WEBVTT NOTE Applying Economics to American History 1 00:00:00.000 --> 00:00:05.280 It's very nice to be back in Houston today and to see such a splendid crowd here. 2 00:00:05.280 --> 00:00:10.240 I'm a little bit intimidated by it, even though I used to be a professor. 3 00:00:10.240 --> 00:00:16.720 I haven't been one for a long time, so I'm pretty comfortable talking to 10 or 15 people, 4 00:00:16.720 --> 00:00:21.040 but when I have hundreds like this, I start to shake. 5 00:00:21.040 --> 00:00:24.760 So if you see me quivering up here, you'll know why. 6 00:00:24.760 --> 00:00:29.960 But I wanted to talk to you today about something that I find terrifically exciting 7 00:00:29.960 --> 00:00:37.960 If I just said what's an exciting topic, probably the first thing you said would not be economic history. 8 00:00:37.960 --> 00:00:46.960 But it really is. And I've spent my entire adult life being excited by this subject. 9 00:00:46.960 --> 00:00:49.960 I'm still excited by it today. It never wore off. 10 00:00:49.960 --> 00:00:58.960 And one of the things that a lot of historians don't understand, even historians that are good in many respects, 11 00:00:58.960 --> 00:01:11.960 is the fact that in order to understand a great deal of history, perhaps not everything in history, but a great deal of the important events in history, you must understand at least basic economics. 12 00:01:11.960 --> 00:01:19.960 You have to. If you don't, you're going to make a mess of your interpretation of why things happened as they did. 13 00:01:19.960 --> 00:01:49.960 And so what I want to do in the short while I have to speak to you this morning is first of all give you a lightning-fast course in basic economic ideas and then I want to use these ideas to help you understand better a couple of important episodes in U.S. history and to show you that if you didn't understand these concepts you wouldn't understand 14 00:01:49.960 --> 00:02:05.360 A great many people, news people, professors, school teachers, members of Congress, either 15 00:02:05.360 --> 00:02:11.560 do not understand these ideas or disregard them consistently. 16 00:02:11.560 --> 00:02:17.320 We live in a world in which people are constantly misunderstanding what is happening, why it's 17 00:02:17.320 --> 00:02:18.320 happening. 18 00:02:18.320 --> 00:02:23.640 That's not a world you want to live in. You want to understand what's going on around you. 19 00:02:23.640 --> 00:02:32.760 So, it is essential that you master basic economics. This doesn't mean you have to get a PhD. 20 00:02:32.760 --> 00:02:36.040 In fact, that would spoil you. 21 00:02:36.040 --> 00:02:40.680 Because what you'd be taught in almost every PhD program in the United States 22 00:02:40.680 --> 00:02:47.680 would confuse you about basic economics and probably wipe it out of your mind and replace it with a lot of 23 00:02:47.680 --> 00:02:53.120 Mathematical gibberish, but basic economics is essential. 24 00:02:53.120 --> 00:02:54.800 What is basic economics? 25 00:02:54.800 --> 00:03:03.080 It's a branch of the human sciences, and by human sciences I'm referring to the sciences 26 00:03:03.080 --> 00:03:05.240 of why people act as they do. 27 00:03:05.240 --> 00:03:12.040 I'm not referring to human biology or human physiology or evolutionary biology or things 28 00:03:12.040 --> 00:03:17.160 like that that may have to do with humans, but aren't about why humans make the choices 29 00:03:17.160 --> 00:03:25.480 The greatest treatise in economics is actually a book called Human Action, and sometimes 30 00:03:25.480 --> 00:03:31.440 when people stumble upon that book, which was written by Ludwig von Mises, they're quite 31 00:03:31.440 --> 00:03:32.940 unclear about what it is. 32 00:03:32.940 --> 00:03:33.940 What is this book about? 33 00:03:33.940 --> 00:03:34.940 Human Action. 34 00:03:34.940 --> 00:03:36.700 That seems vague to them. 35 00:03:36.700 --> 00:03:43.480 But Mises developed a body of thinking that had originated earlier, particularly with 36 00:03:43.480 --> 00:03:45.480 The Theory of Money and Credit 37 00:04:43.480 --> 00:04:50.480 They are undertaking human action. If dust flies into my eye and my eye blinks, that's not human action. 38 00:04:50.480 --> 00:04:59.480 If I breathe, that's not human action. My physiological makeup compels my body, as it were, to breathe. 39 00:04:59.480 --> 00:05:05.480 I don't have to tell it that. I don't have to say, oh, I'd like a breath, I'll take one. 40 00:05:05.480 --> 00:05:17.480 Human action has to do with people's choosing means, using those means to achieve ends that they've selected for themselves to make themselves better off. 41 00:05:17.480 --> 00:05:34.480 Now, economics has to do with how people enter into relationships with others to exchange goods and services in a world where not everybody has the same thing everybody else has. 42 00:05:34.480 --> 00:05:50.480 People are in different positions, they have different skills, they possess different kinds of resources, and they discover that if they cooperate with one another by making exchanges, everybody can improve his position. 43 00:05:50.480 --> 00:05:58.480 So human action can be expressed in the form of exchanges, and that's what economics has to do with. 44 00:05:58.480 --> 00:06:28.480 the way people cooperate, notice I say cooperate, very frequently when people talk about economics they say it's about competition, but actually it's about cooperation, it's true that sometimes there's rivalry going on in the course of people making exchanges, but fundamentally what's going on here is cooperation, when I agree with somebody to make an exchange, that person and I are cooperating, 45 00:06:28.480 --> 00:06:36.480 and so economics has to do with how people exchange something. What is it that they exchange? 46 00:06:36.480 --> 00:06:41.480 It's not fundamentally that they exchange sticks and stones or they exchange goods and services. 47 00:06:41.480 --> 00:06:48.480 They exchange property rights. Property rights are claims on the behavior of other people. 48 00:06:48.480 --> 00:06:55.480 If I own my coat, it's saying that I'm the one who gets to decide how the coat will be used. 49 00:06:55.480 --> 00:07:08.480 I'm the one who will enjoy any benefits the coat yields, and if I choose to exchange it with someone to sell it or give it away, I'm the one who decides how to do that. 50 00:07:08.480 --> 00:07:19.480 So, rights to determine use, rights to appropriate benefits, rights to make exchanges, these are all parts of property rights which are claims on other people. 51 00:07:19.480 --> 00:07:33.480 Property rights aren't rights that I have against my coat. Property rights are rights I make against all of you, which restrict what you can do with my property. 52 00:07:33.480 --> 00:07:39.480 Property rights are essential for the successful functioning of an exchange economy. 53 00:07:39.480 --> 00:07:50.480 Because unless people have some security in their rights and against non-interference on the part of others, they don't know who can do what with what. 54 00:07:50.480 --> 00:07:56.480 And we have a world of confusion, reduced to kind of animal uncertainty and chaos. 55 00:07:56.480 --> 00:08:03.480 So property rights are at the root of economics. They allow exchange contracts to take place. 56 00:08:03.480 --> 00:08:20.480 And when these exchanges take place, they can take place directly, I can sell you my coat by just giving it to you, and in exchange you hand me a property of your own, that would be barter exchange. 57 00:08:20.480 --> 00:08:28.480 But in a complex world where there's division of labor and people don't all produce the same thing, 58 00:08:28.480 --> 00:08:35.480 they've discovered that the most efficient way to make exchanges is through a medium of exchange, 59 00:08:35.480 --> 00:08:39.480 something that gets in the middle of each of these trades, and that is money. 60 00:08:39.480 --> 00:08:44.480 That's the good that most people find to be most acceptable. 61 00:08:44.480 --> 00:08:52.480 So, the most accepted commodity in exchange becomes money. That's how money evolved. 62 00:08:52.480 --> 00:09:03.480 Why, at some point in history, many societies settled on the use of gold or silver as a commodity they would use for intermediating exchanges. 63 00:09:03.480 --> 00:09:13.480 So, if I want to part with my code, I can exchange it for money and then that money I can use to exchange for something else I want. 64 00:09:13.480 --> 00:09:18.640 I don't have to define somebody out there in the world somewhere who has what I want 65 00:09:18.640 --> 00:09:28.180 and wants my coat in exchange. So division of labor, market exchange, use of money, these 66 00:09:28.180 --> 00:09:39.760 are all basic ideas by which individuals pursue their selected ends and try to improve their 67 00:09:39.760 --> 00:09:41.400 and Material Well-Being. 68 00:09:41.400 --> 00:09:48.000 Now, in a market system, using money, prices become established. 69 00:09:48.000 --> 00:09:54.460 Instead of saying that my code exchanges for 10 loaves of bread, 70 00:09:54.460 --> 00:10:04.320 we could use a monetary unit and say my code is worth $100 and bread is $10. 71 00:10:04.320 --> 00:10:08.800 So that would tell us, in effect, that there's a 10 for 1 rate of exchange 72 00:10:08.800 --> 00:10:18.560 between Bread and this coat. So prices turn out to be a way of giving signals to people 73 00:10:18.560 --> 00:10:26.640 about the terms upon which they can make exchanges. And prices compress a lot of information because 74 00:10:26.640 --> 00:10:32.420 in the world we live in, prices are determined by the interaction of everybody who wants 75 00:10:32.420 --> 00:10:37.120 to make certain kinds of trade. Everybody who wants to sell jackets, everybody who wants 76 00:10:37.120 --> 00:10:43.520 to Sell Bread. Come to the market, they make the best deals they can, and out of their 77 00:10:43.520 --> 00:10:51.360 deals they settle on prices, and these market prices are the terms of exchange. And if somebody 78 00:10:51.360 --> 00:10:58.040 wants to consider whether a certain exchange can be made to improve his condition or not, 79 00:10:58.040 --> 00:11:03.880 prices give him the signal, the information that he can use to decide what's in his interest, 80 00:11:03.880 --> 00:11:33.880 The Theory of Money and Credit The Theory of Money and Credit The Theory of Money and Credit 81 00:11:33.880 --> 00:12:03.880 Supply it decreases and so price movements allow buyers and sellers to regulate their actions in a way so that they come into cooperation with one another and the amount that people want to buy and the amount that people want to sell comes toward equalization at a certain price and we call that market equilibrium. Real markets are always changing so they may not establish a price equilibrium for long 82 00:12:03.880 --> 00:12:10.880 in the market. That's the quick lesson there. Real quick, you've probably heard all of this before in some form in your encounter with basic economics, but we need to remember these basic items. 83 00:12:33.880 --> 00:12:43.880 This is not the common coin of the people you hear on television. They don't understand just what I told you in the last 10 minutes. 84 00:12:43.880 --> 00:12:48.880 They don't get it. They have a lot of crazy ideas about these things. 85 00:12:48.880 --> 00:12:56.880 Let's take a couple of examples to show how this way of looking at the world can be enormously helpful. 86 00:12:56.880 --> 00:13:03.600 The first example I'm going to give has to do with the Great Depression, which Doug French 87 00:13:03.600 --> 00:13:08.800 mentioned a while ago in relation to monetary policy. 88 00:13:08.800 --> 00:13:17.320 The Great Depression began in the middle of 1929 when the economy started to falter and 89 00:13:17.320 --> 00:13:24.320 firms began to produce less and some of them began to lay off workers and the economy began 90 00:13:24.320 --> 00:13:52.320 And then in October 1929 the stock market crashed and after that people began to more or less panic oh my goodness we're going to have a business bust, we're going to have a lot of unemployment as we have in the past when we've had financial crashes and business busts, so what should be done? 91 00:13:52.320 --> 00:13:57.040 Now this question of what should be done was actually a relatively new one in so far as 92 00:13:57.040 --> 00:13:59.520 the government was concerned. 93 00:13:59.520 --> 00:14:04.300 Although there had been business booms and financial booms and crashes for a hundred 94 00:14:04.300 --> 00:14:11.940 years or more, in general the government had not had any active policy to react to these. 95 00:14:11.940 --> 00:14:14.800 This was just something that went on in the world of commerce. 96 00:14:14.800 --> 00:14:19.840 If you were president of the United States and there was a business bust, say in 1893 97 00:14:19.840 --> 00:14:24.400 as it was, President Cleveland didn't say, oh, well, the government has to do A, B and 98 00:14:24.400 --> 00:14:29.840 C to offset this. He didn't say anything of the sort. He said, you know, people should 99 00:14:29.840 --> 00:14:36.720 get their affairs in order. If bad businesses have been started that aren't viable, well, 100 00:14:36.720 --> 00:14:42.360 they should go bankrupt and we should get rid of the misuse of resources and move on 101 00:14:42.360 --> 00:14:48.800 to put the economy in a better condition. So President Cleveland didn't have an anti-depression 102 00:14:48.800 --> 00:14:55.800 Policy. In 1921, President Harding didn't have an anti-depression policy. But in the 103 00:14:58.320 --> 00:15:05.320 past, when there was no anti-depression policy, depressions were brief and relatively shallow. 104 00:15:05.320 --> 00:15:10.860 So beware when the government comes to fix your problem. You may be on the verge of having 105 00:15:10.860 --> 00:15:17.660 your problem magnified and made terrifically bad. In 1929, President Hoover, despite the 106 00:15:17.660 --> 00:15:24.540 The myth that he was a laissez-faire, do-nothing president was actually the other way around. 107 00:15:24.540 --> 00:15:26.260 President Hoover was a progressive. 108 00:15:26.260 --> 00:15:32.260 He had come to believe that government could and should take a variety of actions to offset 109 00:15:32.260 --> 00:15:34.740 business declines. 110 00:15:34.740 --> 00:15:40.060 And one of the things he had come to believe, not just Hoover, but many others at the time, 111 00:15:40.060 --> 00:15:45.420 had to do with something we call the purchasing power theory of wages. 112 00:15:45.420 --> 00:15:51.620 And what he believed was that if wages started to fall in one of these business declines, 113 00:15:51.620 --> 00:15:57.580 that made things worse, and so if you could just persuade employers not to cut wages when 114 00:15:57.580 --> 00:16:04.780 business got bad, that would help keep these declines from becoming too bad. 115 00:16:04.780 --> 00:16:10.340 So Hoover called a number of conferences, and late in 1929, he got together a lot of 116 00:16:10.340 --> 00:16:29.340 and he appealed to them, he said, look, don't cut wages, keep your wage rates up, don't put these wage earners in a condition where they are not able to buy as many goods as before, they'll just make things worse. 117 00:16:29.340 --> 00:16:38.240 So, whether because people wanted to cooperate with Hoover's appeal or for some other reason, 118 00:16:38.240 --> 00:16:47.140 in fact, many business people did not cut wages in late 29, in 1930, and even into 1931. 119 00:16:47.140 --> 00:16:54.180 So for about two years or so, particularly in certain parts of the economy where manufactured 120 00:16:54.180 --> 00:17:01.740 goods were made and particularly manufacturing goods used by other firms rather than by consumers, 121 00:17:01.740 --> 00:17:07.460 the wage rates stayed just where they had been. But meanwhile, prices of goods and services 122 00:17:07.460 --> 00:17:13.600 were falling in the economy, demands for goods and services were falling, and the only way 123 00:17:13.600 --> 00:17:19.380 that firms could adjust to the fact they were losing money, if they weren't going to cut 124 00:17:19.380 --> 00:17:26.660 The wages they paid to workers, the only thing they had left to them was to lay off the workers. 125 00:17:26.660 --> 00:17:34.300 In other words, the wage rate is a price. It's a signal. It's a signal that tells employers 126 00:17:34.300 --> 00:17:40.900 about the relative abundance of labor in the economy. If wages are high, that tells them 127 00:17:40.900 --> 00:17:47.220 labor is scarce. You've got to find ways to economize on it. If wages are low, they say 128 00:17:47.220 --> 00:17:53.220 labor is abundant or at least if wages have fallen labor is more abundant so use more of it 129 00:17:53.860 --> 00:18:02.820 but what was happening in 1929 30 31 because of these wages being held up was that employers were 130 00:18:02.820 --> 00:18:13.220 being told labor is no cheaper than before so you know you've got to you've got to act as if 131 00:18:13.220 --> 00:18:19.300 Labor is just as scarce as before, but it wasn't. Unemployment was growing. 132 00:18:19.300 --> 00:18:23.300 And in fact, because these wages were held up, it grew much quicker. 133 00:18:23.300 --> 00:18:33.060 And this increase in unemployment between 1929 and 1931 later got up to about 25% of the labor force 134 00:18:33.060 --> 00:18:38.100 and was the highest unemployment ever recorded in the United States. 135 00:18:38.100 --> 00:18:45.780 25% unemployed, probably another 25% employed only part-time when they wanted full-time work. 136 00:18:45.780 --> 00:19:05.300 So it was a terrible situation for people in the U.S. economy, in part because the government distorted the signal of wage rates and led employers to lay off more workers than they would have if wage rates had been falling. 137 00:19:05.300 --> 00:19:17.300 So by distorting prices, by distorting signals, you distort incentives, you change people's behavior, you may make things worse by interfering that way, okay? 138 00:19:17.300 --> 00:19:33.300 Let me give you a second example. This one occurred in my lifetime, I remember it very vividly, it's known as the gas crisis or the energy crisis of the 1970s 139 00:19:33.300 --> 00:19:43.800 And it began in 1973. I happened to be living in the year 1973-74 in the Bay Area in California. 140 00:19:43.800 --> 00:19:52.800 And it was especially obvious there because Californians, perhaps more than even other Americans, love their automobiles. 141 00:19:52.800 --> 00:19:58.800 Very few of them ever leave their automobiles. They eat there, they sleep there, they raise their children there. 142 00:19:58.800 --> 00:20:03.000 So, Californians and automobiles are like that. 143 00:20:03.000 --> 00:20:09.400 The press always use that expression, Americans have a love affair with the automobile. 144 00:20:09.400 --> 00:20:13.560 Well I don't know if that's the right word, but the Californians had certainly developed 145 00:20:13.560 --> 00:20:19.840 a way of life in which the automobile played an integral role. 146 00:20:19.840 --> 00:20:21.480 So what happened here? 147 00:20:21.480 --> 00:20:25.120 How did this gas crisis come about? 148 00:20:25.120 --> 00:20:31.280 Well actually it came about in ways that didn't have anything directly to do with automobiles 149 00:20:31.280 --> 00:20:36.840 or gas lines at the stations or anything like that, it came about because in the late 1960s 150 00:20:36.840 --> 00:20:43.680 the rate of inflation began to increase, that is the purchasing power of the dollar began 151 00:20:43.680 --> 00:20:48.200 to fall quicker and quicker in the late 1960s. 152 00:20:48.200 --> 00:20:55.320 And that put the politicians all at quiver because they were afraid that they would be 153 00:20:55.320 --> 00:21:04.480 blamed by people for allowing this inflation, so they decided they had to somehow stake 154 00:21:04.480 --> 00:21:07.520 a claim that they were fighting it. 155 00:21:07.520 --> 00:21:13.800 And at that time, the Congress was controlled by Democrats and President Nixon, the Republican, 156 00:21:13.800 --> 00:21:15.440 was in office. 157 00:21:15.440 --> 00:21:21.160 And so, in 1970, the Democrats came up with the brilliant idea that they would put Nixon 158 00:21:21.160 --> 00:21:27.880 on the spot. They would enact legislation giving him the power to control wages and 159 00:21:27.880 --> 00:21:34.800 prices. And then, because Nixon, the so-called conservative, would never use that power, 160 00:21:34.800 --> 00:21:42.120 they could blame him for the inflation in the next election. Clever, huh? Well, Nixon 161 00:21:42.120 --> 00:21:52.080 to fool them because in 1971 he seized that power he had been given in 1970 and used it 162 00:21:52.080 --> 00:22:01.520 to impose comprehensive wage and price controls on the U.S. economy in the fall of 1971, along 163 00:22:01.520 --> 00:22:08.240 with some other things he did at that time. So price controls are put on everything including 164 00:22:08.240 --> 00:22:16.560 fuel, gasoline, fuel oil, anything made out of petroleum, and they were in existence when, 165 00:22:16.560 --> 00:22:22.400 a couple of years later, one of the periodic wars between Israel and its neighbors broke out, 166 00:22:23.120 --> 00:22:28.320 and at the same time something called the Organization of Petroleum Exporting Countries 167 00:22:28.880 --> 00:22:36.560 got together and agreed that they would act to keep the world's supply of oil from growing as 168 00:22:36.560 --> 00:22:55.560 So they squeezed down, because these countries altogether supplied an important part of the world's oil, they squeezed down on the rate at which they were allowing oil to be taken from their oil fields and put into the world's pool of oil. 169 00:22:55.560 --> 00:23:03.280 Now what that meant was that now there was less oil, or at least oil was not growing in supply at the rate it had been before, 170 00:23:03.280 --> 00:23:08.400 and so normally the effect of this would have been that oil prices would have risen. 171 00:23:08.400 --> 00:23:14.080 And from that, the price of things made out of oil, like gasoline, would have risen as well. 172 00:23:14.080 --> 00:23:22.760 That would have been a signal, a price signal telling people, oil is not as abundant as it used to be, use less. 173 00:23:22.760 --> 00:23:35.760 And that's the way prices are always acting. Prices move around telling people use more, use less, and people adjust to those incentives, bringing markets toward equilibrium. 174 00:23:35.760 --> 00:23:50.760 Well now, people should have been using less fuel or not increasing their use as quickly as they had been, but the price was still held down where it had been, because of the price controls. 175 00:23:50.760 --> 00:24:00.460 The price was telling them, fuel is as abundant as ever. Live it up. So people tried to buy 176 00:24:00.460 --> 00:24:08.960 fuel that wasn't physically there to be purchased. Now, the people who were selling it couldn't 177 00:24:08.960 --> 00:24:14.600 say, ah, this is great, people want to buy more of my product, I'll raise the price. 178 00:24:14.600 --> 00:24:19.600 They weren't allowed to legally raise the price. So what could they do? We had a situation 179 00:24:19.600 --> 00:24:49.600 There was an excess demand for gasoline that couldn't be rationed by the use of the price system, so it had to be rationed in some other way, and a variety of ways were tried, but the most important was that people just had to wait in line until they got to the pump, and if there was any fuel left when they got there, they got to buy it at the control price, and a lot of times the station would just come out and put up a close sign. 180 00:24:49.600 --> 00:24:56.600 And the people in the line had to say, well, tough luck, I'm almost out of gas, but I can't get any here. 181 00:24:56.600 --> 00:25:02.600 And they would wander around actually using gas, looking for stations that were open to sell them gas. 182 00:25:02.600 --> 00:25:05.600 It was bizarre. 183 00:25:05.600 --> 00:25:11.600 But this was another case where the government's action, namely the imposition of price controls, 184 00:25:11.600 --> 00:25:18.600 had distorted the market's signals, the operation of the price system, telling people 185 00:25:18.600 --> 00:25:23.600 Where they could benefit themselves by using more, using less. 186 00:25:23.600 --> 00:25:28.600 Virtually every time that the government interferes in the operation of the price system, 187 00:25:28.600 --> 00:25:34.600 and now we're talking about an almost infinitely large number of government programs, 188 00:25:34.600 --> 00:25:39.600 virtually every time the government interferes in the operation of the price system, 189 00:25:39.600 --> 00:25:46.600 the effect is to create false signals that lead people to use resources in a way 190 00:25:46.600 --> 00:26:01.440 In other words, it creates what economists call inefficiency in the use and allocation 191 00:26:01.440 --> 00:26:03.440 of resources. 192 00:26:03.440 --> 00:26:06.420 The price system is not just an artifact. 193 00:26:06.420 --> 00:26:11.000 Prices aren't there just because Mr. Jones at the corner store feels like charging a 194 00:26:11.000 --> 00:26:13.800 certain amount for a loaf of bread. 195 00:26:13.800 --> 00:26:19.380 The bread price is not really set by Jones at all. If he could set it, he might set it 196 00:26:19.380 --> 00:26:25.140 ten times as high. He can't because somebody else will set it lower and he'll have to 197 00:26:25.140 --> 00:26:32.340 lower his if he wants to sell any. So competition among sellers, competition among buyers brings 198 00:26:32.340 --> 00:26:40.300 prices into alignment. Producers don't control prices in a free price system fundamentally. 199 00:26:40.300 --> 00:26:59.300 The government interferes. It creates false signals. It creates inefficiency. It makes people actually worse off in the guise of protecting them from rapacious sellers. 200 00:26:59.300 --> 00:27:08.300 This is a political bill of goods. You know enough basic economics at this point never to buy that political bill of goods. 201 00:27:08.300 --> 00:27:16.260 If you ever see a political proposal to control prices, such as, for example, the recent health 202 00:27:16.260 --> 00:27:22.860 care reform bill, recognize that what you're seeing is something that will only make matters 203 00:27:22.860 --> 00:27:24.780 worse. 204 00:27:24.780 --> 00:27:32.460 And do not give your approval to politicians that propose to ruin your world in that fashion. 205 00:27:32.460 --> 00:27:33.160 Thank you very much. 206 00:27:38.300 --> 00:27:40.300 Thank you very much.