Letting it burn

Obion County, Tennessee is a rural patch with eight towns in it, each of which has a fire department supported by local taxes.  If you live in one of these towns, and your house catches fire, your neighbors put out the fire through the agency of the fire department.

Some people prefer to live out in the unincorporated areas, perhaps so they can shoot things for dinner, perhaps so they don’t have to listen to the neighbors’ kids practicing the trombone, perhaps because they have a horse or two.  They give up various things that are affordable only in cities, like sewers, cable TV, a quart of milk you can walk to, and quick ambulance service, and pay less taxes. They also pay more for fire insurance than people who live in the district of a fire department.

Most rural areas in my experience have a volunteer fire department which pays no wages and raises money for equipment with bake sales and a barbecue on the 4th of July.  They will try to save your house whether you came to the barbecue or not, and often they provide a big piece of social capital for the community independent of fires.  Obion County has a system whereby rural residents can pay an annual fee of $75 for fire service from the nearest town.

There is absolutely nothing wrong with any of this so far, any more than there’s a moral affront when someone who owns his home free and clear chooses to underinsure it, whatever we think of the judgment of the homeowner. Obion County might or might not be better off with a county fire department; it’s up to the voters to decide.  And deciding to have one or not isn’t even a liberal or conservative decision; it’s an economic benefit-cost analysis.

The firefighters of South Fulton watched the Cranicks’ house burn to the ground yesterday (with his dogs and cat in it, can you believe?) because the Cranicks hadn’t paid their $75 subscription fee.  The internets and MSNBC have been buzzing with outrage, many commentators trying to make this some sort of symbol of conservative, Randian, or small-government philosophical chickens coming home to roost.

There is an outrage here but it has nothing to do with Obion County’s choice of public and private services, nor the idea of selling fire services by subscription, nor political philosophy.  It has to do with the fire department’s wasteful and reckless response to a house on fire, justified by a vengeful and stupid small-mindedness…OK, and a complete collapse of community obligation.  The proper response to the situation was to put out the fire, and then to bill Mr. Cranick for the service he asked for on the spot and said he was willing to pay for.  Period.  Put out the fire; who pays for what, how, is a decision that can be made later.  The $75 fee is an insurance premium, but against the cost of spraying water, not against the stupid and pointless loss of a whole house.  At the cost of perhaps $200,000 in value destroyed, the stupidity of the firefighters saved perhaps $2000 in labor and equipment wear and tear, all to teach a wrong lesson.  Notice:  if no-one in the county paid the fire charge up front, and the city charged everyone who had a fire for putting it out (with a lien on the house if necessary) the city fisc would be exactly as well off as it is now.

I think the Cranicks’ insurance company may have a cause of action against the city for wilfully refusing to abate an imminent hazard; I certainly hope it does.

If you do something stupid and get stuck on a mountain, we don’t let you die there; we rescue you if possible and then send you a bill for the search.  If a house is on fire, the proper action for a fire crew is to minimize the loss (put it out) and arrange who pays for the service later.  If the political leadership of Obion County is still trying to explain that this episode went down properly, they have a piece missing and not just a screw loose.

Author: Michael O'Hare

Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training. He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management. Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs. At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.

36 thoughts on “Letting it burn”

  1. I dunno. We do lots of ex-post inefficient things in order to maintain ex ante incentives — putting people in jail, for instance. I don't have an opinion about what the fire department should have done, but I don't see this as obviously wrong. There's a value in making rules and sticking with them. Whether or not the rules should be changed comes down to another cost-benefit test.

  2. Rules, Shmules – they should exist to serve us, not the other way around.

    Stupid rules should be changed.

  3. For anyone who sympathizes with the fire department, imagine other possibilities that could occur:

    A. The homeowner mailed his check for $75 but it got lost in the mail.

    B. The homeowner failed to pay because of illness (mental or physical).

    C. The homeowner did pay, his check was cashed, but the fire department, because of its own error, had no record of his having paid. In this case, the fire department would be liable for its breach of contract, but compensation for the value of the homeowner's destroyed property would hardly make the homeowner whole, as some of his property might be irreplaceable (the manuscript of the novel he'd spent the past ten years working on, family pictures or letters with sentimental value, etc.).

    By the way, I hope that animal rights groups get on the fire department's case.

  4. Municipal fire departments on Obion County are only allowed to charge a $500 fee to rural homeowners that haven't paid for fire service and request assistance. Apart from the woeful inadequacy of this amount, the fire department has no way to enforce collection of this fee and consequently less than 50% of these fees are actually collected.

    Running a modern fire department, even a volunteer one, is an expensive proposition. Equipment, maintenance, training, insurance, etc. all cost big money. We're all volunteer fire departments here on Long Island and taxes to pay for them are substantial. Bake sales and Octoberfests don't even begin to cover it. I suspect that homeowners in South Fulton a good deal more than the rural $75 fee in fire taxes per year.

    Mr Cranick had ample opportunity to pay this fee. The South Fulton FD sends out notices and follows up with a phone call to people who haven't paid.

    The outrage argument boils down to the taxpaying citizens of South Fulton having a moral duty to provide services to their rural neighbors even if those neighbors refuse to help pay for that service. Frankly, I just don't see it.

    Moreover, you're absolutely wrong is saying "There is absolutely nothing wrong" with the Obion County set up. Fire service is essential. It is morally repugnant for Obion County to expect its residents who reside outside municipal areas to simply freeload off the closest city for this essential service.

  5. "Notice: if no one in the county paid the fire charge up front, and the city charged everyone who had a fire for putting it out (with a lien on the house if necessary) the city fisc would be exactly as well off as it is now."

    No, that's not true. There is no reason to think that $75 times the number of homes in the community will equal the charge imposed on everyone who had a fire put out.

  6. The fact is, the homeowner admitted that not paying the $75 fire fee was a conscious decision on his part; he thought he would receive the service whether or not he paid.

    The fire department is a municipal fire department that has no obligation to put out fires outside its city limits (assuming that it does not have mutural aid pacts with other jurisdictions). The residents in the unincorporated areas of the county have rejected taxing themselves for fire protection.

    A lawsuit against the fire dept/city could very likely result in the city ending its fee-for-services to property-owners outside the city.

    The bottom line is that the county residents — and especially the homeowner in this case — have exhibited an astounding degree of irresponsibility.

  7. I really don't see the problem. Somebody made a bad choice, they suffered for it. If people don't suffer for making bad mistakes, how will they ever learn not to make them?

    Freedom and consequences for choices made. They're inextricably linked. A society which protects you from the consequences of your bad decisions will demand the right to make those decisions for you.

  8. Thanks for posting this. I can't get over the people who are defending the fire dept. (the chief, really, as he's the one who made the decision to not stop the fire).

    Plean and simple – the county commission fucked up. They ditched a resolution that had been in their for years to tax all residents for fire services. The jumping all over the fire victim is skirting the issue of the commission and fire chief. Other fires in the area to non-annual dues had their fires put out. Why stop at this guy?

    I can't imagine any other reason than that corporate-speak/philosophy has embedded itself so securely in peoples' minds that they are positively certain that it's the house owner's fault and only his fault. Even without knowing the whole story.

    "If people don’t suffer for making bad mistakes, how will they ever learn not to make them?"

    If that isn't a clear example of the strict father frame as George Lakoff describes it, I don't know what is.

  9. Fire protection is probably the last public service that ought to be privatized or made fee-for-service. This country experimented extensively with fee-for-service fire protection way back when, and rejected if for excellent reason. Fires spread; I would have ample reason to want my neighbor's houses protected even if some of them didn't care, and Professor O'Hare's failure-to-insure analogy is unpersuasive. A bad job by the citizens of Obion County in governing themselves is the root cause of the problem here, and after-the-fire fingerpointing is almost irrelevant.

  10. I do see a problem with the assumption that that it's OK to have a government that does not provide publicly-financed essential services to everyone. That is no way to run a country.

    Freedom from want and fear is also important. Where suffering can be reduced, it should be reduced.

    Not that this is axiomatic, but nor is it a given that countries that provides generous social benefits – including but not limited to free fire protection for everyone – should also be restrictive of personal choices.

  11. The outrage argument boils down to the taxpaying citizens of South Fulton having a moral duty to provide services to their rural neighbors even if those neighbors refuse to help pay for that service</i.

    If the taxpaying citizens of South Fulton have no moral duty to their neighbors, why are they bothering to provide services at all?

  12. "“If people don’t suffer for making bad mistakes, how will they ever learn not to make them?”

    If that isn’t a clear example of the strict father frame as George Lakoff describes it, I don’t know what is."

    Yeah, so? To name something is to refute it?

    "I do see a problem with the assumption that that it’s OK to have a government that does not provide publicly-financed essential services to everyone. That is no way to run a country."

    Actually, it IS a way to run a country. It's a way you don't like, but you're not everybody. Can you give me some OBJECTIVE way to determine which publicly financed services are "essential"? You know, so that your position doesn't collapse into a simple assertion that nobody is allowed to make choices you disagree with?

    The guy made his choice, and the only way people will be allowed to make choices, is if THEY, instead of other people, bear the cost of those choices. Collectivize the costs, the choices get collectivized eventually. That's why people MUST pay the price of their own mistakes, in order to remain free.

  13. Absent the right-wing memes, you don't need an IQ in triple digits to understand that a fire crew standing in front of a burning house and watching it burn down (assuming no special safety hazards exist) makes no sense whatsoever.

    It's entirely reasonable to expect the home owner to pay the real cost of the response rather than the $75 fee. That's a potentially costly but rational result of his bad decision. If the law doesn't allow the fire department to collect the actual cost of putting out the fire, that's a reason to change the law, not a reason to let the house burn down.

    Once you have a policy that you will let some houses burn down, you are now depending on the infallibility of bureaucratic paperwork to get your house fire put out even if you've paid the fee. Good luck with that.

  14. And thank you to Brett for demonstrating that Michael O'Hare is wrong. This IS a symbol of conservative, Randian, or small-government philosophical chickens coming home to roost. Straight from the horse's mouth even.

  15. "Fire protection is probably the last public service that ought to be privatized or made fee-for-service. This country experimented extensively with fee-for-service fire protection way back when, and rejected if for excellent reason. Fires spread;"

    Now substitute health for fire…

    I with those criticizing Michael on this. Running a society on Libertarian principles is stupid, stupid, stupid. But if people insist on doing so, they, more than anyone else, damn well deserve the consequences of their actions.

  16. I don't see how anyone standing on a piece of fire fighting equiptment watching a familys home burn down

    can call themselves a productive member of society. They all need to get another fucking job that doesnt involve helping people. Hey I got it —- they could all go to work for Brett as speach writers

  17. 1. Re the pets, this report has the following:

    "Paulette Cranick said that the house is a total loss but she is just grateful no one was injured. She said they have lost everything, including two dogs and a cat, some precious antiques including a 150-year old bedroom set, and memorabilia including her kids' and grandkids' report cards and photos of her parents and grandparents.

    Read more: http://www.insurancejournal.com/news/southeast/20

    However, the fire spread slowly from the field to their house, and there would be no reason to leave the animals in the house to die. My *guess* is that they ran off (and are now "lost") and murky reporting has people leaping to conclusions. If someone has something definitive that would be interesting.

    2. Re insurance:

    "I think the Cranicks’ insurance company may have a cause of action against the city for wilfully refusing to abate an imminent hazard; I certainly hope it does."

    Apparently, yes and no:

    "The family has coverage with Farm Bureau Insurance through local agent, Josh Simmons, who raced to the scene of the fire as soon as he learned about it….

    …He said the insurance policy has a provision for a reduction in payouts if a fire protection service has not been subscribed but that the insurer has not enforced that in these situations."

    As to why not, I can only guess it is a matter of PR. As to why the insurer relies on the homeowner to mail in a separate check to the town, I have no idea – one might expect an escrow arrangement where the insurance premium includes the $75 fire service subscription and the insurer makes sure the town is paid and the homeowner is properly listed.

    And for anyone who still has even a sliver of confidence in home mortgage lenders, apparently the lender doesn't double-check their fire subscription status, either:

    "The Obion County, Tenn. family whose home burned on Sept. 29 while firefighters watched from their truck has insurance to payoff their mortgage but not enough to cover everything lost or to rebuild, according to the family and their insurance agent."

    3. "Notice: if no-one in the county paid the fire charge up front, and the city charged everyone who had a fire for putting it out (with a lien on the house if necessary) the city fisc would be exactly as well off as it is now."

    There was a study done in March 2008 to address this problem in Obion County. Five towns charge $500 for each rural fire response, and manage to collect about half the time. Apparently, their legal recourse is limited.

    Three towns, including South Fulton, have switched to a $75 subscription fee (a voluntary tax one might say). Evidently, even that is tricky to enforce.

    Finally, a bit of backstory about slow learning curves and the value of "never again" promises:

    "The Cranicks said they also forgot to pay their fire service fee on time about three years ago. But the fire department then did not hesitate to put out a chimney fire and let them pay the fee the next day."

    I guess the Cranicks have become fans of ex-post insurance.

    This incident is a fascinating Rorschach test. I utterly dispute this analogy:

    "If you do something stupid and get stuck on a mountain, we don’t let you die there; we rescue you if possible and then send you a bill for the search."

    Right. And if you go to the Park Ranger at the end of the day and tell him you left your backpack and camera somewhere on the mountain, good luck getting helicopters and a search party. The house was *property*; it is not alive. No humans were in danger (and I am curious about the cats and dogs).

    For a different not-quite on point analogy, try this – Bob Cranick needs his pick-up truck to get to work each day. But Bob wants to save a few bucks by not changing the oil. One day, the engine seizes right in his driveway. Obviously, the town has a moral obligation to send him a car to get him to work, since his valuable property has unexpectedly stopped working. Right?

    I think most folks would agree that that is dumb. Well, Bob has an isolated house in the country and didn't want to insure it. No people and no other homes were threatened. If the town had never responded at all, would anyone care? It was only because the fire department showed up and helped a subscriber but not Cranick that this seems outrageous. (And it does seem outrageous. I get the 'tough love' moral hazard problem, and they want to be fair to all the chumps that actually did pay the $75 fee, and I get that ex post collection of the $500 charge is uncertain, but still…)

  18. If I'm the city of South Fulton, or any other in Obion County, I'm getting out of the business of providing fire coverage to anyone outside of the tax jurisdiction. From the city's point of view, I don't see any upside. It exposes them to extra liability, it puts their employees in the position of being the bad guys* and generating bad PR, and I can't imagine that $75 per household comes close to covering the costs. Almost 60% of the fires that the South Fulton department is called to are outside the city. Why in the world do they want this headache?

    *Had the city never taken on the job of providing the service, they wouldn't be taking flak right now. No one would have been outraged that their firefighters stood by while a house burned, despite the fact that that's exactly what they would have been doing, though not on the scene. The anger would all be focused where it belongs: on the citizens of the unincorporated parts of Obion County, for voting down the chance to actually pay for a fire department. Although, I suspect that if the city didn't provide the service, the good citizens of the county may have voted differently.

  19. Shorter Brett & the rest of the Murray Rothbard Memorial Boys' Choir:

    Shanna, they bought their tickets, they knew what they were getting into. I say, let 'em crash.

  20. with respect to the pets, i will merely observed that dogs do not have opposible thumbs. This results in them generally having great difficulty with door knobs. So, even if they had plenty of time to escape, that won't necessarily done them much good, if the doors weren't left open.

    There really are only two ways about it: Either you let people make choices, and then they suffer the consequences of those choices, OR you deny them the consequences, and soon enough, deny them the choices. Letting people make their choices, and collectivizing the costs isn't a stable solution. I still haven't seen an objective test for what choices and consequences you'll take away from people, and which choices and consequences you'll let them keep. I suspect the test is, "What can I get away with today?"

    Today, mandatory diet and exercise is a reductio ad adsurdum. Tomorrow it will be a serious policy proposal. Next week you'll rain catcalls on anybody who suggests that people be allowed to over eat and get fat. That's the way it goes. Some of us want to grease the slope, some of us want to drive in pitons.

  21. Brett et al: If there had been an infant, mentally or physically disabled person in the house, would your answer be different, and why?

  22. Even before you get to liability issues, the news reports suggest that the fire department acted in a fiscally irresponsible manner. If they had responded when first called (before the fire reached the house, the cost of putting out a small brushfire would have been minimal. Instead, they ended up having to responds to a much larger fire that threatened a neighboring structure, with more danger to firefighters and equipment.

    If there's a history of waiving the fee, the refusal to do so this time, coupled with the immediately-subsequent decision to offer fee-for-service to a wider area, probably raises questions a lawyer or prosecutor could exploit.

    The huge overall loss here also suggests a pretty clear market failure — in the short run, it's always going to be economically rational for homeowners to skip paying the fee, and paying it engages them in moral hazard. And of course market failures like this are exactly where you want governments involved.

  23. Re: "i will merely observed that dogs do not have opposible thumbs. This results in them generally having great difficulty with door knobs. "

    Hm. If the homeowner yelled, "It's every man, woman, child, cat and dog for itself – I'm outta here" I guess that would be relevant.

    My impression is that they made several phone calls to the town, and the situation developed somewhat slowly, as the field fire spread and their garden hose effort failed.

    There is not a lot of evidence to suggest that the fire interrupted a MENSA meeting, but I would think the humans could have used their opposable thumbs and modestly functional brains to take a bit of responsibility for the pets.

    "in the short run, it’s always going to be economically rational for homeowners to skip paying the fee, and paying it engages them in moral hazard."

    I don't follow at all. If the town establishes a clear "tough love" policy of ignoring non-subscribers and the fee is reasonable, how is it "always" rational to skip the fee?

    This is not like emergencyroom service at the hospital, where they have a legal "must treat"obligation.

  24. Tom:

    In the short run, most people don't have fires. Some people will never have fires. (If a $500-per-call recovery is fiscally equivalent to a $75 yearly charge, then you're talking roughly seven years between fires on average.) So if you're looking at just the current year, skipping the fee looks like a good idea unless you're willing to pay a risk premium. In the medium and long run, paying makes sense, but in the medium or long run you'll have sold the house and moved elsewhere. So in the short run, unless you know a reason why you might be at risk, the money could almost certainly be better invested or spent elsewhere.

  25. "Brett et al: If there had been an infant, mentally or physically disabled person in the house, would your answer be different, and why?"

    Yes, I'd be much more torqued with the homeowners for failing to pay their fire protection fee. And not too impressed with the fire fighters, either. It's evident that they were deliberately gaming the system; They'd had a fire only a few years earlier, after not paying the fee, and had it extinguished with no penalty. So, here they were again, after not paying the fee, expecting the same treatment. Boo hoo.

    Look, suppose that, instead of having mobile fire extinguishing teams, we dealt with fires by equipping houses with fire extinguishing systems. Would you blame the people installing them if they'd refused to do so unpaid, and a house burned down as a result?

    There is indeed a problem here, and apparently it's that the legal system isn't enforcing the penalties non-subscribers are supposed to pay for emergency service. Why aren't you directing your ire towards the legal system, instead of expecting people to put out fires for free? If the legal system were enforcing those penalties, the fire department would have been indifferent to whether they got paid a subscription fee, or a penalty after the fact. The legal system was the reason they needed to make an example of somebody, wasn't it?

  26. Brett, I do not believe that you have proven your assertion that a society that chooses to mitigate the consequences of unfortunate individual choices will necessarily proceed to severely restrict such choices. The only obvious implication of a generous social welfare state is that it requires more money, therefore more taxation in some form or another. That's not a restriction on any particular behavior, however, money being fungible.

    Restrictions on specific behaviors are optional, but a society composed of freedom-loving individuals like you and me would minimize such restrictions – even while trying to heal all hurts. Win win! So what's the problem?

  27. The post neglected to include the part where the field next to the house caught on fire, endangering the house of a nearby neighbor who had payed the fee. So the firefighters had to prevent that house from burning, which they were directly responsible for endangering through their failure to put out the house fire in progress. Seems we have totally lost the sense of "to promote the general welfare".

  28. This was an excellent post. We don't agree on much, but I think your bottom line is absolutely correct and I appreciate your attempt to sideline arguments that this incident has some broader ideological implications.

    JHA

  29. It seems to me that if the FD had a history of responding to fires of non-subscribers and billing later, that's a precedent (not necessarily in a legal sense, strictly in the sense of what people have reason to expect.) Given that precedent, it also seems to me that the FD had an obligation (again, not necessarily a legal one but a moral and even common-sense one) of widely and loudly publicizing an intention to discontinue that practice a reasonable amount of time ahead of doing so. People expect to get (or not get) what they've always gotten. Stopping a long-standing practice (even if that practice was contrary to the actual written regulations) at the expense of a single person or family (who, in this case, had even more reason than other citizens to count on the practice, having done so before) just seems wrong to me, regardless of anybody's political views or rhetoric. This family will be scarred forever in some ways by this fire – everyone who loses everything always is. It seems to me, from a purely humane viewpoint rather than an academic one, that the "lesson" at the expense of these people was far too costly. And comparing a book and backpack left on a mountain to a family's loss of their entire lifetime of property and belongings (including all those irreplaceable items and treasures) and having the entire family fall in a financial hole they may never emerge from just doesn't work for me.

  30. "Brett, I do not believe that you have proven your assertion that a society that chooses to mitigate the consequences of unfortunate individual choices will necessarily proceed to severely restrict such choices."

    Oh, you mean that you'd never argue that we can force people to have health insurance, because of the cost to society of treating people who show up in emergency rooms without insurance? Glad to hear that.

  31. Brett, your certainly won't hear me argue that. I much prefer tax-financed health insurance. Likewise, I wouldn't force people to carry national security insurance, but finance the DOD out of general revenues.

    That's the thing about risks that everyone more-or-less inevitably needs protection from, like illness, fire or foreign enemies. It's simply more efficient (also, more just) to collectively self-insure against them.

  32. I thought I was a liberal but it turns out I am a closet Randian. Mr Cranick is a fool. Now, I much prefer a system with MANDATORY taxes to pay for fire protection, but I can't imagine why a subscription-based service is obliged to assist a non-subscriber.

  33. From Anthony St. John UCB '63 (for some reason this comment keeps getting deleted)

    Professor O'Hare, it is much more troubling that there are far too many outrageous social, political and economic failures like "the firefighters of South Fulton watched the Cranicks’house burn to the ground" happening throughout our civilization today.

    Before we condemn others we must first look within our own community to make sure we do not commit similar outrages, such as UC's dedication to perpetuating hydrogen bombs for profit for over half a century instead of producing controlled fusion energy production to save the future for humanity from further out of control destruction of our quality of life."

    Hopefully we can make the right things happen with a sense of urgency at last to prevent global warming from further destruction of our civilization.

    The reality is that far too many of us are "watching" increasingly limited worldwide resources "burn to the ground" that are making our legacy to future generations totally unacceptable.

    UC and Secretary of Energy/UC Professor Chu must immediately dedicate all national lab resources to the achievement of Teller's promise of controlled fusion soon, just like many Cal professors helped win WWII as participants in the Manhattan Project with the greatest sense of urgency in the 20th century.

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