A Free Market Flaw?

This is a good point and yet ANOTHER problem with the corporate business form. The laws of nature being what they are, any particular individual's accumulation of property MUST change hands within a generation. Now the original accumulator MIGHT be able to keep his property concentrated in a single heir. And at least in theory THAT heir might choose a single heir. But each time the owner dies, the chance of keeping the accumulation together gets more remote. Venerable common law prevents a person from using his will to keep his estate together after he dies. It is called the rule against perpetuities and the purpose was to prevent any individual from keeping resources off the market beyond their lifetime.

Corporations, on the other hand, being fictional beings, are eternal. They can keep accumulating property forever, getting bigger and bigger, unrestrained by the laws of nature that tend to disperse and recirculate the wealth of mere mortals.

None of this matters if we eliminate taxes. The goal of a free society should be to eliminate all coercive confiscation of wealth. The fact that corporations provide a a better way to avoid being stolen from is merely pointing out that human beings will adapt to their surroundings. I'm not disagreeing with you just making the point that reform lies in the correcting of the cause not the effect of our current situation.
 
If you don't believe in punishing fraud and violence then we cannot have a discussion. Attempting to divorce coercion from human interaction is gonna be as easy as trying to get humans to only have sex for procreation. It goes against our natural tendencies.
Yeah, because people here are arguing for that straw man.

Even then, it reinforces my point. I believe that involuntary action is unwanted (or it'd be voluntary) therefore under a free society voluntary action would be taken to implement, privately, methods of minimizing involuntary action from coercive agents. Much like private insurance organizations exist to minimize the reality of risk.

You do not solve the tendency of humans to resort to violence and force by instituting a leviathan institution of violence and force. If we wanted to rid the world of Seaworlds, we wouldn't be helped by establishing one GIANT Seaworld.
 
misunderstand

None of this matters if we eliminate taxes. The goal of a free society should be to eliminate all coercive confiscation of wealth. The fact that corporations provide a a better way to avoid being stolen from is merely pointing out that human beings will adapt to their surroundings. I'm not disagreeing with you just making the point that reform lies in the correcting of the cause not the effect of our current situation.

I'm not talking about taxes. I'm talking about perpetual ownership by artificially created immortal "beings". The market works best when resources are continually reallocated to their highest use in meeting the demands of market participants. An individual human may amass a large concentration of resources and, through whim or incompetence, apply those resources to a use that doesn't effectively meet the needs of others. Or they may use those resources in a manner that is harmful to social harmony. In other words, a rich asshole might make a nuisance of himself and the market may only have limited powers to correct that . But because that person's life is limited by natural law, the duration of the inefficiency is also limited. When he dies, others will take control and eventually the property will be disbursed for the market to reallocate.

But corporations are eternal. Monsanto was born before you were and will still be around when you die. And when your children die. And so on. Gathering resources the whole time. And the resources it has accumulated will never be disbursed by natural forces. Market forces may eventually do the job, but the government-created entity of the eternal corporation does a sidestep around an important natural, free-market equalizer.
 
I'm not talking about taxes. I'm talking about perpetual ownership by artificially created immortal "beings". The market works best when resources are continually reallocated to their highest use in meeting the demands of market participants. An individual human may amass a large concentration of resources and, through whim or incompetence, apply those resources to a use that doesn't effectively meet the needs of others. Or they may use those resources in a manner that is harmful to social harmony. In other words, a rich asshole might make a nuisance of himself and the market may only have limited powers to correct that . But because that person's life is limited by natural law, the duration of the inefficiency is also limited. When he dies, others will take control and eventually the property will be disbursed for the market to reallocate.

But corporations are eternal. Monsanto was born before you were and will still be around when you die. And when your children die. And so on. Gathering resources the whole time. And the resources it has accumulated will never be disbursed by natural forces. Market forces may eventually do the job, but the government-created entity of the eternal corporation does a sidestep around an important natural, free-market equalizer.

I'm not sure if there's any libertarian case against this though. I mean, even free market joint-stock companies would actually share this particular benefit with statutory corporations. Plus, the individual shareholders can and will die, and their shares of the corporation will likely be split among multiple heirs at the time. Of course, sometimes eternal entities can hold shares of other eternal entities, but ownership is ultimately traced back to mortal humans, whose shares of whatever will be split upon their death.
 
I'm not talking about taxes. I'm talking about perpetual ownership by artificially created immortal "beings". The market works best when resources are continually reallocated to their highest use in meeting the demands of market participants. An individual human may amass a large concentration of resources and, through whim or incompetence, apply those resources to a use that doesn't effectively meet the needs of others. Or they may use those resources in a manner that is harmful to social harmony. In other words, a rich asshole might make a nuisance of himself and the market may only have limited powers to correct that . But because that person's life is limited by natural law, the duration of the inefficiency is also limited. When he dies, others will take control and eventually the property will be disbursed for the market to reallocate.

But corporations are eternal. Monsanto was born before you were and will still be around when you die. And when your children die. And so on. Gathering resources the whole time. And the resources it has accumulated will never be disbursed by natural forces. Market forces may eventually do the job, but the government-created entity of the eternal corporation does a sidestep around an important natural, free-market equalizer.

So our job is to end the GOVT protection of corporations like that and force them to serve us in a way that is beneficial to us.
 
I am also a libertarian attorney, if that makes any difference. And I deal with corporations in the real world on a regular basis. My narrative describes the law as it currently exists. Is there some specific aspect of it that you think is false?

Not really, because you’re just making anonymous and baseless claims in a message board, which anyone can do (and sounding a bit Ralph Naderish). That’s not what Kinsella does.

I’m not sure you're against limited liability for passive shareholders in the area of torts, which is what bothers many people about the law. In any case, back up the following assertion you made, with a source or two that a libertarian would respect:

“But if things go bad - a breached contract, an injured bystander, a looted pension plan, a polluted piece of land - then the corporation can dissolve and disappear leaving no living being to take responsibility for its actions.”
 
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Sure

I’m not sure you're against limited liability for passive shareholders in the area of torts, which is what bothers many people about the law. In any case, back up the following assertion you made, with a source or two that a libertarian would respect:

“But if things go bad - a breached contract, an injured bystander, a looted pension plan, a polluted piece of land - then the corporation can dissolve and disappear leaving no living being to take responsibility for its actions.”

Do you know how corporations function?

Let me explain it to you.

Let's say you enter into a contract with a corporation for the purchase of widgets. You pay the corporation and they never deliver the widgets. The money you paid the corporation was distributed to the shareholders. You sue the corporation but - guess what - it has no assets. And you can't go after the shareholders because of the corporate liability shield. This happens all the time.

This is the main reason corporations exist - to shield the investors from personal liability. Did you think that you could pursue shareholders of a corporation for the debts of the corporation?
 
libertarian case

I'm not sure if there's any libertarian case against this though. .

The libertarian case is that the government has no business creating artificial human beings. And only real human beings should be able to own property and sign contracts. Property ownership is a cornerstone of libertarian philosophy, but corporations muddle up the whole idea.

And the libertarian ideal of individual responsibility is turned on its head by the creating of artificial individuals designed to shield real individuals from responsibility for their actions.


I mean, even free market joint-stock companies would actually share this particular benefit with statutory corporations. .

Joint-stock companies of various kinds exist. Those that are essentially like partnerships are fine because there is no government-limited liability and the ownership of assets is direct, though shared. With corporations, the shareholders do not own, and have no title to, property owned by the corporation.

Depending on how they are arranged, partnerships can be perpetual. New partners are taken in as old partners die off. That is true. But it is actually not very common.

.
.Plus, the individual shareholders can and will die, and their shares of the corporation will likely be split among multiple heirs at the time.

Shares are transferred but corporate assets are not. The stock of US Steel has totally changed hands a thousand times since its inception, but the old factories are still there, still owned by the same immortal entity.

.Of course, sometimes eternal entities can hold shares of other eternal entities, but ownership is ultimately traced back to mortal humans, whose shares of whatever will be split upon their death.

The shares are transferred but the assets of the corporation are not. They continue to accumulate endlessly
 
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partially

So our job is to end the GOVT protection of corporations like that and force them to serve us in a way that is beneficial to us.

End the government CREATION of corporations. And end the government protection of ALL businesses. Establish that only human beings can own property or enter contracts. And let the market do what it will.
 
“But if things go bad - a breached contract, an injured bystander, a looted pension plan, a polluted piece of land - then the corporation can dissolve and disappear leaving no living being to take responsibility for its actions.”

Do you know how corporations function?

Let me explain it to you.

Let's say you enter into a contract with a corporation for the purchase of widgets. You pay the corporation and they never deliver the widgets. The money you paid the corporation was distributed to the shareholders. You sue the corporation but - guess what - it has no assets. And you can't go after the shareholders because of the corporate liability shield. This happens all the time.

This is the main reason corporations exist - to shield the investors from personal liability. Did you think that you could pursue shareholders of a corporation for the debts of the corporation?

I’m not interested in more of your “explanations”. I asked you to back up your claim with a source or two that a libertarian would respect, and you didn’t do so, as you’ve yet to back up anything you’ve asserted in this thread.
 
End the government CREATION of corporations. And end the government protection of ALL businesses. Establish that only human beings can own property or enter contracts. And let the market do what it will.

That should have been the answer to the OP, (who posted 1 Troll post and never has responded)

That this has gone on is rather pathetic.
(8 pages, 70 posts, 1,198 views)
 
That should have been the answer to the OP, (who posted 1 Troll post and never has responded)

That this has gone on is rather pathetic.
(8 pages, 70 posts, 1,198 views)

Yep I look at anyone with a date of Aug 2010 or Sept 2010 as suspect. Quite a few lately.
 
That should have been the answer to the OP, (who posted 1 Troll post and never has responded)

That this has gone on is rather pathetic.
(8 pages, 70 posts, 1,198 views)

Uh oh, it’s the dreaded “one- post troll”. His kind are swarming this place. :rolleyes:
 
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Corporations aren't threatening me with guns if I don't pay taxes.

Corporations aren't going to kill me or throw me in jail for smoking a plant.

Governments are far more dangerous than corporations.
 
?

I’m not interested in more of your “explanations”. I asked you to back up your claim with a source or two that a libertarian would respect, and you didn’t do so, as you’ve yet to back up anything you’ve asserted in this thread.

You want citations to case law and statute? This is the law, not a matter of opinion.
 
agreed

Corporations aren't threatening me with guns if I don't pay taxes.

Corporations aren't going to kill me or throw me in jail for smoking a plant.

Governments are far more dangerous than corporations.

Agreed. Except many corporations co-opt the government use of force. Then they become just as dangerous. Much of what government does to you (and to innocents in other lands) is done on behalf of corporations.
 
The federal government should not be involved in decisions regarding free enterprises therefor eliminating lobbyists and the special interests. The people are what keep the free market in check. If someone makes a bad product then consumers will punish them by not buying it and that will hurt them financially. NO GOVERNMENT SUBSIDIES to help failing companies.
 
I don't think this is a "free market flaw" or with libertarian theory itself, but it is a problem of implementation that means (imho) that any attempted transition to libertarianism from our current system is probably doomed to failure.

The problem, as I see it, is a question of the order in which things are done. You can talk about stuff like eliminating taxes and business regulations, but this would be a disaster. The regulations and taxes we have are after-the-fact corrections to a corporate/government power structure that existed before they were needed.

e.g. "Just vote with your dollars" doesn't work. I've never bought anything at Goldman Sachs or Lockheed, but they're still getting my money.

To use an analogy, imagine that an unregulated free market is like a boat. The boat is doing just fine, until someone shoots a hole into the bottom of it. I then stick a cork into the hole, and the boat stops taking on water as quickly (but it would be better if the hole weren't there, obviously)

When the government started issuing all these corporate charters with the railroads, that was like shooting a hole in the boat. When the government started passing more and more corporate regulations, that was like sticking a cork in the hole that they made.

Removing the cork at this point is a bad idea, as is removing all the regulations on corporations. You need to remove them in the order that they were put in place, not in reverse..

In other words, the regulations we have today ARE necessary because of earlier government intervention in the economy.

Corporations are creations of the government, therefore allowing corporations to act unchecked is not allowing the free market to operate, it's actually allowing the government to act unchecked.

Sometimes, I think of myself as a "libertarian in liberal's clothing." I actually support economic policies that libertarians despise like punitive levels of progressive taxation, corporate regulation, etc. However, the reason I support them is because I believe they are necessary given the current underlying distortions that are already present in the market due to previous government intervention. Allowing corporations to keep all of their profits at this point is like allowing a bank robber to keep all the money he stole. Until the underlying distortions in the market (corporate personhood, public/private collusion, etc) are removed, removing the bandages will only make things worse.

What corporations do is essentially like telling a bank robber that no matter what happens during a robbery, the worst that will ever happen is he might be forced to give back some of the money. If the worst thing that could happen were having to give back some of the money I stole, I'd be robbing banks all day long.
 
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there will never be a free market system until the federal government follows the constitution
 
The free market is the ONLY system that gives individuals true power, since they can vote (without being coerced) with their dollars.

If you want corporations to have less power, the LAST thing you would want is government intervention.
That seems very much like a canned response. You're not even trying to argue your case.
What exactly is stopping me from buying anyone and everyone out if I'm the richest man in the world?


So this idea of an "unregulated free market" is a contradiction in terms in my opinion. There would be regulations to prevent injustice. But not "laws" enforced that are by their nature unjust.
May I ask who decides these "regulations" and who defines what is just and unjust? And can you explain to me how these people are safe from corruption etc.?


EDIT: Oh yeah, almost forgot. You're thread title and post count is very suspicious and makes it look like you are simply trolling the boards. I mean "free market flaw" when in the post you play ignorant and are asking questions. Just saying.
Wow, so I'm not allowed to ask a question as a new member without being accused of being a deceptive troll?
I did not in any way offend anyone with what I wrote, and tried my best to be respectful. I think you mistook my modesty for deception, just as I might be misinterpreting your paranoia and ignorant arrogance as stupidity.


If corporation are using their power to manipulate flow of say tax dollars, then it is no longer a truly free market. I believe that would go under what Ron Paul calls chrony capitalism.
But the issue is that it seems like an inevitable problem; the free market will never exist because as soon as anyone has the opportunity to manipulate it, they will.



Long story short: If you want to take away the power of corporations to control government, the only feasible solution is to eliminate that arbitrary government power altogether and take precautions against it ever being reauthorized. Limits on government power need to be hard and non-negotiable (no matter what extreme scenario or sob story someone can come up with for "fudging" them on occasion)...or there won't be any limits at all.
I think the founding fathers tried their best to limit government power, yet, where do we stand today? The sad truth is that government will never serve the people. They'll only serve the people if it either serves them also, or if they are hurt directly every time they don't.


Does ShadoD mean Shadow Democrat? :p
OP did a post and run.

Haunting must have ceased. :)
[SARCASM]
Thanks for your very constructive contribution to this thread!
[/SARCASM]



I agree money is power perceived.
I assert entrepreneurs drive the economic engine.
I assert successful entrepreneurs get rich.
I assert successful rich entrepreneurs figure out how to take advantage of any monopoly of force to stifle competition.
I assert successful rich entrepreneurs are successful and rich because they are good at selling their ideas.

The only way to ever keep successful rich entrepreneurs in check is to insure there is no monopoly of force they can bribe to plunder the competition and there can always be competition which is a potential threat to their wealth.
So if I'm Intel and you are AMD, and I pay say DELL and HP to not buy your products, how would you stop that? Or should you even stop that?


First, money is nothing more than a tool. It can be an ELEMENT that enables certain sorts of power, but in and of itself it is not power. Electricity is raw power. Store it in a capacitor and bridge the leads with your wet hands and you will find this out shortly before you die. A stack of currency will do nothing of the sort because it is just paper.
Thanks for stating the obvious. However, if you wanna see how ironic your analogy is, try this:
Take a 1000 USD cash into a poor part of say Africa, and let's see how long it takes for you to be robbed/killed.
Seriously though, money will always (in a capitalist system) be a very direct and easy way of gaining power, and that was all I was saying with that.


Second, your assumption about corporate purpose is demonstrably flawed. The root purposes underlying the existence of corporations can vary quite broadly. Profit is often one of the reasons they exist, but often it is not the only one, nor it is always the primary one. Here I will recommend a VERY good book that IMO everyone here and everyone in the nation should read: "Built To Last" by Collins and Porras. They do a superlative job of destroying several of the myths about corporations. I cannot recommend this work highly enough. Get it, read it, then read it again. Repeat until you have gotten the ideas clear in your thoughts.
I might consider that book if you can counter this logic:
Can a business thrive without creating a profit? If no, then the first priority must always be to create a profit.


This is nonsense. They are entitled to express themselves just as we are. The responsibility lies with each of us to determine whether what they advocate is meritorious. Your question betrays your (perhaps unintentional) desire to avoid being responsible for your own opinions. Major fail, so sorry.
And I agree with that (what is with the "major fail, so sorry" though? Can't you you to discuss something without resorting to childish rhetoric?) however, you have to admit that people aren't taking responsibility, so how will you force them? (and if you decide not to force them then you will inevitably end up with poor government).


Here you demonstrate that you have a very poor understanding of what a free market is. The USA is NOT a free market economy - not by a long shot. It is a rigged market economy where certain interests such as banking, hold positions of special privilege that enable them to exercise certain power to which they are not rightly entitled. Therefore, before you go posing such questions in a public forum, you ought to understand the concepts and the realities of those things after which you make your queries. What has been demonstrated here in the USA is that RIGGED market economies are non-viable as long term propositions precisely because the interests that succeed in positioning themselves in the ways you apparently find disagreeable end up destroying the opportunities for prosperity in favor of tectonic shifts toward fascism.

You need to learn what a real free market is before you can move forward. Free markets in nations where the people take a grim view of injustice are the vehicles of virtually unlimited potential for opportunities of individual prosperity. When the large business entities are regarded and handled in the right way, there is little to fear.
It's strange how you assume that I believe that the US has a free market system (something I absolutely don't), nowhere did I state that, I even went so far as to insert "talking from a strictly theoretical point of view" in my original post to avoid any unnecessary associations, but I guess you were too busy being arrogant to notice.


Hi ShadoD, and welcome to the forum.

The bottom line here is that some Person A is simply holding more in cash balances than some Person B deems appropriate. It is important then to ask: by what criteria did Person B make such a determination? At what point does holding money become holding too much money? $100? $1 billion? $100 trillion?

You have implied that you think holding cash in greater amounts than some yet undefined x is inherently wrong. Why is this? What is your x and why did you choose it?
Thanks for the welcome, I was starting to doubt if there was even one calm reasonable person in here.
I don't like the idea of "regulating" people's income and I don't think it's "wrong" if people have much more money than the rest, however, in a normal democratic republic it could be a problem if a single person or entity had (for example) 1.000.000x more money than the average person because that would allow this person to subvert people who have less, as well as anyone with influence (unless we create very special rules for those who have political power). And that is the problem.


Corporations are not free market entities. They are legal fictions created by legislation, and would not exist as they are currently structured in a free market system.
The problem is the concentration of power, not so much the method (although I agree that corporations as they are today are probably the worst we can come up with).
The same problem would arise if I as a single person was astronomically richer than the average person.


I like what Doug Weed (a libertarian and historian) once said on the matter. (In my own words...not as eloquent as Mr Weed). He was originally a ministerial student, and they would go to the college cafeteria fasting and ordering nothing but water to demonstrate for the hungry of the world. They felt superior over those who were choosing to eat.

Finally one day he realized his fasting helped not one hungry person. He also began to realize that as Americans partook of capitalism they spread wealth. For example originally refrigerators and TVs were very expensive, and out of reach for the average person. But as more people began to buy them the prices came down, and eventually even poor countries could afford them.

He went on with a speech that would bring tears to your eyes on how people in communist countries died trying to bring about what we take for granted here in the U.S. I wish I could recall the rest of the story, but I would not do it justice.
I absolutely agree (in theory). In reality though, you'll find the same problem as we see today in many poor countries; no government, no laws and the people getting either abused as underpaid slaves or completely ignored and thrown out of land and deprived of natural resources.
The free market would be great for them if businesses had morales and ethics.



:confused: You describe the problem we currently have with central planning controlled markets. Monopolies are protected by being granted favored status through regulations.

Laissez-faire free markets solve these problems.

A monopoly in laissez-faire free markets would have to be an exceptionally good company because the only way the company could maintain its monopoly status would be to provide high quality products at exceptional value.
You're not saying how it would solve the problem though. I absolutely agree that the system we have today only makes it much much worse, but I don't see how Laissez-faire free market mechanisms will eliminate the problem of powerful entities abusing their money/influence.


There is no, has been no, and never will be any free market. Markets are influenced by the limits we put on the individual and collectively. We should focus on selling common sense regulation that criminalizes fraud and selling alcohol to kids.
In principle I believe that you should be able to sell alcohol to kids (rather than having government stopping you), however I of course understand your point of view.
But if we allow regulations then the question becomes, how do we ensure that the regulations are in our best interest? And can they ever really be (with the known political systems)?


End the government CREATION of corporations. And end the government protection of ALL businesses. Establish that only human beings can own property or enter contracts. And let the market do what it will.
I think that is a very good idea actually. Only thing so far that might be able to (some extent) remedy the problem. However, you would still have the problem of getting the case into court, and that road could be blocked by corrupt politicians and judges.


That should have been the answer to the OP, (who posted 1 Troll post and never has responded)

That this has gone on is rather pathetic.
(8 pages, 70 posts, 1,198 views)
So you just dropped in to say that the thread was pathetic and that I'm a troll? Why, thank you for your input, now feel free to leave again (who is the troll again?).


Yep I look at anyone with a date of Aug 2010 or Sept 2010 as suspect. Quite a few lately.
You must have some pretty strange paranoid delusions if you think that people actually sign up exclusively to ruin the "community".


Uh oh, it’s the dreaded “one- post troll”. His kind are swarming this place. :rolleyes:
Yet another paranoid troll...


I don't think this is a "free market flaw" or with libertarian theory itself, but it is a problem of implementation that means (imho) that any attempted transition to libertarianism from our current system is probably doomed to failure.

The problem, as I see it, is a question of the order in which things are done. You can talk about stuff like eliminating taxes and business regulations, but this would be a disaster. The regulations and taxes we have are after-the-fact corrections to a corporate/government power structure that existed before they were needed.

e.g. "Just vote with your dollars" doesn't work. I've never bought anything at Goldman Sachs or Lockheed, but they're still getting my money.

To use an analogy, imagine that an unregulated free market is like a boat. The boat is doing just fine, until someone shoots a hole into the bottom of it. I then stick a cork into the hole, and the boat stops taking on water as quickly (but it would be better if the hole weren't there, obviously)

When the government started issuing all these corporate charters with the railroads, that was like shooting a hole in the boat. When the government started passing more and more corporate regulations, that was like sticking a cork in the hole that they made.

Removing the cork at this point is a bad idea, as is removing all the regulations on corporations. You need to remove them in the order that they were put in place, not in reverse..

In other words, the regulations we have today ARE necessary because of earlier government intervention in the economy.

Corporations are creations of the government, therefore allowing corporations to act unchecked is not allowing the free market to operate, it's actually allowing the government to act unchecked.

Sometimes, I think of myself as a "libertarian in liberal's clothing." I actually support economic policies that libertarians despise like punitive levels of progressive taxation, corporate regulation, etc. However, the reason I support them is because I believe they are necessary given the current underlying distortions that are already present in the market due to previous government intervention. Allowing corporations to keep all of their profits at this point is like allowing a bank robber to keep all the money he stole. Until the underlying distortions in the market (corporate personhood, public/private collusion, etc) are removed, removing the bandages will only make things worse.

What corporations do is essentially like telling a bank robber that no matter what happens during a robbery, the worst that will ever happen is he might be forced to give back some of the money. If the worst thing that could happen were having to give back some of the money I stole, I'd be robbing banks all day long.
What you say is true, but I don't think it tackles the problem that I was thinking of.



Okay, that was quite a reply, I'm glad I got that done. Now on to a more personal response:
I think it is shameful how bad some of you treat new people and different ideas. I have been to many forums and never have I encountered such a hostile tone from so many people.
The reason I didn't respond was that I wanted it to be a proper response, and since I have been busy the past few days I didn't have the time to sit down and get it done - that doesn't make me a "troll" or an "enemy", that just makes me a regular person with an actual life.
What's perhaps more amazing though, is that so few actually honestly and respectfully tried to respond to what I said.
I'm gonna respond further if people have anything meaningful to say, but I'm gonna disregard the paranoid trolls and once I'm done with this thread I definitely won't come back, nor will I recommend any Ron Paul supporter to join this forum.
 
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