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Wednesday, November 30, 2011

 

Slow Day for News...




Today I stumbled across the issue of the recent lift on the ban that prevented the use of federal funds to inspect facilities that slaughter horses. It turns out to be an interesting example of the effects of interventionism.

In 2006, the ban was placed and ended horse slaughter in the United States. All meat that crosses state lines must be inspected by the USDA. Because this inspection funding was banned, the horse meat market in the United States was forced to shut down.

It seems like this would be a great thing for horses. In the United States, horses are viewed as pets and as a symbol of the west. Slaughtering them for their meat is about the same as chopping up your dog and barbequing it. There is certainly no market for horse meat in the United States anyway. Why not just let them live happy lives and eliminate the possibility of being slaughtered to death.

Unfortunately, this ban did not stop the slaughter of horses and even led to horse abuse. Old horses are typically sold to slaughter houses. Since no American slaughter houses were available, they were sent out of the country to Mexico and Canada. The ban did not end the slaughter of horses. People will always find alternatives and other markets.

Also with the economic downturn, many people could no longer sustain the expensive livelihood of a horse. Because there were no slaughter houses available, many horse owners abandoned or failed to maintain enough food and veterinarian visits for their horses. Instead of just being killed, horses had to suffer for months or even years before they died. If anything, the ban created more problems. This ban that was meant to save horses only increased their suffering.

This example shows that government intervention creates more problems that it attempts to solve. The ban did not end horse slaughter. Instead slaughtering was simply outsourced to other countries or horses were abandoned and left to suffer.

In case you’re wondering, horse meat is considered a delicacy in Asia and Europe. It is also considered a good source of protein for zoo animals. There is no market for horse meats in the United States so don’t worry about being force fed horse burgers because of the lift on the ban. Your chicken nuggets and Taco Bell meals are horse free!

 

On Healthcare

To begin, it might be worthwhile for readers to check out the article that inspired my thoughts this time around (it should be linked above, but just in case: http://www.hslda.org/hs/state/mi/201111290.asp).

What bothers me the most about the abuse that health care professionals are able to practice is that they are only able to carry it out because of the trust they receive from society and the support that they receive from the State. The United States of America is fortunate enough to enjoy the benefits of a health system that more or less operates autonomously from State control...relatively speaking.

It still puts up with Medicare/Medicaid.
It has the Food & Drug Administration to deal with.
There's a good chance private insurance will be a thing of the past if our Hopeful Leader has anything to say about it.

What could possibly go wrong? Except the violations of human rights that you see every day in countries where decisions about patient care are taken out of the hands of patients and put into the hands of members of an establishment.

Doctors in the Netherlands exercise euthanasia without explicit patient permission.
Special boards in the United Kingdom use the following calculation to determine who receives treatment: #of productive taxpaying years remaining - cost of treatment = X, where X must be a positive amount in order for the patient to be treated.
Children receive dangerous treatments without a reasonable risk assessment in Michigan because the doctor is inflexible in "this type of case".

My only hope if State control of health care in the U.S. increases is that if I ever need serious medical treatment I might be able to afford a Carnival Cruise to the Bahamas where an Ivy League graduate will perform my surgery using recycled scalpels that a good autoclave sterilized but were still deemed "unusable" in the nation of my birth because of a government regulation. And maybe my transplanted kidney came from a person suffering from poverty in Guatemala. My life is on the line, and the decisions foisted on me by a controlling State leave me with fewer options, fewer chances to exercise survival in a way that is consistent with liberty.

How is the State's control of medical care supposed to help anyone prosper if it enforces its opinions on what life, particularly the life of its slaves, are worth? In ancient Rome many slaves enjoyed practical autonomy from their masters, even being serviced by other slaves because they were so valuable to their masters through their intelligence or productivity...yet in the end, when they became sick, or old, or an accident befell them, the common practice of a Slave master was to end his liability.

I am not a liability, nor is any person who is willing to put their self on the line and say "I am a person, not your property."

Saturday, November 26, 2011

 

Economics: Brain Drain, Brain Gain and Brain Circulation

For economic growth a company or a country as whole need human capital. More importantly, skilled workers are engines of the innovation that allows a company or a country to stay competitive; not only nationally but also internationally. A couple days ago I was reading news on the internet and I came across an interesting topic in one of UK newspapers Telegraph. The story was by Rebecca Smith “African Countries Losing Doctors in the “Brain Drain.” Building on thought of freedom of movement and pursuit of happiness the topic raised many questions in mind that enticed me to read further. In my readings, I found that not only there is a brain drain, but also “brain gain, brain circulation. The question is what does this mean on economic perspectives.  In his book:  “Naked Economics, Undressing the Dismall Science, Charles Wheelan wrote: “Human capital is the sum total of skills embodied within an individual: education, intelligence, charisma, creativity, work experience, entrepreneurial vigor, even the ability to throw a baseball fast.” (Wheelan 127).
It should be noted that no matter how developed a country’s economy is, there is always a shortage of skilled workers in various fields such as medical, engineering, management - just to name few and this is a shared burden across the world but dynamics are of course different. Talking about professional migrants from developing nations such as those from Africa or Asia, they do so for various reasons.  Some decide to leave their home countries to the west in the hope that they will get a better life, better job and better prospect. According to Dr. Harley Balzer, Associate Professor of Government and International Affairs at Georgetown University - audio presentation at the Center for Strategic and International Studies of April 14 2010, “People migrate to other countries in response to economic conditions and try to maximize their options.” He continued saying that there is an estimate of 35-40 million Chinese who live abroad and this exodus started in 1978 (not all of them are skilled professionals).
 Hence, while the migration of skilled human capital is still debatable on who benefits and who loses, some would argue that people have the right to move and live wherever they want (when applicable). However, when it comes to brain and drain, Ms. Smith asserts: “In total the nine sub-Saharan countries in the study lost the equivalent of $2billion as doctors left the continent to work overseas while the UK benefited by the equivalent of $2.7billion and America benefited by $846million.” Also, the brain drain might be true when you read the following segment of the World Bank report on Sierra Leone  on the htt://irinnews.org/report.aspx?reportid=82755 :  “In Sierra Leone, for a population of more than five million there are 75 state medical doctors as of February 2009, according to the Ministry of Health.”
Clearly, losers are countries where skilled professionals are coming from. First, in many circumstances political unrest, civil wars and poor governance do not give much of options to skilled human capital other than leaving their home countries. In quoting Mr. Gary Becker speech, Wheelan, wrote: “While all forms of capital-physical capital, such as machinery and plants, financial capital, and human capital- are important, human capital is the most important. Indeed, in modern economy, human capital is by far the most important form of capital in creating wealth and growth” (Wheelan 134).
Conversely, the brain circulation also exists. For example some people may go back to their countries after studying in developed countries. Dr. Balzer contended that a good fraction of some Chinese who studied abroad return back to their countries to apply acquired knowledge.  In this light, China and India have recognized the importance of investing in human capital by putting more focus and effort in education. According to Uttara Dukkipati, “The growth of China’s higher education sector provides a good example of how private investment can be used to improve the status quo.” He added saying that “According to Venture Intelligence, in 2000, the Chinese tertiary enrollment ratio was 6 percent and the regulation on for-profit participation in higher education was murky. In 2002, the government issued a law permitting for-profit participation in the higher education sector. China’s higher education enrollment increased from 14.7 million students in 2002 to 23 million by 2006.”
The aforesaid examples indicate that there is a striking correlation between a country’s level of human capital and its economic well-being. As long as the unrest, poor governance, lame economic growth and political instability continue, people will always try to maximize their options and try to respond to their economic conditions.

Tuesday, November 22, 2011

 

Who is to save Europe, German Chancellor Angela Merkel and President Nicolas Sarkozy of France, China or the US?


As the world continue going global whatever affects one country will certainly affect neighboring countries or even across the continents. This is true nowadays when you look at both political and economic spectrums. Building on ideas “What is the role of government in people’s life” I think that we as people across the globe gave too much power to governments. Be in capitalist or socialist (not to mention communism) countries people relied on their governments. People trust in governments and its institutions to do the right job for its citizens as well as to the country. However, what is still unknown to many is that from economic stand point, governments are different from businesses so, they are or should be run differently. As an example, a businessman will carefully count every penny that comes in or goes out on cash-flow while the government institutions manage public funds (tax payers). Also, most politicians tend to follow their own interest rather than working or championing for the welfare of people they represent. This phenomenon happened globally so the sentiment of angry citizens is spread all over. Yet, people continue to rely on government to take measures in tackling the inequality, poverty and financial problems. One thing to recognize is that to have gone global, losers and winners were created. As matter of fact, some countries are more advanced than others in intellectually, economically, politically, just to name few.

In this light, it is hard to know who would like to help Europe recover from its pressing financial crisis as all countries are on the edge. After all Robert Heinlein said it. “There ain't no such thing as a free lunch.” Therefore, building on what the president of World Bank Robert Zoellick said China may intervene in Eurozone financial crisis http://www.thisdaylive.com/articles/eurozone-seeks-bailout-funds-from-china/101540/. In fact, it is in China’s interest to help Eurozone because China has a significant investment in various European countries. For instance,
Alessandro Antonelli, an economist, John Cabot University reckons that China will be interested to buy European government bonds. During an interview on Reuters, he added saying that China will buy assets in those European suffering countries (Portugal about 10 billion dollars, Greece about 9.5 billion dollars etc). It is important to mention also that German’s export sector would benefit from the existence of Europe.

In the meantime, another important and crucial issue the Eurozone may be facing is how member countries have historical, political and socio-economical divergences. This may be a factor that some European countries tend to act behind the curve in dealing with common currency. According to Antonelli, there is also a credibility issues among Europeans. He gave an example in which top German politicians would say one thing today and a different one tomorrow. This may be true in the same footstep when German Chancellor Merkel was quote by Reuters addressing the Polish audience six months ago that “If the euro fails, then Europe and the idea of European Union will fail.” Next, Cimbalo on asserts that the Polish had the desire to join the EU but now those ambitions were set back given what is happening in current EU members. http://www.huffingtonpost.ca/jeff-cimbalo/euro-crisis_b_1086194.html

Nevertheless, what the US would like to do about the pressing European financial crisis? Given the controversy in this matter, people will give opposing views. If my memory can recall correctly, in the last televised republican presidential debate in Michigan some days ago, Herman Cain and Mitt Romney and others said that US should not intervene to rescue EU. I found their position as detriment especially when we continue to rely on (them) politicians. First, reading the report by James K. Jackson of February 1 2011 I found that Europe holds $2 trillions of US investment (about 70% of US investment abroad). http://www.fas.org/sgp/crs/misc/RS21118.pdf. in any case, US as global economic player should wary some. When a neighbor’s house is burning you cannot sit dull. You do something.



Wednesday, November 16, 2011

 

The Best Party


If the ideal government is one which is thoroughly prevented
from using its force and coercion to accomplish anything other than protecting
our property rights, what would this look like? Surely this government would look
vastly different from the one we are currently subjected to. Due to a personal
view that anyone in power should not be in power because they want to be in power
and thereby gain the prestige riches and power that go along with it (Plato); I
can’t help but think that a government which countenances libertarian values is
inherently impossible. If I reason correctly, then this is a tragedy, and all
we have left to do is fight the government tooth and nail for every right it
tries to take away from us.
What if I don’t reason correctly? What if it is a possible
to elect the type of government or government official who has identified
problems with the status quo, is capable of stringing together coherent
sentences which relate his views to the masses, has surrounded himself with
loyal friends rather than plundering politicians, and is in no way interested
in the prestige surrounding political office but just wants to get in, fix some
stuff, and get out?
Consider Iceland. The situation which I will eventually claim
is analogous to what a free market government would potentially look like is
not truly analogous. The United States has a population of roughly 300 million
people. Reykjavik, Iceland has a population of about 120,000. The Unites States
no doubt has a wider spread of viewpoints, a larger government, more money,
more power, and more to lose (Iceland declared bankruptcy in 2008). It seems
unlikely that the situation which has occurred there would ever occur here.
Jon Gnarr and his party, The Best Party, won the 2010
election for mayor of Reykjavik. This city is home to more than a third of the
country. Among the issues on his campaign platform included promising polar
bears in the zoo, free towels in public pools, and Disneyland in the airport.
To those watching the campaign progress, it appeared to be a joke; Gnarr is a
well-known comedian and musician in Iceland. Then he won and the joke became a
reality.
Under the surface of the comedic campaign videos slogans and
promises which he prefaced with the claim that many would not actually be
fulfilled (as he said, he’s a politician after all) was a disgruntled citizen.
In the aftermath of the 2008 bankruptcy he is quoted as finding himself in a
moral dilemma; it seemed he owed money to Britain and the Dutch that he himself
did not spend so he decided to do something about it. It wasn’t a frantic grope
for power, but a desire to upend the corruption of those who were previously in
power which led him to make his election bid.
What is more is that behind his promises which seem
initially absurd, hid decent rationale. Bring the polar bears to the zoo, he
proclaimed, because many more had been swimming ashore due to ice caps melting
and instead of continuing to shoot them, his plan was to put them to good use. Gnarr
supported free towels in the public baths to draw in tourism; public baths
count as spas under European Union law only if they provide free towels.
Regardless of how good or bad these ideas are I suppose that
my main point is that Iceland had a man running for election who was not doing
it out of political prestige, he simply wanted to make changes. Gnarr was more
than willing to make fun of himself and the political process he was partaking
in. He was honest and effective and was surrounded by people he trusted and
upheld the same values. And Reykjavik voted for him. They realized that the
current system is flawed, and that it takes someone outside the system to
change it. What would happen in America if someone ran for president, or any
office for that matter, in the same honest and delightful manner?
Also, just for viewing pleasure, this is his campaign song
and video.
http://www.youtube.com/watch?v=xxBW4mPzv6E

Tuesday, November 08, 2011

 



Can a Tsunami Hit Politics not Economics in any Given Country?

Looking at what is happening around the world; one would argue that politics and economics are indeed intertwined. Therefore, when there is a fire in economy, politics will feel the heat. This may be true when you observe what is going in Eurozone. Greece, one of the European members was to be bailed out by Euro bank because it was almost on the edge of a financial precipice. Because of the flip flop, George Papandreou, the Greek prime-minister, calling - and then cancelling - a referendum on the bailout plan.  Papandreou is to resign because he was seen as incapable for assuring other European members that they will pay back.

Also, due to prevailing economic-political situation, Italy may be the next. Next, the politic and economic sphere in Greece pushed stocks around the world into the fresh shockwaves of doubts about the sustainability of the Eurozone.
Stacy Meichtry, in Wall Street Journal; quotes Girgio Napolitano, Italian president saying that Silvio Berlusconi, Italian prime-minister is to resign and a new national unity government is to be formed in order to tackle and overhaul Italy’s economy and take immediate steps to reduce its 1.9 trillion euro debt.

US politics is not safe when it comes to the influence on politics and economics vice versa. According to Daniel Eisenberg, University of Michigan and Jonathan Ketchan, University of Southern California contended in their article “Economic Voting in the US Presidential Elections: Who Blames Whom for What”  in which they presented  four evidences that influence voters namely:

 1) Which is more important for determining people’s votes, national or local economic conditions?

2) What time frame do people consider in economic voting?

3) Which demographic groups are most sensitive to the economy in their voting behavior?

4) How does economic voting depend on the political context—in particular, whether a candidate is running for re-election, and whether the incumbent party also controls Congress?

To sum up, their findings showed how economic conditions influence greatly voter’s decision.

Reference

http://www.bepress.com/cgi/viewcontent.cgi?article=1285&context=bejeap

http://online.wsj.com/article/SB10001424052970203804204577016213985874218.html?KEYWORDS=greek+debt

http://online.wsj.com/article/SB10001424052970204190704577025613250061628.html?KEYWORDS=italy



Sunday, November 06, 2011

 

Oh, Ayn Rand...

So mostly this article has nothing to do with economics, but there is a small part that I have some problems with and thought I would dish them out here. So the article is about Ayn Rand's Objectivism (by the way my 'i' key is not workng so well, it is highly probable I will miss a couple), and guiding your life by such values. Apparently she wrote a book detailing out what she means by each of the 4 objectives, however I have not read it. A friend of mine sent me this site telling me how much she thought I would love this yadda yadda. One of the problems is that she doesn't know about my feelings on Ayn Rand, but when I did read this little abstract, I found myself thinking 'Gee, Ayn Rand should have taken an Economic Freedom course'. On the surface (or rather if these two paragraphs - numbers 3 and 4 by the way), it all sounds fine and dandy, but I stopped and reread it and thought oh boy. And here's why:
First she talks about how man must do things for himself, not for others, he must act in his own rational self-interest. But this implies very little human connection. It may not be in your self-interest to loan a family member money, but you do it for them out of love. (And if this blog was about more than just economics I would go into, what is life without love?). It also implies that people know all the things they need to know in order to make 'rational' decisions, as we have discussed many times in class, this is simply not true. People do not get to have all of the facts they need when making decisions.
She also talks about how the only way to have growth in a society is by banning physical force. That is all fine and dandy (even though it is likely that we have less growth now, we still do have growth, and physical force). But, I take issue that is specfically says physical force, and then she goes on to talk about how persuasion is necessary to organize human activity. The government does not hold a gun to my head and force me to pay my taxes in that manner, but rather they force me by using persuasion that paying my taxes is better than going to jail. Also, necessary for the organization of human activity, what? I don't necessarily have anything to combat this with, but mostly because I don't understand. Perhaps we have different definitions of persuasion, and this is where these problems really lie. Persuasion to me has always had a negative connotation, people don't try to persuade you into doing things that you want to do, it is usually not a good thing. In what I have read she basically replaces 'entrepreneur' with 'persuasion' which doesn't work very well or make much sense.
Another claim she makes is quite funny, she says that capitalism is the only system which bars physical force. Ayn, did you do your homework?
She also makes a point to talk about using capitalism in order to achieve the highest moral principles of man's life. I pretty instantly get nervous whenever the word 'moral' comes into any discussion of economics. While I can hope that she simply means that the purpose of a man's life should not be to murder every person he ever sees and what not, it is still ambigous and makes me become skittish.
One last issue, Ayn rather quickly says that the state and economics should be separated, "in the same way" that the state and the church are separated. So they should be only kind of/sort of separated is what you're saying?
Maybe one day when I'm not devoting all of my time to work, school and my dog I will read this (though not very likely, I'm not an Ayn Rand fan), and I will think 'gosh how silly of me to have bashed this in such a way, this philosophy is in fact the greatest thing I've ever heard of!' in which case I will log back onto this blog (if I can) and announce my apologies, but I wouldn't hold my breath on that one. And upon reading a comment on my last blog, perhaps I should bite my tongue on my opinions that differ from these hot-shots, for Ayn Rand might come back from the grave and challenge these views I have presented in this blog.

Saturday, November 05, 2011

 

Guy Fawkes

"Remember, remember, the fifth of November, the gunpowder treason and plot."

Today is the four-hundred and sixth anniversary of a failed attempt by English Catholics to destroy the English Parliament. Made popular in recent years by the movie "V for Vendetta", today is heralded as a day of remembrance for "fairness, justice, and freedom" as "more than words, but perspectives."

The problem that I have with this is how utterly skewed this perspective is. In the perspective of today, Guy Fawkes bears a striking resemblance to Islamist terrorists, a fanatic who attempted to impose his minority will on the greater populace through an act of gross violence: the murder of most of a somewhat representative government...well, not really.

For the government of England was hardly better than the beliefs that Fawkes supported. Neither the English Parliament nor the Catholic autocracy represented by the influence of the Pope believed in "fairness, justice, and freedom." The main criticism of "the Church" throughout history has always been for its behaving too much like the State.

All too often the State seeks to control the influence that "true faith" holds over a populace. It need only find something it can control and that people can wish to believe. The popular wish is that humanity is somehow capable of achieving utopia if left to its own devices. The main problem with such a wish is the decision our professor spoke of in class. Each person must constantly choose to either give of themselves in order to please others or to use force in order to compel others to please them. It appears far simpler for those who possess great force to use compulsion, and humanity prefers simplicity.

Guy Fawkes chose the latter because the people who led his "true faith" were proponents of the Church acting like the State. If there is anything to be learned about "fairness, justice, and freedom" from Guy Fawkes, it is simply that he supported none of them, for the State is so often the thief of liberty, rather than its enabler.

 

Perhaps you should occupy your free time instead...

I’m surprised to find, in a blog dedicated to one of the more politically charged classes on campus, that no one yet has mentioned Occupy Wall Street. Media coverage of this movement is spreading as quickly as the gathering of demonstrators themselves. Everyone from Fox News, the BBC, National Public Radio, and all those in between have has put out extensive new coverage on the protests since they began in September. However, any well-defined explanation as to the purpose of their assembly is hard to find. Even for me, I had very little specific information other than the fact that their numbers were, and still are, rapidly growing. Herein lies my issue and the purpose of this blog—why assemble if not for common purpose? I beg the question, then, that If the purpose of peaceful assembly is to combine the voice of individuals to form a group in the effort to achieve a common goal, then what are they really doing? I offer a possible theory as to the real aim of this movement, as well as some basic facts about their purpose, in case anyone else finds that they are as confused as I am.

Unfortunately, however, it seems that there is so little commonality amongst the various off-shoots of Occupy Wall Street that almost no information about the movement is to be found from scholarly sources. The Economist magazine seems to agree about the cluttered nature of the protests: “Some want to tax the rich, others to decertify business schools. Hostile references to Wal-Mart and Starbucks outnumber those to any Wall Street firms.”(2011). It would be easy to simply say that Occupy Wall Street unanimously operates under the slogan, We Are the 99%. ‘But of course! They are protesting the widening gap in wealth between the infinitesimal minority of the super-rich and the growing number of those who live in poverty!’ However, it would be just as easy to claim that they are protesting government corruption being fed by corporate lobbyists, as indicated on the Occupy Wall Street website: “Our nation, our species and our world are in crisis. The US has an important role to play in the solution, but we can no longer afford to let corporate greed and corrupt politics set the policies of our nation.” The problem is that these protests are directed toward both issues, and even more still. Occupy Wall Street, while possibly having had a common end in mind in the very beginning, has grown into a network of increasingly smaller and dissimilar movements, each of which has their own reason for protesting.

As Mises would say, they have become special interest groups, each lobbying for the realignment of law in their favor. Because Occupy has fallen into this category, the strength of its movement becomes immediately less credible: “On the one hand, they are obliged to rely on only a small group, because privileges cease to be privileges when they are granted to the majority; but, on the other hand, it is only in their guise as the champions and representatives of the majority that they have any prospect of realizing their demands.” (Mises, 169). The very use of the 99% slogan indicates this behavior. They are referring to their cause as being an issue that affects the majority of the country, rather than the minority only, or the group with the special interest in mind. Ignoring the fact that the original reason for their protest is based in factual misdirection, the very method of their protest now bears no efficacy in their fight for the changing of the law.

Their methods are firmly set and are being followed by an increasing number of people every day. Whatever their goals are, I would not quickly assume that the Occupy Wall Street movement would die out before seeing those goals fulfilled, even in part. That’s what scares me; if their goals are not all similar, how can they all possibly be achieved? Let’s assume for a moment that the entirety of the Occupy movement in the United States had in mind only three goals whose accomplishment would end the need for their protest, those are ending government corruption, removing the power of corporations to create corruption within the government, and shortening the income gap between the wealthy and the poor. How would those goals be accomplished? The answers to the first two are easy, and can be accomplished through the reinstatement of policies that are more consistent with liberty. Particularly, this means the removal from law any policy that grants special privilege to any particular group. However, the answer to the inequality of wealth is non-existent. In any economy that adheres even loosely to the principles of free exchange and private property there will be inequality, and for good reason. Even Mr. Rockwell would agree: “In fact, that 1 percent includes some of the smartest, most innovative people in the country — the people who invent, market, and distribute material blessings to the whole population. They also own the capital that sustains productivity and growth.” (Rockwell Jr., 2011).

Whether or not it is Wall Street or Pennsylvania Avenue that is being occupied, the reason for the occupation must be consistent amongst all of its members. In the same way that I cannot simultaneously protest for lower tuition rates and wider availability of quality education, Occupy Wall Street cannot simultaneously protest for a multitude of different issues. With that being said, I invite the occupiers to protest randomly to their hearts’ content, while I sit back and watch the real issues unfold unchallenged by any serious-minded intellectuals.

Works Cited:
Not quite together. (Cover story). (2011). Economist, 400(8756), 73-75.

Von Mises, L. (2002). Liberalism: In the classical tradition. (3rd ed.). Irvington-on-Hudson: The Foundation for Economic Education, Inc. Retrieved from http://mises.org/books/liberalism.pdf

Rockwell Jr., L. H. (2011, October 24). The state is the 1 percent. Retrieved from http://mises.org/daily/5776/The-State-Is-the-1-Percent

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