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Forum Post: The way to destroy [all countries'] corporate profits.

Posted 2 years ago on March 25, 2012, 10:51 p.m. EST by Misaki (893)
This content is user submitted and not an official statement

It's simple: a system that encourages people to work less at a higher rate of pay, but be more efficient so that the corporation profits. Which means all corporations should want to do it.

But each one that does it decreases the profit of all the other corporations. It's like a prisoner's dilemma with 18,000 players. (The number of corporations with more than 500 employees in the US: http://www.census.gov/econ/smallbus.html)

CORRECTION: Since it would include corporations in other countries, the number would be higher than 18,000. ___ PETITION ON CHANGE.ORG

http://www.change.org/petitions/the-people-of-the-united-states-have-faith-in-the-human-race-by-fixing-unemployment

From the comments: "I guess you could say that this way of 'destroying corporate profits' is a way, maybe the only way, to do it such that it increases the options for companies and their employees, instead of decreasing options. A difficult point to argue about I guess."

For those who say this would also mean the destruction of the economy: profits are what are left AFTER paying back loans, making new investments, paying all the workers, etc.

80 Comments

80 Comments


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[-] 4 points by PlasmaStorm (242) 2 years ago

If you destroy corporate profits, why would anyone invest in a company and how would their be any jobs?

FAIL

[-] 0 points by Misaki (893) 2 years ago

Profits are what are left after paying for jobs. Corporations would still have profits, those profits would just be much less than current.

"Since the recovery began in June 2009 following a deep 18-month recession, 'corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent' of that growth." The Wageless, Profitable Recovery - NYTimes.com http://economix.blogs.nytimes.com/2011/06/30/the-wageless-profitable-recovery/

Instead of being 88% and 1%, it would be 1% and 88%.

(reposting this, it got separated from the conversation)

[-] -1 points by aflockofdoofi2 (-66) 2 years ago

Corporations pay out profits as dividends. Take away dividends and most pension plansvwill be destroyed.

[-] 1 points by Misaki (893) 2 years ago

"As mentioned before, just look at the first full year of the crisis when workers lost an average of 25 percent off their 401k. During the same time period, the wealth of the 400 richest Americans increased by $30 billion, bringing their total combined wealth to $1.57 trillion" http://www.alternet.org/economy/145705/the_richest_1%25_have_captured_america%27s_wealth_--_what%27s_it_going_to_take_to_get_it_back?page=entire

Yep, that's working real well.

[-] 0 points by po6059 (72) 2 years ago

unions invest in corporations,these ows peopple are really dumber than dumb.

[-] 0 points by freewriterguy (882) 2 years ago

simple, we the people could make online stores and make our products here in america, we wouldnt ahve to pay yippie college grads big salaries, or pay billions in buildings, we could run it from our homes, and then quality and selection could restore when america used to be the standard for excellence. Success!

[-] -1 points by Reasonistheway (-13) 2 years ago

Then do it already. No one is stopping you.

[-] -1 points by gestopomillyy (1695) 2 years ago

because people investing does not equal jobs. where do you get that idea

[+] -8 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

A successful corporation that is making profits - even small profits - does not need investors to survive. It is fine all by itself. To grow faster it could be useful to have investors but it is not actually necessary.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

this makes me ask the question- why did face book go on the stock market ? zuckerburg didn't need any outside investment ..

[+] -6 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

Good question. I have no answer except the need of greed (?) and perhaps loss of control of his baby. Success can do strange things to people.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

I think there is a disconnect between stocks and the actual product, and.. the computer generating stock prices always tries to stay ahead of the trend whether it be up or down .. as buyers buy they raise the price as they sell they lower the price .. generating huge gains for the computer.. its just a friggin casino in my opinion. and the money invested in stocks doesn't go anywhere near the companies they represent.

[+] -6 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

There is an awful lot of smoke and mirrors in the market.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

just like the fed it would appear .. smoke and mirrors.. they have us working for debt !

[+] -5 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

Yes I have never really understood that.

Working for debt in a free country.

Seems counter intuitive.

Unless of coarse you want to use it as a little understood control.

In a free country. Huh.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

confusion - the elites "weapon of choice".

[-] -2 points by Reasonistheway (-13) 2 years ago

Then they've gone nuclear in your case.

[-] 0 points by MattLHolck (16833) from San Diego, CA 2 years ago

what's up with congress using the words of the high priest of Iran

Israel should be wiped off map, says Iran's president

    Share 138

Incumbent Mahmoud Ahmadinejad since 3 August 2005

The President of Iran is elected for a four-year term by the direct vote of the people and may not serve for more than two consecutive terms. reddit this

Ewen MacAskill and Chris McGreal in Jerusalem
The Guardian, Wednesday 26 October 2005
Article history

in 2112 declarations

[+] -5 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

That and misinformation.

Makes for quite a combination.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

it's all served with deliberate accuracy..

[+] -6 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

Yep. All part of the propaganda machine. Keep'em guessing and off balance.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

Well we could throw a few curve balls at them .. like "working for debt " the fed machine.

[-] 0 points by Misaki (893) 2 years ago

"If we could reach an over surplus of product we would than be able to work a shorter week. in theory .. or perhaps a perfect world."

Productivity growth vs wages: http://rortybomb.wordpress.com/2011/03/17/epi-on-lagging-wages-rising-productivity/

From the post: "• U.S. productivity grew by 62.5% from 1989 to 2010, far more than real hourly wages for both private-sector and state/local government workers, which grew 12% in the same period. Real hourly compensation grew a bit more (20.5% for state/local workers and 17.9% for private-sector workers) but still lagged far behind productivity growth."

A shorter work week won't happen until people see value from working less; which won't happen without the system linked in the OP.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

sorry , I don't open links on this site.

[-] 0 points by Misaki (893) 2 years ago

Re: rant

Lots of homes are sitting vacant and foreclosed, owned by banks. There are many people in the US who would like these homes, but can't afford it because they have a bad job or no job at all.

Is having too many houses a bad thing? I don't really think so. Is having houses left empty a good thing, because the people who can afford to buy them have no use for them (already have a house, or houses)? I don't see how it is a good thing.

Economics is the study of the distribution of scarce resources. Money is scarce, because we have agreed that you can't just print money for yourself, and work is also scarce but neither of these are being fairly distributed. If you want all this "surplus of product" from people working too much to be fairly distributed, the system linked in the original post is the best way to make it happen.

[-] 0 points by FriendlyObserverB (1871) 2 years ago

If we could reach an over surplus of product we would than be able to work a shorter week. in theory .. or perhaps a perfect world.

[+] -6 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

You need to expand on that one a little bit. Apparently I have not had enough fresh hot vitamin C yet today. Synapses a little sluggish.

[-] -1 points by FriendlyObserverB (1871) 2 years ago

well, behind all that propoganda lies a motive ... the smoke and mirrors are there to create an illusion of right and wrong ..the complexity keeps us from tracking down the source of the motive / the truth. but there is no perfect crime ! and it is in this imperfection lies the weakness of the whole scheme..

As we work for the government it becomes a debt to the nation .. something is wrong with this picture yes ?

As the markets become flooded with product we are told it is bad because a surplus of product makes prices go down .. and we are told a shortage of product creates demand .. again all part of the brainwashing propoganda BS techniques we are sold by capitalists markets .. I magine having too much of something is a bad thing ? thats like saying black is white .. If we went to mars and found out we were short of oxygen and food the markets would say that is a good thing .. Now how could being short of food and oxygen on mars be a good thing ..

the moral of the story , the markets are wrong .. the markets are feeding us lies. and behind all these lies and devious schemes lies the motive .. and the only possible motive is to widen the gap between the rich and the poor .. create a debt as they work .. hell what a great plan .. that way the harder they work the greater the debt they will create .. and always trying to pay off the debt will encourage them to work even harder .. hahahaha can you hear the laughter from behind the fed walls !!! and all the back slapping partying going on .. while the rest of us look at the smoky mirrors with a dumfounded expression .. and believe their hogwash.

well that my morning rant .. thanks !

[+] -7 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

And a nice rant it was too. [:-D

Gotsta let those things out once in a while it feels good and if done positively can share knowledge as well. Good job.


[-] 1 points by FriendlyObserverB (856) 1 minute ago

well, behind all that propoganda lies a motive ... the smoke and mirrors are there to create an illusion of right and wrong ..the complexity keeps us from tracking down the source of the motive / the truth. but there is no perfect crime ! and it is in this imperfection lies the weakness of the whole scheme..

As we work for the government it becomes a debt to the nation .. something is wrong with this picture yes ?

As the markets become flooded with product we are told it is bad because a surplus of product makes prices go down .. and we are told a shortage of product creates demand .. again all part of the brainwashing propoganda BS techniques we are sold by capitalists markets .. I magine having too much of something is a bad thing ? thats like saying black is white .. If we went to mars and found out we were short of oxygen and food the markets would say that is a good thing .. Now how could being short of food and oxygen on mars be a good thing ..

the moral of the story , the markets are wrong .. the markets are feeding us lies. and behind all these lies and devious schemes lies the motive .. and the only possible motive is to widen the gap between the rich and the poor .. create a debt as they work .. hell what a great plan .. that way the harder they work the greater the debt they will create .. and always trying to pay off the debt will encourage them to work even harder .. hahahaha can you hear the laughter from behind the fed walls !!! and all the back slapping partying going on .. while the rest of us look at the smoky mirrors with a dumfounded expression .. and believe their hogwash.

well that my morning rant .. thanks ! ↥like ↧dislike permalink

[-] -1 points by Reasonistheway (-13) 2 years ago

Ahh, liquidity for himself and other investors, maybe. If people create businesses, would you ignorant nut jobs make it illegal to sell parts of them?

Failure does even more strange things. Look at your posts and their volume for an example of what I mean.

[+] -6 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

Did a personality ( if you can call them that ) of yours get banned?

Or are you just here with this username to display more odd thinking in opposition to your name?


Reasonistheway

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[-] -2 points by Reasonistheway (-13) 2 years ago

Nope, this just isn't a full time job like it is with you. You are an occutard.

[+] -4 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

I don't get paid I volunteer.

So what are you a Koch Whore?

[-] -2 points by Reasonistheway (-13) 2 years ago

Do you have a job? With 5,000 points, that must work out to perhaps tens of thousands of posts. That's kinda screwy, just sayin'. Are you a shut-in or a government employee without a real job to do?

[+] -5 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

I am retired. This is a good forum for a good cause. It's time has come.

[-] -2 points by Reasonistheway (-13) 2 years ago

Retarded? Poor dear. Well, at least that explains it.

[+] -6 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

(x)

[-] 0 points by ReasonIsgood (9) 2 years ago

But those investors need to keep their capital in that enterprise. Do as you suggest, and watch investors stop re-investing and turn everything into wind down mode. And investing isn't just to grow, it's just to keep pace. Think, if you can, about how much is new in the economy from just ten years ago. Now imagine capital not being there to make that happen. Smarten up.

Agree, another FAIL.

[-] 1 points by Misaki (893) 2 years ago

http://krugman.blogs.nytimes.com/2011/07/02/cash-is-not-the-problem/

Before the recession, corporations were BORROWING money because they were able to use that money to invest in capital and make a profit. Now they're just sitting on money, while wages and salaries stagnate.

"Borrowing" means that no, corporations don't need to have high profits to exist. They just have to offer a good product.

[-] -2 points by Reasonistheway (-13) 2 years ago

WTF, huh? Lenders lend their capital again, why do you suppose? There's a reason why you don't run anything.

[-] 2 points by Misaki (893) 2 years ago

What are you responding to?

[-] -2 points by Reasonistheway (-13) 2 years ago

Boroowing means companies don't need high profits, it means they just need to have a good product? Huh? Lenders evaluate companies for their creditworthiness; debt is capital too. And you think a "good product" is all they look at? Huh?

[-] 1 points by Misaki (893) 2 years ago

If the profits of all corporations were reduced by 50%, would lenders suddenly stop lending to the ones that topped in profitability? (Or had a business plan, which includes the type and quality of products sold, that would cause them to lead in profitability.)

[-] -2 points by Reasonistheway (-13) 2 years ago

You occutards need to occupy an economics class. Gee, I got it, because our plans would make equity owners lose interest, we'll just borrow the capital we need! That runs it's course too. Lenders think about repayment. The worse a company gets, the higher the borrowing rates go until they're cut off all together. Another FAIL.

[-] 2 points by Misaki (893) 2 years ago

Borrowing rates are at historical lows. Companies and banks have enough money and don't need high profits to survive (profits are what are left AFTER investing in further expansion, you know).

And banks will never run out of money to lend unless people stop putting their money in the bank.

[-] -1 points by Reasonistheway (-13) 2 years ago

That's just so stupid. Banks and others don't lend simply because they've haven't "run out" of money. They lend with the prospect of being repaid. Wrecking businesses and then thinking the capital problem will then just be filled in with debt is just dumb and more occutard nonsense.

[-] 2 points by Misaki (893) 2 years ago

Profits are what are left AFTER paying back debt from investment.

Learn2accounting.

[-] -1 points by Reasonistheway (-13) 2 years ago

Really, wow, thanks for that. Companies that can't attract equity capital will also eventually be unable attract debt capital. Truly, you are an occutard.

[-] 3 points by Misaki (893) 2 years ago

"All corporations" means other countries too, silly.

Have you even looked at the site in the OP, or have any idea where this "reduction in corporate profits" would come from? Or am I trying to argue with someone who doesn't have any idea what this thread is about?

But thank you for letting me understand one objection people have to this "plan": they don't know what it would involve.

[-] -1 points by Reasonistheway (-13) 2 years ago

Of course, because that's what types like you depend on: eliminating freedom. Because as long as freedom exists, people won't stand for your control and dictates. They'll leave. So, you'll stop them from leaving outright or eliminate their freedom at their destination as well. Nice.

[-] 2 points by Misaki (893) 2 years ago

If the profits of all corporations were reduced by 50%, would investors suddenly stop investing to the ones with good business models and management? Fixed my previous statement for you.

[-] -1 points by Reasonistheway (-13) 2 years ago

They'd invest elsewhere. It would also be a powerful signal that the gooks are running the country and they'd rightfully expect the next nut-case idea to be not be far off.

What's funny is how Toronto could become the North Ameican financial hub. Canada has steadily shaken off much of its leftist ways. And as the U.S. gets nuttier with taxation and regulation, Toronto could end up looking like a great destination for capital and talent. Ever wonder why capitalist countries don't have to stop people from leaving?

[-] 1 points by Misaki (893) 2 years ago

What? You're being unintentionally amusing. Profits would drop at corporations that didn't use this system. Profits would rise at corporations that used this system.

(Profits would also rise at corporations that didn't use this system but competed on price, up until the point where they get hit by inflation and people get tired of working 60 hours per week at minimum wage + overtime. http://motherjones.com/print/161491)

So yes, business owners or corporations that left a country using this system would have all the freedom in the world to be unprofitable using the regulations that currently exist in those countries, exactly as intended.

[-] 0 points by MattLHolck (16833) from San Diego, CA 2 years ago
[+] -7 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

I think what you are looking for is responsible reinvestment of profits. And If a corporation is strong steady and profitable there are those who would invest because they like what the corporation is doing they like the technology being developed. As long as the investment is doing no worse then say a savings certificate it should still be attractive. Especially if that product is a hit with consumers. There will be the good growth for all concerned, as long as the corporation remembers to include it's employees for their contributions.

[-] -2 points by Jflynn1964 (-206) 2 years ago

Have you ever run a business? Companies don't make a high enough profit margin to finance growth in new buildings, machinery and people. Hence they have to finance it with debt or equity.

[+] -5 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

I was Quality Assurance Manager for twelve years in a small multi-million dollar a year business. We designed and manufactured tools for industry. Yes I know about business and reinvestment of profits as well as Banking for expansion/growth. If you are successful you go in the direction of your choice.

[-] -1 points by Jflynn1964 (-206) 2 years ago

Then explain how a business grows without financing?

[+] -4 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

That's what reinvestment of profits is for. Proper money management. Save it Invest it. You can always get financing if you want it but unless you are making a major ramp-up of the business to meet a surging market and to fill piling-up back-orders, why bother? Why pay interest to someone else if you don't need to move that fast.

[-] 1 points by Misaki (893) 2 years ago

One word: leverage. (I think)

I'm really not an expert, but here's what I have found. 1) As many people know, corporations have record amounts of cash. http://www.profitconfidential.com/stock-market/warning-corporate-debt-to-cash-reaches-record-high/ (mentions cash, and also has chart of corporate debt = ~$8 trillion) http://finance.yahoo.com/news/why-corporate-cash-pile-isnt-163940462.html

NEW YORK (AP) -- Hardly a day goes by without some politician or pundit pointing out that companies are hoarding cash — roughly $3 trillion of it. If only they would spend it, the thinking goes, the economy might get better. [...] U.S. companies are sitting on $358 billion more cash than they had at the start of the recession in December 2007, according to the latest Federal Reserve figures, from June. But in the same period, what they owed rose $428 billion.

2) However, corporate debt-to-equity is always around 55~60%. http://www.statcan.gc.ca/daily-quotidien/111213/longdesc-c111213b.htm

So basically, debt levels are normal and irrelevant to the argument. Corporations are hoarding cash. The yahoo article: "S&P 500 companies have borrowed an additional 44 cents for every additional dollar they've hoarded in cash." ...and when total corporate debt is $8 trillion, and cash is only $3 trillion, this means that these high profitability companies see much less reason to take on debt than the average company.

[-] -2 points by Jflynn1964 (-206) 2 years ago

There are very few companies that have a high enough profit margin to be able to produce enough cash to finance growth. Apple is today's example.

[+] -4 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

That is plain bull. If you have executive officers that are pulling down 200% or more than their main work force then yeah you are likely to have some difficulty. That is why it requires sound money management.

[-] -2 points by Jflynn1964 (-206) 2 years ago

I don't know what to tell you, I don't make up the numbers. Look at most of the Fortune 1000 companies. They all use financing to grow. How do you think United Airlines buys a plane or Ford Motor buys a new tool machine.

[+] -4 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

Because something is done does not mean it has to be done. Just like your average person is better off without a credit card. Cash and carry is better as you don't end up paying more than the purchase price. Then you make money off of your investment sooner as well.

[+] -5 points by DKAtoday (33128) from Coon Rapids, MN 2 years ago

Well obviously someone has a problem with this thought.


-4 points by DKAtoday (5279) from Coon Rapids, MN 5 days ago

A successful corporation that is making profits - even small profits - does not need investors to survive. It is fine all by itself. To grow faster it could be useful to have investors but it is not actually necessary.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

Alex for $500- who is the CEO.

A system where you work less and receive more pay while the corporation profits .. describes the CEO's position to a "T

[-] 1 points by Recycleman (102) 2 years ago

Redistribution of profit. If employees all were paid bonuses based on profits before tax then the company would still be profitable on the books and the employees would receive fare share on the profit. That is what the CEO bonus is derived upon.

Now when you look at the profit of American companies do you account for 3rd world labor. Labor reduction is the first expense to be reduced. Second is benefits.

The CEO has no advantage to build a better product to improve profits when they can reduce labor cost by 80% by exporting jobs. Ironically it happens to the 3rd world countries when the reach $8 a day rates. Their jobs go to the next slaves for profit.

On the other hand CEOs and wall street will recommend those changes to highly profitable companies to increase profits even more.

You have to under stand that the stock market only pays when there is commissions paid. To generate commissions you have to sell and buy the stocks. To generate trillions on dollars in bonuses every year they have to push executives to show the money.

Companies do not get rewards for keeping jobs in the USA even with high profits. It's increase of profits that makes stocks sell.

[-] 1 points by Misaki (893) 2 years ago

"Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. Notably, with production workers in manufacturing down to about 6 percent of U.S. employment, there aren’t many assembly-line jobs left to lose. " From www.nytimes.com/2011/03/07/opinion/07krugman.html?_r=1

[-] 1 points by Recycleman (102) 2 years ago

That is why we have to keep those jobs and understand the new production is Retail. We have lost millions of job for the sake of future profits

[-] 1 points by FriendlyObserverB (1871) 2 years ago

And they try to tell us the market decides the prices ...

[-] 1 points by Recycleman (102) 2 years ago

The best product sets the price

Ask apple.

[-] 1 points by Misaki (893) 2 years ago

Plenty of people were willing to buy HP's Touchpad at $99. Most of those people probably did not bother buying an iPad at its current price of double what it costs to manufacture.

Just because a product is "best" (I assume you mean "lets you buy into a social phenomenon", because Apple has never been known for having the best value/cost ratio) does not mean everyone feels that the premium for the "best" product is worth the marginal value.

[-] 1 points by Recycleman (102) 2 years ago

Value/cost is based on a predetermined value. with this in mind the new Ipad sold 3 million units in the first week. How many HP touchpad have sold

[-] 1 points by Misaki (893) 1 year ago

Was checking someone else's old threads which seemed to be cut off beyond a date and decided to check the ones I created, and this thread isn't showing up. Testing to see if it has been hidden despite that it wasn't before.

[-] 1 points by Misaki (893) 2 years ago

Added petition.

[-] 1 points by Dell (-168) 2 years ago

and you win how by destroying corporate profits? how does that benefit you ?

[-] 1 points by Misaki (893) 2 years ago

What's important is how it happens. Putting into law mandatory 30-minute rest breaks every hour would also destroy corporate profits and fix unemployment, but this would be a waste both because it forces people to take breaks who don't want to, and those who do want to work less would be vastly constrained in the activities they could do during those short breaks at work.

With the concept linked in the original post, the benefits would range from "corporations have less money to spend on influencing politics" to "better resource conservation" to "less crimes committed due to being poor" to some other ones which are hard to describe or convincingly argue, like "being honest would be more viable than it is now" and "intelligent people would have less reason to be depressed about the world".

..that second paragraph missed the point, since the first three would also occur in the 30-minute rest break scenario. Which could never become a law since it would be bad for companies that used it, unlike this concept which would be good for companies that use it.

I guess you could say that this way of "destroying corporate profits" is a way, maybe the only way, to do it such that it increases the options for companies and their employees, instead of decreasing options. A difficult point to argue about I guess.

[-] -1 points by Dell (-168) 2 years ago

hahahaha! put down the crack pipe already geezzz!

[-] 1 points by Misaki (893) 2 years ago

Explain.

[-] 1 points by RedJazz43 (2757) 2 years ago

The Reagan administration helped to destroy world Stalinism largely by massively increasing military spending to the point where it nearly bankrupted the US, but did bankrupt Stalinist Russia. As David Stockman put it, it was a rush to see who would go broke first.

Today as anyone who has been to New York in the past week can attest the struggle of OWS is quite similar. The Bloomberg administration is spending vast sums of limited resources on police over time for cops being used against OWS. Meanwhile it continues to curtail all kinds of other services such as schools and garbage collecting. We need to keep the pressure on until we break the motherfuckers.

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