Another Side Effect Of Globalization
Low-cost drywall from China sounds like a good deal for American home buyers, cutting costs on a commodity product. Not so fast…
[via Thousands of U.S. Homeowners Blame Chinese Drywall for Ills by Leslie Wayne]When Bill Morgan, a retired policeman, moved into his newly built dream home in Williamsburg, Va., three years ago, his hopes were quickly dashed.
Bill Morgan had to abandon his newly built dream home in Williamsburg, Va., blaming drywall for corrosive fumes that attacked metal objects.
His wife and daughter suffered constant nosebleeds and headaches. A persistent foul odor filled the house. Every piece of metal indoors corroded or turned black.
In short order, Mr. Morgan moved out. The headaches and nosebleeds stopped, but the ensuing financial problems pushed him into personal bankruptcy.
“My house is not worth the land it’s built on,” said Mr. Morgan, who could not maintain the mortgage payments on his $383,000 home in a Williamsburg subdivision called Wellington Estates and the costs of a rental property where his family decamped.
Mr. Morgan, like many other American homebuyers who tell similar tales of woe, is blaming the drywall in his new home — specifically, drywall from China, imported during the housing boom to meet heavy demand — that he says is contaminated with various sulfur compounds.
Hundreds of lawsuits are piling up in state and federal courts, and a consolidated class action is moving forward in Louisiana before Judge Eldon E. Fallon of Federal District Court, who will begin hearing cases in January.
[It’s not just food stuffs and medicines that can poison us. And with a global production system I am sure the manufacturers will be unable to trace back to the source.]
[…]
Investigators are finding that getting scientific data, establishing legal accountability and following a supply chain is difficult when so many drywall sheets — millions in all were brought into the United States — were simply marked “Made in China,” providing no clues to their actual source. The drywall was brought in because United States supplies ran low, not as a cost-saving measure for builders.
[Of course, makes it easier to cover their tracks. Everyone is up in arms now, talking about regulating it, but where were the regulations five years ago?]
Homeowners, insurers, home builders, drywall suppliers and Chinese manufacturers, if they can be identified, are often suing each other. Drywall installers and suppliers are also expected to be targets of the next wave of litigation. Many lawsuits need to be translated into Mandarin and follow rules of international law, adding layers of difficulty.
[A cluster fuck.]
Will The Chinese Help?
I think we should leave Afghanistan as soon as practical, because we aren’t actually serving our most important interests there. Robert Kaplan points out that we are supporting Chinese interests there, however:
[via Beijing’s Afghan Gamble by Robert Kaplan]
“In Afghanistan, American and Chinese interests converge. By exploiting Afghanistan’s metal and mineral reserves, China can provide thousands of Afghans with jobs, thus generating tax revenues to help stabilize a tottering Kabul government. Just as America has a vision of a modestly stable Afghanistan that will no longer be a haven for extremists, China has a vision of Afghanistan as a secure conduit for roads and energy pipelines that will bring natural resources from the Indian Ocean and elsewhere. So if America defeats Al Qaeda and the irreconcilable elements of the Taliban, China’s geopolitical position will be enhanced.
This is not a paradox, since China need not be our future adversary. Indeed, combining forces with China in Afghanistan might even improve the relationship between Washington and Beijing. The problem is that while America is sacrificing its blood and treasure, the Chinese will reap the benefits. The whole direction of America’s military and diplomatic effort is toward an exit strategy, whereas the Chinese hope to stay and profit.
But what if America decides to leave, or to drastically reduce its footprint to a counterterrorism strategy focused mainly on the Afghanistan-Pakistan border? Then another scenario might play out. Kandahar and other areas will most likely fall to the Taliban, creating a truly lawless realm that wrecks China’s plans for an energy and commodities passageway through South Asia.
[…]
Everyone keeps saying that America is not an empire, but our military finds itself in the sort of situation that was mighty familiar to empires like that of ancient Rome and 19th-century Britain: struggling in a far-off corner of the world to exact revenge, to put down the fires of rebellion, and to restore civilized order. Meanwhile, other rising and resurgent powers wait patiently in the wings, free-riding on the public good we offer. This is exactly how an empire declines, by allowing others to take advantage of its own exertions.
Of course, one could make an excellent case that an ignominious withdrawal from Afghanistan is precisely what would lead to our decline, by demoralizing our military, signaling to our friends worldwide that we cannot be counted on and demonstrating that our enemies have greater resolve than we do. That is why we have no choice in Afghanistan but to add troops and continue to fight.
But as much as we hone our counterinsurgency skills and develop assets for the “long war,” history would suggest that over time we can more easily preserve our standing in the world by using naval and air power from a distance when intervening abroad. Afghanistan should be the very last place where we are a land-based meddler, caught up in internal Islamic conflict, helping the strategic ambitions of the Chinese and others.”
So why doesn’t China send in troops? Are we unwilling to fight side by side with them? The lines of supply favor their involvement. Or at least get them to pay for it.
We could could leave this mess in their hands. It’s their backyard, after all.
Obama Imposes Tariff On Chinese Tires
Despite the continuing free market support from Obama — at least in international settings — at home he is listening to protectionist groups, like the Teamsters Union, and starting to raise import barriers to China:
[via U.S. Adds Punitive Tariffs on Chinese Tires by Edmund L Andrews]
“In a break with the trade policies of his predecessor, President Obama announced on Friday night that he would impose a 35 percent tariff on automobile and light-truck tires imported from China.
The decision is a major victory for the United Steelworkers, the union that represents American tire workers. And Mr. Obama cannot afford to jeopardize his relationship with major unions as he pushes Congress to overhaul the nation’s health care system.
But China is certain to be antagonized by the decision, made less than two weeks before Mr. Obama will come face to face with Chinese leaders at a summit meeting in Pittsburgh for the Group of 20 industrialized and fast-growing emerging nations.
The decision signals the first time that the United States has invoked a special safeguard provision that was part of its agreement to support China’s entry into the World Trade Organization in 2001.
Under that safeguard provision, American companies or workers harmed by imports from China can ask the government for protection simply by demonstrating that American producers have suffered a “market disruption” or a “surge” in imports from China.
Unlike more traditional anti-dumping cases, the government does not need to determine that a country is competing unfairly or selling its products at less than their true cost.
The International Trade Commission had already determined that Chinese tire imports were disrupting the $1.7 billion market and recommended that the president impose the new tariffs. Members of the commission, an independent government agency, voted 4-2 on June 29 to recommend that President Obama impose tariffs on Chinese tires for three years. Mr. Obama had until this coming Thursday to make a decision.
American imports of Chinese tires tripled between 2004 and 2008, and China’s share of the American market grew to 16.7 percent, from 4.7 percent, according to the United States Trade Representative. Four American tire factories closed in 2006 and 2007, and several more are set to close this year.”
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Sounds like a market disruption, to me.
Obama is treating this as a special case, because of the provisions of China’s entry into the World Trade Organization. But, if it is good policy to invoke tariffs on China because of dramatic erosion of US manufacturing in this case, shouldn’t it be good in general, whether there are special provisions of a particular agreement? If so, then Obama’s trade and manufacturing people should be out looking for other, similar disruptions, and imposing tariffs there too.
Or am I missing something?
Certainly the Chinese government will be pissed, and they hold trillions of Treasury notes, effectively propping up US debt. They have a strong playing card. If we stopping buying their goods (for which we are going into debt), they might start to stop buying up our bonds (their investment in a spendthrift US).
It’s a very strange dualism. The way out of our problems, here in the US, involves a quantum shift in consumerism, which we are beginning to see. It appears that Americans have drastically amended their profligate ways, and that’s going to make a big impact on Chinese imports of clothes, electronics, and other goods.
At the same time, China is moving to become the manufacturing source for the rest of the world too, although they aren’t buying much these days either.
India and China held talks last month on their disputed border.
[via The New York Times]
“The roots of the conflict go back to China’s territorial claims to Tibet, an enduring source of friction between China and many foreign nations. China insists that this section of northeast India has historically been part of Tibet, and should be part of China.
Tawang is a thickly forested area of white stupas and steep, terraced hillsides that is home to the Monpa people, who practice Tibetan Buddhism, speak a language similar to Tibetan and once paid tribute to rulers in Lhasa. The Sixth Dalai Lama was born here in the 17th century. The Chinese Army occupied Tawang briefly in 1962, during a war with India fought over this and other territories along the 2,521-mile border.
More than 3,100 Indian soldiers and 700 Chinese soldiers were killed and thousands wounded in the border war.”
Han and Uighurs Battle For Historicity
[via Rumbles on the Rim of China’s Empire by Edward Wong]
“A history exhibition in the main museum in this regional capital goes one step further. “Xinjiang has been an inalienable part of the territory of China,” it asserts, implying that Beijing or Xian or some other imperial capital has for time immemorial held sway over this land at the crossroads of Asian civilizations.
But many Uighurs, a Turkic race of Muslims that is the largest ethnic group among the 20 million people of Xinjiang, have their own competing historical narrative. In it, the region is cast as the Uighurs’ homeland, and the ethnic Han, who only began arriving in large numbers after the Communist takeover in 1949, are portrayed as colonizers.
Mechanisms typical of colonial control — the migration of Han, who are China’s dominant race, and government policies that support the spread of Han language, culture and economic power — provided tinder, some scholars say, for the conflagration of the past week in Xinjiang.”
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These arguments are consistent the world over when contending ethnic groups attempt to use history to support the legitimacy of their claims for controlling some geography. The Serbs consider Kosovo their homeland, the Israelis believe that Israel is ordained to be a Jewish state, and the Georgians and Abhaz argue about whose ancient kings were more ancient.
Whether the Uighurs have 1000 years or 1400 years of history in Xinjiang or not, the Han are definitely marching toward total integration of the area into China.
China Moves To Wind Power
[via Green Power Takes Root in the Chinese Desert - NYTimes.com]
“This year China is on track to pass the United States as the world’s largest market for wind turbines — after doubling wind power capacity in each of the last four years. State-owned power companies are competing to see which can build solar plants fastest, though these projects are much smaller than the wind projects. And other green energy projects, like burning farm waste to generate electricity, are sprouting up.
This oasis town deep in the Gobi Desert along the famed Silk Road and the surrounding wilderness of beige sand dunes and vast gravel wastelands has become a center of China’s drive to lead the world in wind and solar energy.
A series of projects is under construction on the nearly lifeless plateau to the southeast of Dunhuang, including one of six immense wind power projects now being built around China, each with the capacity of more than 16 large coal-fired power plants.
Each of the six projects “totally dwarfs anything else, anywhere else in the world,” said Steve Sawyer, the secretary general of the Global Wind Energy Council, an industry group in Brussels.”
Changzhi dump
Migrant workers in China
[via NYTimes]
Mumbai Is About Kashmir
I am not giving even the weakest support for the recent terrorist activities in Mumbai, but I want to draw attention to the history of Kashmir, and make a point: Kashmir is a regional conflict, one that has been in a stalemate for decades, and is a flashpoint for larger conflict, involving India, Pakinstan, and China.
[from Kashmir - Wikipedia, the free encyclopedia]Kashmir (Balti: کشمیر; Poonchi/Chibhali: کشمیر; Dogri: कश्मीर; Kashmiri: کٔشِیر; Shina: کشمیر; Uyghur: كھسىمڭر) is the northwestern region of the Indian subcontinent. Until the mid-19th century, the term “Kashmir” referred only to the valley lying between the Great Himalayas and the Pir Panjal range; since then, it has been used for a larger area that today includes the Indian-administered state of Jammu and Kashmir consisting of the Kashmir valley, Jammu and Ladakh; the Pakistani-administered provinces of the Northern Areas and Azad Kashmir, and the Chinese-administered region of Aksai Chin.
In the first half of the first millennium, Kashmir became an important center of Hinduism and later of Buddhism; later still, in the ninth century, Kashmir Shaivism arose in the region.[1] In 1349, Shah Mirza became the first Muslim ruler of Kashmir and inaugurated the line Salatin-i-Kashmir.[2] For the next five centuries Kashmir had Muslim monarchs, including the Mughals, who ruled until 1751, and thereafter, the Afghan Durranis, who ruled until 1820.[2] That year, the Sikhs under Ranjit Singh, annexed Kashmir.[2] In 1846, upon the purchase of the region from the British under the Treaty of Amritsar, the Dogras—under Gulab Singh—became the new rulers. Dogra Rule, under the paramountcy (or tutelage) of the British Crown, lasted until 1947, when the former princely state became a disputed territory, now administered by three countries: India, Pakistan, and the People’s Republic of China.
In the power vacuum left by the departing British Raj, the Indians, Pakistanis, and Chinese all moved to claim territory. The history of the region is fractious, with a seesawing of control between Afghan, Sikh, and Mughal ruling dynasties.
The fall of Hari Singh and the Princely State of Kashmir in 1947 was precipitated because these rulers had the right to opt for integration with either India or Pakistan. Kashmir was 77% Muslim, so it was assumed that Singh would join the state to Pakistan. Jumping the gun, and presumably hoping to gain from it, Pakistani ‘tribals’ invaded prior to the signing of the formal agreement. Singh lost control of much of Kashmir, and appealed to the British for assistance. Montbatten, the Governor-General of India agreed on the condition that Kashmir be joined to India, which led to Indian soldiers moved in an pushed the tribals out of all but a small portion of Kashmir. The document that bound Kashmir to India, the Instrument Of Accession, requires that the wishes of the Kasmiri people should be taken into account. The UN insisted that no plebiscite was possible until all ‘irregulars’ — the tribals — had left the region: basically calling for a withdrawal of Pakistani’s informal army there.
In the early 1950s, while the standoff between India and Pakistan bubbled, China moved into Aksai Cin, the easternmost portion of Kashmir, initially for better roads into Tibet. The Chinese have never accepted the borders created by Russia, Britian, and Afghanistan in the 1800s. Pakistan also cedded an additional portion of Kashmir to China, the Trans-Karakorum Tract in 1965.

Kashmir, originally uploaded by Stowe Boyd.
As you can see from the map, the ‘Northern Areas’ of Kashmir are the region closest to Afghanistan and the unruly provinces of Pakistan: the North-West Frontier Provinces, and just to the west of that, the Federally Administered Tribal Areas. This area is a very strange place, as I have related before (see Tribal Armies in FATA, and Pakistan And The Future Of The Federation, A Call For Decentralized Governance in Afghanistan and Pakistan: Falling Back To The Timeless). The Federally Admistered Tribal Regions were governed, until quite recently, by different laws than the rest of Pakistan, a holdover from the British rule. The only analogy that makes sense to Americans is something like the way Native Americans are governed in the US, with tribal law in force on reservations, and the odd relationship to the US Department of The Interior’s Bureau of Indian Affairs to tribal Native Americans is similar ot the way the Pakistani government interacts with tribal leaders.
So, the point that I am making — after the history lecture — is that the recent terror in Mumbai is linked to this unsettled border between India, Pakistan, and (to a lesser extent) China and Afghanistan. I am not suggesting that the Pakistani or Indian position is correct, in any philosophical sense, and I have no idea really what the Kashmiri people want, if there really is a coherent Kashmiri people any more, after 50+ years of being divided.
What I am suggesting is that this mess is part of a greater mess, and that does not make it simpler, but maybe puts it in context. The entire region, but most significantly Afghanistan, Pakistan, and Kashmir, are not truly ‘nations’ in any sense that we would understand in the West. There are national boundaries on the maps, but they generally have little meaning within the three regions. China and India are truly nations, as we would use the term, but Afghanistan and Kashmir are two areas riven by factionalism, and where a state of war has been going on for decades. Pakistan is a psuedo-state that has been propped by by the US and others, but is actually a confederacy of interests on the verge of dissolution, and where large regions on the border with Afghanistan and Kashmir are largely ungoverned by the state, and which harbor groups like Al Queda and Lashkar-e-Taiba.
This region is a seething mess, with dozens of language and ethnic groups, theoretically united by Islam, but in practice divided by language and tribe.
I am not suggesting that the US or the UN swoop in and begin ‘region building’: we can’t even get nation building right. But I am arguing the contrapositive: if the region is not stable, then no ‘state’ or locale within the region will be stable. There is no ‘solution’ for Afghanistan without a ‘solution’ for the Federally Administered Tribal Regions. There is no ‘solution’ for Kashmir without a solution for a stable Pakistan.
Many commentators have praised the forbearance of India in this calamity, and so do I, However, India and Pakistan have allowed Kashmir to fester for 50 years, and have entered into three wars since 1947. India’s desires and claims for Kashmir play a part in this tragedy to some extent, although that does not justify Lashkar-e-Taiba’s indiscriminate killings in Mumbai. But there must be a real plan to solve this impasse, just as there must be real progress in Israel regarding Palestinian claims to sovereignty and self-government.
The real answer might lie in a real plebiscite, which would require India and Pakistan to pull out their troops, and the occupation by UN peace keeping forces, as was done in the Balkans. After some period of time, the actual inhabitants of Kashmir could make their wishes known, and the belligerents would be compelled by world opinion to go along with it. Remember Kosovo.
In the meanwhile, clashes in Kashmir between Muslin inhabitants favoring secession from India continue, and hundreds have been jailed in recent months.
Agribusiness Coming To China: Pushing The Peasants Off The Land
A recently hinted-at “economic reform” intended to put money into the hands of Chinese farmers is a landgrab for agribusiness:
[via China Announces Land Policy Aimed at Promoting Income Growth in Countryside by Edward Wong]Scholars and government advisers said in interviews during the four-day session that the new policy would allow China’s more than 800 million peasants to engage in the unrestricted trade or sale of land-use contracts, good for decades, that are given to them by the government. Adopting such a system would be a significant move toward privatization.
Since early October, state news media have run stories extolling the virtues of a system in which farmers would be able to trade, purchase or sell their land rights.
Old greenhouses, Qingcheng via FlickrOh great. So the peasants will sell their land and/or land rights, and a fraction of them will remain as workers — probably migrant workers — and the rest will move to the cities, with their tiny bag of money, and look for work.
This is going to be the largest displacement of people from the land, ever.
And five years later many of the displaced will wish they could go back to a time when they lived in a village, with friends and family, and where growing and eating food was largely outside the cash economy.
China has an opportunity to experiment with in situ modern land use; alas, I fear they will step smack into the 19th century, when the British enclosed the commons to increase productivity of farming, making serious bank for the landed and wealthy, leading to the diaspora of English farmers and an explosion of urban crime, pollution, and disease.
China is already the world’s leading exporter of fruits and vegetables, so the pressure to capitalize on industrial agribusiness there is huge. So we can expect the largest rise in agricultural pollution, desertification from pumping out all the groundwater to accelerate growth of crops, and the rapid urbanization of China as the people leave the land and head to the cities.
Related articles by ZemantaGlobosclerosis and The Limits Of Open Markets
David Brooks characterizes the fall of the West as globosclerosis:
[from Op-Ed Columnist - Missing Dean Acheson - Op-Ed - NYTimes.com]Today [as opposed to the post-WWII, cold war world, when Westphalian nation states were at their peak] power is dispersed. There is no permanent bipartisan governing class in Washington. Globally, power has gone multipolar, with the rise of China, India, Brazil and the rest.
This dispersion should, in theory, be a good thing, but in practice, multipolarity means that more groups have effective veto power over collective action. In practice, this new pluralistic world has given rise to globosclerosis, an inability to solve problem after problem.
As if we solved problem after problem in the 60s, 70s, and 80s.
Brooks is hand wringing about the ‘failure’ of the Doha round of World Trade talks, where the globalizing West seeks to ‘liberalize’ trade by getting India, China and others to drop local subsidy of local agriculture.
The notion of this being ‘liberal’ is a slight of hand, a trick: it really means opening more markets to the economics of global corporations, which leads to rapid consolidation based on economies of scale and high energy inputs, with the result that more people are forced from small scale farms and flee to increasingly feral cities to become part of the ‘Bottom Billion’ living in shanty towns.
Brooks — despite being a columnist for the liberal New York Times — is conflating the supposed ‘openness’ and ‘liberalism’ of free trade with a long list of other ills: Dafur, Zimbabwe, and Iran. The supposed thread linking these various messes is the failure of the world’s power structures to align in an obvious way to fix the problems involved. And Brooks is right, in part, that in a multipolar world, it is increasingly unlikely that decisive action can be taken to quickly attack and resolve major issues. Indeed, it is hard to imagine that the various world powers can even agree on a shared perspective for these issues.
It is time to rethink free trade, and not to lump it in with a long shopping list of other issues that require our support. It is distinct and different from countering genocide in Darfur, or opposing Iran’s nuclear ambitions.
We need to oppose free trade that accelerates the depletion of the world’s aquifers and desertification, that dislocates rural populations and sends them as economic refugees to live in the slums of already overgrown megacities, and relies on Twentieth Century energy economics (including high costs of labor, cheap oil, low cost international transport, and treating the atmosphere as a sewer). Disguised in the hypothetical liberalizing impact of a globally linked and open economic agricultural system is the capacity to destroy local systems of food production and other localized economies, on a worldwide scale.
I no longer believe in the wisdom of open markets to lead inevitably to just outcomes. Partly this is because of the ‘tragedy of the commons’, where the true costs of production are not accurately reflected in the costs passed along to the consumer by exploiting unrenewable resources, like water in deep aquifers or dumping CO2 in the air. And partly this is because taxation and other governmental policies can be rigged to support the growth of these companies at the expense of individuals in other countries, or at the expense of people everywhere.
Personally, I am happy with the premise that coalitions of nation states are losing the ability to take drastic actions, to force global policies on others.
[Just in passing: Free trade was the rallying cry for the Opium Wars in China in the 1800s, when China refused to open itself to the rapacious trading practices of the West despite the growing addiction of the West for tea, the making of which was a secret at the time. England began trading opium to China to acquire the silver that was the only option for the purchase of tea, since the Chinese deemed all objects of Western manufacture — weapons aside — of low quality. This culminated in the Boxer Rebellion, and the overthrow of the Qing dynasty by Western powers, which was another coalition of Western states advocating free trade. I think that China has not forgotten that episode, which was as traumatic for the Chinese as the Civil War was for the US.]
I have lost faith in the judgment of Western growth-based globalism. Brooks on the other hand favors the League of Democracies coalition that McCain and others advocate:
The best idea floating around now is a League of Democracies, as John McCain and several Democrats have proposed. Nations with similar forms of government do seem to share cohering values. If democracies could concentrate authority in such a league, at least part of the world would have a mechanism for wielding authority. It may not be a return to Acheson, Marshall and the rest, but at least it slows the relentless slide towards drift and dissipation.
On the contrary, the best anodyne to the messes that globalism has engendered is localism. Smaller polities — like the Bay Area, Catalonia, or the Hawaian Islands — working to become self-sufficient and less reliant on the actions of increasingly less powerful nations. And like the case of Catalonia, the smaller regions should hold back more of their tax money to be applied locally. This does not mean that smaller regions can’t take direct action on issues of global importance — like decreasing the production of greenhouse gases, or working toward regional solutions of water policy, for example. There is no reason whatsoever to conjecture that the US or other national governments are likely to come up with better or quicker responses to these challenges than localists can.
Victor Davis Hanson makes the ‘liberal’ open markets argument in today’s NY Times, which I think is 180 degrees off. Food prices are rising as more people in the developing world want a richer diet, and energy prices are skyrocketing, also contributing to a rise in food prices. The answer: more globalism, Hanson says:
It is understandable that poorer nations are near paranoid in their fear for their own farmers’ livelihoods should they import a glut of imported American and European food that is a product of sophisticated economies of scale. But with food shortages looming, all countries should now support open trade in food to encourage as much supply as possible for a hungry planet.The best thing that the United States, the beacon of world capitalism, could now do is to stop interfering with its own farmers, let markets and need determine what they grow and how they farm — and then by such a principled American example persuade the rest of the world to do the same.
Yeah, sure: like the skyrocketing worldwide price of rice because of a six year drought in Australia. Note that southeast Asia decreased local production of rice because of the low cost of importing it from Australia, and now are scrambling to redevelop local production, and the Australians are retooling to growing crops that are more drought tolerant. The high hidden costs of all that centralization of production in one geography is only paid when catastrophe strikes; and it always does, sooner or later.
I support the idea that US Government subsidies to agribusiness are likely to be counter to the best interests of most US and world citizens. However, it is questionable to let unbridled market forces alone — in the absence of agreed on policies in the face of global warming, decreasing arable land, and desertification — to handle the world’s need for food. Until the markets are based on the true costs of food production — including the actual costs on nonrenewable resources — we can’t trust them to come up with good outcomes.

![photo by Du Bin
Four dredging boats left on the dry riverbed of the Lu Hun reservoir.
[via Drought Shrivels China’s Wheat Belt - NYTimes.com]](http://1.media.tumblr.com/lL89dalAWkdp84guWqntv88co1_500.jpg)