2011/rbs.shtml

Lacking inside information, it is hard to judge these matters. One thing I am _certain_ of is that the ESRI reports 2001-2008 used very cautious, political language. Lots of equivocating, yet the ESRI lacked a banking or property expert.

I for one certainly don’t perceive them as an independent institute – their charter is at best murky. At corporate level the ESRI should be reformed, and given proper independence. I think the Opposition should have _limited_ call on their resources, and it would be appropriate for the ESRI to be under the aegis of the Governor of the Central Bank.

What is this about ‘indepenence’? Jobs in the ESRI are secure and were secure throughout the bubble. So what prevented anyone speaking out, except moral cowardice and fear for future advancement?

Yesterday I became aware of the case of an old friend in the private sector who was sacked after 30 years, coincidentally just after blowing the whistle on a major fraud. That’s moral courage. That was a case of someone just doing the right thing because it was the right thing.

Anyone would think that we were talking about Morgan Kelly here, not Richard Tol who put his name to the ESRI’s last pre-crash sunnny medium term review.

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