[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[Senate]
[Pages 16149-16152]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 TRADE

  Mr. DORGAN. Mr. President, there is a lot of talk and politics on the 
floor of the Congress always about something called the American dream. 
People talk about the American dream. I suppose we reflect on that and 
think the American dream is about a time the American people have a job 
that pays well, a job with security, a career with a growth ladder to 
it, a family, a home, living in a nice community, living on a safe 
street--the American dream.
  We look at the history of this country and discover that beginning 
early in the last century, we started changing things in America--
lifting up people, doing a whole series of things to develop a group of 
middle-income Americans. We have been enormously successful, perhaps 
more than any other country in the world. We expanded a middle class.
  Now things are changing, and we see that people are upset, nervous, 
and in some cases angry. We see reports that they worry their children 
will not have it as good as they have it. They worry about the future.
  What is at the root of all of that, and what can we do about all of 
that? Everyone wants to do well. All of us have hopes and aspirations 
for ourselves, our children, our families--the American dream. Someone 
once asked J. Paul Getty: How is it that you can be successful? Give me 
the elements of success.
  He said: It is very simple. No. 1, go to school and get the best 
education you can get. No. 2, get a good job and work really hard. And, 
No. 3, strike oil. That is the advice of J. Paul Getty.
  I suppose that works if you are J. Paul Getty. But his advice, of 
course, makes a lot of sense on the first two points: get the best 
education you can and get a job and do well, work hard.
  The problem is today, in late September of 2010, a lot of people woke 
up this morning without a job and cannot find one. It is estimated 
there are about 20 million Americans this morning who woke up 
unemployed. Most of them put on their clothes and went out looking for 
work, a triumph perhaps of hope over experience because many of them 
have tried for a long while and have not been able to find a job. And 
they are very worried there may not be a job for them in the future.
  We had 2.1 million workers in the past two years having to leave 
manufacturing plants, losing their jobs as manufacturing workers. Those 
are often the very good jobs. They pay well with good benefits, in most 
cases. Mr. President, 2.1 million of them have lost their manufacturing 
jobs in the last 2 years; more than 5 million have lost their jobs 
since 2000.
  What do we do about that? What can we tell the American people when 
they see their neighbors, their friends, and their relatives searching 
for a job, having been laid off from somewhere they worked for 15, 20, 
25 years? Then they read in the paper that in Stanleytown, VA, a 
company was started by a man named Thomas Stanley, a young dairy farmer 
in southern Virginia, who decided he wanted to create furniture that 
was of superior craftsmanship and affordable still, so he started 
making furniture. It became Stanleytown, and he employed highly skilled 
craftsmen, 1,300 people who carried on his vision at a manufacturing 
plant of 1.7 million square feet.
  Then those who make Stanley furniture woke up a couple months ago and 
read this in the paper:

       Stanley Furniture's decision to close its plant in the 
     small town that bears its name fell like a hammer blow on 
     southern Virginia and resounded across an industry 
     increasingly moving overseas. More than 500 employees will 
     lose their jobs this year as the manufacturer shuts down its 
     Stanleytown, VA, plant, where the company has made furniture 
     since 1944.

  Where is it going? It is going to Asia. Those 500 people--I do not 
know their names. I cannot tell you who they are. I would not recognize 
their faces because I do not know any of them. But I am sure those 500 
people are paying an enormous price in their lives for having lost jobs 
at a plant in a company that produced a product about which they cared 
very deeply. Gone to Asia. Why? Were these bad workers? Did they decide 
it was a job, but just a job, so they were going to loaf all day and 
not do their work? No, it was not that at all. In search of low wages, 
this company decided: We are going to Asia to produce this furniture.
  I mention Stanley Furniture. The other day I mentioned a furniture 
company from Pennsylvania because I had just been to Philadelphia--
Pennsylvania House Furniture. It has a very similar story in many ways. 
Pennsylvania House Furniture, made for a century in Pennsylvania, upper 
level furniture, fine furniture made by craftsmen, one day it was 
purchased by La-Z-Boy, and La-Z-Boy decided: We do not want to make 
Pennsylvania House Furniture in Pennsylvania. We want to take the 
Pennsylvania wood and ship it to China, have them put it together, and 
ship it back to America to be sold. They told all the workers: You are 
done. It is over. The plant is closed.
  On the last product of the day, on the last day at work, these 
craftsmen who made this fine furniture for Pennsylvania House Furniture 
turned over the last cabinet that came down the line, the last one they 
had made, and they all signed their names--proud craftsmen working for 
a company that existed over 100 years, the last piece of furniture ever 
to be made with American hands. Jobs gone.
  The list is endless. This is not a short list. Hershey chocolates, 
York peppermint patties: ``The cool refreshing taste of mint dipped in 
dark chocolate will take you miles away.'' In fact, it will take you so 
far away it will take you to Mexico because that is where they moved 
those jobs when they shut down the mint Hershey's plant in the United 
States of America. It will take you miles away. It certainly took away 
the jobs of those who were working there.
  I am not going to go through all these charts because I have done it 
before. I know what repetition means around this place. But I want to 
talk just for a moment about the consequences of this to a lot of 
people whose names we do not know and faces we would not recognize but 
who are living as victims of something they cannot control. That is the 
erosion of America's manufacturing base with jobs shipped overseas 
wholesale and the hollowing out of America's manufacturing capability.
  Why does that matter? No. 1, because a lot of people are losing jobs 
who need jobs in this country. And, No. 2, this country will not remain 
a world economic power unless we have a world-class manufacturing 
capability. That is just a fact.
  The question is, When will we stand up for this issue and decide we 
have to do something about the export of American jobs?
  Paul Craig Roberts--I have met him--former Assistant Treasury 
Secretary under President Reagan said:

       Outsourcing--

  He means outsourcing of jobs--

     is rapidly eroding America's superpower status. Only fools 
     will continue clinging to the premise that outsourcing is 
     good for America.

  Another quote, if I may, from Dr. Paul Craig Roberts:

       In order to penetrate and serve foreign markets, U.S. 
     corporations need overseas operations . . . However, many 
     U.S. companies use foreign labor to manufacture abroad the 
     products they sell in American markets. If Henry Ford had 
     used Indian, Chinese and Mexican workers to manufacture his 
     cars, Indians, Chinese and Mexicans could possibly have 
     purchased the Fords but not Americans.

  Because they would not have had the jobs. Pretty prescient. Pretty 
interesting.
  This is a chart that shows Stanley Furniture's workers in the 
manufacturing plant. But, of course, that was then, and now it has gone 
to Asia.
  I want to show this picture only because the Los Angeles Times needs 
to know this. I spoke of this subject some while ago and showed a 
picture of the dancing grapes that represented the advertising campaign 
for Fruit of the Loom underwear. They left America and are produced 
elsewhere. The Los Angeles Times wrote a piece saying I was on the 
floor of the Senate talking about underwear, not describing that I was 
talking about trade and the movement of jobs overseas. If they write

[[Page 16150]]

about it again, they might mention I was talking about jobs moved 
overseas that were performed by American workers to produce Fruit of 
the Loom.
  I have described often Radio Flyer--a little red wagon made in 
Illinois for over 100 years by an immigrant who put together a 
company--that almost every child has experienced. Almost every American 
child has ridden in a Radio Flyer little red wagon. But they are not 
made in America anymore. They have gone to China.
  Huffy bicycles, gone to China; left Ohio, gone to China. Not made for 
$11 an hour by an Ohio worker, as was the case, but made now by Chinese 
workers who make 50 cents an hour, working 7 days a week, 12 to 14 
hours a day.
  I have often mentioned, and will mention again, that all of these 
folks, on the last day of work, when they walked out to the parking 
lots after having been fired so their jobs could be moved to China, 
left pairs of empty shoes in the parking lots saying: Yes, you can move 
our jobs, but you will never replace us. They are never going to 
replace these workers.
  This represents a photograph of a company called HMC. Not everybody 
is moving overseas. There are some manufacturers--and I want to pay 
attention to what the owner of HMC said recently. They make high-tech 
gearboxes, high-tech machinery. HMC--made in America and enormously 
proud of it.
  Let me mention what the president and CEO of HMC said:

       Offshoring in search of higher profits is a mistake . . . 
     because it ignores manufacturing's larger purpose in U.S. 
     society.

  This is from the CEO of an American manufacturer. Further he says:

       It's my belief that every American citizen, not only me, 
     should feel strongly about maintaining one of the most 
     important cultures we have, and that is manufacturing.

  Good for Mr. Robert Smith, wherever he is. Good for Mr. Smith, 
president and CEO of HMC, believing that manufacturing is important in 
this country.
  What does all this mean? Our economy is in some significant trouble 
for a couple of reasons. No. 1, for about a decade and a half or two 
decades, we have pursued a different trade strategy--a trade strategy 
in which we have refused to stand up for our economic interests.
  For the first 25 or 30 years after the Second World War, it was just 
understood that we were the biggest, the best, the strongest--we were 
American. Whether it was trade competition or any other competition, we 
could beat anybody in this world with one hand tied behind our back. 
Much of what was imported were trinkets that were inexpensive trinkets 
that were pretty worthless. We made products that were made in America, 
products that lasted, products that worked, products on which you could 
count.
  But in the second period following that first quarter century after 
the Second World War, things have changed. We have largely had 
concessional trade practices. It used to be we just did outright 
foreign aid to help other countries. Not anymore. We have for the last 
20 years or so done concessional trade practices to help other 
countries. We have said: We will do a trade agreement with you that is 
unfair to us because we are bigger and stronger and better than you 
are. So here is a trade agreement. We have done that time after time. 
Therefore, we now have very large trade deficits.
  Let me show the consequences of a trade agreement.
  We have trade agreements with Korea. Here is the issue of automobiles 
with Korea. Last year, because we had a deep recession, we were not 
buying as many cars. Last year the Koreans put on boats and sent to 
this country 467,000 cars made in Korea--467,000 Korean cars. Those are 
Koreans who go to work in the morning to a job. They are making cars. 
They are pleased as punch they make cars because they sell them in 
Detroit, Bismarck, and Denver.
  Here is what we were able to sell in Korea: not 467,000 cars, Korea 
allowed us to send 6,000 cars to Korea.
  One might say: Is that an accident? Of course, it is not. It is 
exactly what the Korean Government wanted. They want the jobs in their 
country. They want to make the cars in their country and send them 
here, and they do not want our workers making cars we send to Korea.
  If you wonder about that, I have another chart that shows what you 
will confront on the roads in South Korea. If you drive down the road 
in South Korea, what you will see are a lot of vehicles, and you will 
see almost no foreign vehicles. Ninety-eight percent of the cars on the 
road in Korea are made there. They are made and manufactured in that 
country. Now, is that an accident? That is exactly what the Korean 
Government wants. They do not want foreign cars, and they do all kinds 
of things to keep them out. They want jobs for their people.
  So we now have a trade agreement with Korea that we have not yet 
ratified or voted on in the Senate, and they didn't address the 
automobile issue. It is unbelievable to me. Why would they do that? How 
about standing up for our interests, for our workers?
  So, Mr. President, the reason I came to the floor of the Senate is 
that there is now on the calendar a piece of legislation that would at 
least begin the process of trying to even up some of the trade issues. 
We actually, strangely enough, give a tax benefit for U.S. companies 
who decide they are tired of manufacturing in America. If a company 
says: Let's get rid of those workers. Let's lock up that manufacturing 
plant. Let's send the jobs to Senshen, China, and manufacture there. 
Then we will ship those bicycles and wagons and trailers and trucks and 
garage door openers back, and we will sell them to Americans. That is 
what we will do. And our country says: You know what. That would be 
good. Why don't you do that--fire your workers, get rid of your 
manufacturing plant, go to China, and I tell you what we will do. We 
will give you a tax break for doing it.
  We have voted four times in the Senate to eliminate that tax break. I 
have offered that piece of legislation four times. On all four 
occasions I have lost the vote. We are now about to vote again in the 
coming days. Maybe at last--at long last--when 20 million Americans 
can't find work, maybe we will see if we plug the drain just a bit on 
these jobs that are moving out of this country at a rapid pace to be 
located in low-wage countries around the rest of the world. Maybe now 
is the time. Maybe people here will say: You know whose interests I 
stand up for? The workers in my State, American workers, people who are 
producing good products that say made in America.
  When I speak this way, there are some who will say: Well, you are 
being a protectionist. You want to change things. You are being a 
protectionist. You are a xenophobic isolationist stooge. You don't get 
it at all. It is a new world order. We have all these countries who can 
do things cheaper than we can do them, and you don't seem to understand 
that. So you are just a protectionist.
  Well, let me plead guilty to wanting to protect our country's 
economic interest. I would hope every desk in this Chamber would be 
occupied by someone with similar instincts and wanting to stand up and 
protect the economic interests in this country.
  I am not interested in withdrawing from the world. I am saying, 
however, that after a long struggle and doing the things that are 
necessary to improve things, as we have done in the struggle for 
workers' rights, the struggle for safe workplaces--and people were 
killed over those struggles. I described in the first book I wrote 
about James Fyler who was shot 54 times. You know why he was shot 54 
times in Ludlow, CO? Because he believed people who went underground 
and dug for coal ought to be able to work in a safe workplace and be 
paid a decent wage, and for that he was killed.
  We have struggled for a century to raise standards, to get safe 
workplaces and decent wages. Now, all of a sudden we are told it is a 
new world order. We should compete with workers who are going to work 7 
days a week, 12 to 14 hours a day, for 50 cents an hour. If we can't 
compete with that, tough luck.
  That is what they told all the folks at Huffy bicycles. They said: If 
you

[[Page 16151]]

can't compete with the Chinese prices, you are out of luck because that 
is our standard. The list is endless. Just about every kid has played 
with Etch A Sketch. Everybody knows what Etch A Sketch is, a toy made 
in America. It was the principal employer of a town in this country. 
But no more. Walmart told Etch A Sketch: You won't be marketing at 
Walmart unless you meet this price, and Etch A Sketch has gone to 
China. All those people who were proud of making a children's toy are 
now not working.
  Mr. BROWN of Ohio. Mr. President, will the Senator yield for a 
question?
  Mr. DORGAN. I would be happy to yield.
  Mr. BROWN of Ohio. I have been listening with fascination to the 
Senator's speech because there is nobody who comes to the floor and 
better explains jobs, trade, trade policy, and tax policy and what it 
does to our communities and our workers.
  The Senator mentioned two very well known American companies, and 
both happen to be from my State--Huffy bicycles and Etch A Sketch, 
which is a company called Ohio Art in Bryan, OH. That is exactly what 
happened. Walmart came to Ohio Art and said: We want to sell Etch A 
Sketch for less money than we are selling it for now. So they had no 
choice.
  But let me ask the Senator, it seems to me that there has not been 
anytime in recent history where U.S. companies have put their business 
plans together in this way: Instead of manufacturing something, cutting 
costs, and treating their workers decently and contributing to the 
community--which American companies have done for generations and is 
why we have such a strong middle class--it seems that the business plan 
for so many large American companies is to move their production 
offshore, obviously getting less expensive labor, avoiding 
environmental and worker safety rules, and then selling the product--
well, first lobbying Congress to change the rules, as they did with 
PNTR for China, but moving their production out of the country, 
offshore, producing it, and then selling it back into the home country.
  That is a curious business plan that many American companies follow. 
I hear those companies say to me: Well, we have no choice but to go 
offshore for the cheapest production because our competitors are doing 
that, even though they lobbied Congress to help change the rules. I 
mean, it is a bit cynical but a curious business plan that you leave 
behind the community that built you up and you move somewhere else and 
then you sell the products back to the country in which you were 
founded.
  Mr. DORGAN. I would say to the Senator from Ohio that it is a 
business plan these days for too many companies. Not all, but too many. 
There are some companies--and I just described a company, a CEO, and I 
was giving him credit because what he said is important--a company 
called HMC. It is a company that manufactures very high-tech products 
in this country. He says:

       It's my belief that every American citizen, not only me, 
     should feel strongly about maintaining one of the most 
     important cultures we have, and that is manufacturing.

  The fact is, we are in a situation where a lot of companies have 
decided they would like to produce elsewhere, hire other workers, but 
they would like American consumers to buy their products. The question 
in the longer term is, Who is going to buy those products if American 
consumers don't have jobs? I mean, that is the question.
  I have talked a little about China. I am chairman of the 
Congressional Executive Commission on China, and I just chaired a 
hearing for 2 hours about the issue of piracy and counterfeiting and so 
on in China. One of our witnesses described something I had written 
about in my book as well; that is, American businesses should know 
their intellectual property is not secure in China. It will be stolen.
  I am not a big fan of them--in fact, I have fought the pharmaceutical 
company pretty tough on the floor of the Senate--but Viagra, made by 
Pfizer, was quickly reengineered in China and just sold without any 
respect for property rights or intellectual property rights. In fact, 
the witness over at the hearing this afternoon said the Chinese, once 
they reengineered Viagra and sold it on their own basis, had a new 
twist on it. They were putting it in soft drinks and hot dogs. So it 
was kind of interesting to hear this guy, who is an expert in 
intellectual property rights, describe his view.
  He finally said, by the way, Pfizer has won a case against the 
Chinese for reverse engineering of Viagra. But this discussion is not 
about that, it is about jobs in virtually every industry in this 
country. There are service industries that can never leave, of course. 
You can't take a taxicab driver's job and move it to China or India 
because they have to drive a cab up and down an American street. But 
Alan Blinder and others have said we are talking about the potential of 
tens of millions of additional American jobs leaving unless there is a 
strategy to understand that our participation in the global economy is 
designed to raise up others, not push down our standards. It is 
designed to be in our economic self-interest to try to keep Americans 
employed in good jobs that pay well.
  So we have a lot to do. I mentioned, Senator Brown, that we are 
likely to have another vote in the Senate in the coming days on the 
question of shutting down this unbelievably ignorant provision in tax 
law that says if you leave America and get rid of your workers and 
padlock your plant and then go produce the jobs in China or India and 
then sell back here, we will give you a tax break for doing that. We 
would like to reward you for doing that. The other side of that is that 
a lot of American business men and women who started their companies 
here don't intend to go anywhere. They are here and they are proud of 
it and they are not leaving. They are going to hire their friends and 
neighbors in their communities, and they are going to make the best 
products possible. They are going to stick a made-in-America label on 
it. But they are disadvantaged. It is not just the workers but those 
American business owners who are now having to compete against the one 
that was across the street and then went to China and now has a lower 
tax rate because our Tax Code says that is fine.
  I hope at long last that maybe we will have enough people here with 
the courage to say: It is not fine with us. It is not fine with people 
who are unemployed in this country. It is not fine with business men 
and women who are disadvantaged because of it.
  Mr. BROWN of Ohio. Will the Senator yield once again?
  Mr. DORGAN. I will be happy to yield.
  Mr. BROWN of Ohio. I thank the Senator.
  I would add that a major manufacturer that leaves from Minneapolis or 
leaves from Cleveland or from North Dakota is a company that has the 
resources to do that, and that company has a multitude of component 
manufacturers in its supply chain and that large company that leaves 
may be its biggest customer. Perhaps it is a big assembly plant that 
leaves to go to China. The component manufacturer that sells to that 
auto assembly plant has all of a sudden lost its biggest customer. It 
is not big enough to move to China, so it loses 30 percent of its 
customer base.
  So it is not just the company that moves and what that does to 
American workers and companies and communities, it is also those 
multitude of component manufacturers. In the auto industry, for 
instance, there are way more people working in the supply chain than 
there are in the actual assembly plant. So in the wake of a major 
company moving overseas, we see devastation in the entire supply chain 
of component manufacturing. I am sure you saw that with Huffy bicycle. 
There is the manufacturer that made the steel, that stamped the 
fenders, that made the tires and the spokes that were taken to Huffy--I 
think to Celina, OH, in those days--to assemble. So all of them lose.
  In smaller communities, as the Senator knows, a manufacturing plant 
oftentimes has a husband and wife both working at the same plant, 
making $12 to $15 an hour. Their whole lives are

[[Page 16152]]

upended because all of a sudden they have lost both jobs in their 
family.
  Thirty years ago, 30 percent of our GDP was in manufacturing and only 
11 percent was in financial services. That number has flipped now, and 
look where it got us. Only 11 percent of our country's GDP is now as a 
result of making things. We know how to make things in this country, 
and we are losing that ability. Without a real manufacturing policy--
more than a strategy but a policy--like every other country has, we are 
going to see a decline in the middle-class long term.
  I thank the Senator.
  Mr. DORGAN. Well, I thought it was interesting that when the Senator 
from Ohio and I worked hard on putting together the Economic Recovery 
Act to try to put a net under this economy and stop it from 
collapsing--and we were probably close to having a complete collapse. 
Despite the folks who come to the Senate floor who say no jobs were 
created, the CBO says 3 million jobs were created or saved. But when we 
put that together, Senator Brown from Ohio and I and others wrote 
something called a ``Buy American'' provision, and people nearly had 
apoplectic seizures here. They were doing cartwheels in the Chamber, so 
upset and concerned and nervous about what this would do, if with our 
money, in order to employ our people, we decided to buy our products. 
How selfish is that, they would say.
  It was exactly the right thing to do. Why would we try to stimulate 
economic recovery in America by buying goods from China or Japan? So 
what we tried to do is to say that there should be a preference with 
these funds to buy American. But even that was unbelievably 
controversial. We got it done, and I am pleased we did.
  While the Senator is here, I wanted to make the point that the Huffy 
bicycle story is almost the perfect storm of everything that is wrong. 
These are workers in Ohio who made $11 an hour plus benefits and then 
they all got fired. I have described about their leaving their empty 
shoes in the parking lot on the last day of work and so on. But the 
Huffy bicycle was sent to China. I described the conditions under which 
they are now made. This brand still exists. It is still sold in major 
American stores, Wal-Mart and Kmart and so on. But once it was sent to 
China, it declared bankruptcy and then the Chinese bought the brand. 
The bankruptcy meant that not only did the workers in Ohio lose their 
jobs, the Federal Government here, under the Pension Benefit Guaranty 
Corporation, assumes the pension of the fired workers, and China ends 
up with the brand. We still buy the bicycles but the people are out of 
work and we are stuck with the pensions.
  It is almost a perfect storm of what is wrong with what we are doing 
in this country. The question is, when will it ever change? The minute 
we talk about it the Senator from Ohio will be called--well, he's one 
of those protectionists. He has a narrow head; doesn't understand the 
breadth and depth of this new global economy. They say that about me 
and all of us who say this doesn't add up.
  We have to stand up for this country's economic interests. We don't 
need to put a fence around America. We don't need to decide there is 
not a world economy--there is a global economy. We need fair rules and 
to stand up for our economic interests, and that has not been the case; 
it has not.
  The question is what do we do about that. At least you can take a 
baby step in the right direction. One of my regrets, serving in this 
institution, is that I may well leave this institution without having 
succeeded, at least on this issue. I have been proud to participate in 
a lot of things that have been successful in advancing public policy 
but this has meant a lot to me. I think America is losing its 
capability, its energy, it manufacturing base. People are losing hope, 
with nearly 20 million of them out of work. I think it is very 
important for us to understand we have to address this issue.
  There is no social program in this country as important as a good job 
that pays well. That is a fact. We have to find ways to put people back 
to work in this country. People say innovation--I am all for 
innovation. But we innovate, we create the product, but they 
manufacture it somewhere else and the jobs are gone. It is very 
important for us to rebuild our manufacturing capability in this 
country.
  I said at the start we will not long remain a world economic power 
unless we have world class manufacturing capability. The American 
people need to see some hope from this Chamber. At least one step, one 
ray of hope would be if we decide in the coming several days to enact 
legislation that is now, I believe, rule XIV'ed at the desk, that we 
likely will have debate on--and I will be here during that debate--that 
will say finally, at long last, we will stop, put an end to this 
insidious provision in the IRS code that says if you move your American 
jobs to China we want to reward you with a tax break. That has to end. 
It has to end, the sooner the better.
  Let me end by saying there is plenty in this country that needs 
fixing but there is a lot to work with because there is plenty right in 
this country as well. I have spoken previously about the New York Times 
1-inch story about a man named Stanley Newberg. Stanley Newberg, with 
his father, left his country in Europe to flee the persecution of the 
Jews, landed in New York, went peddling fish with his dad, went to 
school, an immigrant kid, went to college, became a lawyer, went to 
work for an aluminum company, managed the place, finally bought the 
place, then died. When they opened his will he left his $5.7 million to 
the United States of America, he said, with gratitude for the privilege 
of living in this great place. What a wonderful thing to hear. What a 
wonderful thing to do. It is a wonderful reminder, it seems to me, how 
important this place called America is in the heart of many people.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Washington.

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