# Guitar Center Going Bankrupt?



## Sunlit Omega (Oct 4, 2012)

Daily Kos: Bain Capital's "Guitar Center" going down fast

Did not even know that Bain capital had acquired guitar center. Should this actually be true I can't say that I'm sad to see the "Wal-Mart" of music go down. What are your thoughts on this?


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## Chickenhawk (Oct 4, 2012)

Good riddance.

Too bad they'll probably just reorganize and keep going.


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## Sephiroth952 (Oct 4, 2012)

Well ,y mother works for chase and is currently seeking employment within the company because she is being laid off, and my step dad works for guitar center. If people start getting fired to recoup losses or are just plain scraped my family will be in a pretty bad situation.


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## SpaceDock (Oct 4, 2012)

Hopefully next on the list will be clear channel. I hate how much these businesses have controlled the music world in the last few decades.


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## Chickenhawk (Oct 4, 2012)

Sephiroth952 said:


> Well ,y mother works for chase and is currently seeking employment within the company because she is being laid off, and my step dad works for guitar center. If people start getting fired to recoup losses or are just plain scraped my family will be in a pretty bad situation.



Sorry to hear about that, man.

Honestly, I don't see them closing their doors.


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## TemjinStrife (Oct 4, 2012)

My friends who work for Sam Ash would be happy. They don't much like the Guitar Center strategy of "set up a GC right across the street from a Sam Ash."

Also, Sam Ash is privately held by the founding family, which limits the amount of financial risk they can really take. GC's got a bit more leeway to play with debt.


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## Lagtastic (Oct 4, 2012)

Well, that sucks. They literally just opened a store 10 minutes away from me, I've enjoyed dropping in and trying out amps.


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## MikeH (Oct 4, 2012)

TemjinStrife said:


> My friends who work for Sam Ash would be happy. They don't much like the Guitar Center strategy of "set up a GC right across the street from a Sam Ash."



They did that as soon as Sam Ash bought out the Mars Music by me. They were probably 3 exits down. As soon as SA opened, GC made the move to the same outlet complex. Such a bullshit tactic. I never shop GC anyways.


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## flexkill (Oct 4, 2012)

Guitar Center bought out the Mars music in Nashville. haha.


This going out of business thing is not new news. They have been struggling with this for quite some time.


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## leftyguitarjoe (Oct 4, 2012)

I hope it dies. I do all my guitar music shopping at a little local place where I'm friends with all the employees and stuff. When I'm bored I just go there and chill.


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## Valennic (Oct 4, 2012)

Bittersweet thing really. Some of the guitar centers in the area have some monumentally amazing gear. If they go under, I'll really miss their used section too. Some seriously amazing deals happened there.


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## Sunlit Omega (Oct 4, 2012)

I don't know what to see really, it seems impossible that Guitar Center would be folding. I hate that employees work for commission, a music equipment store should not be run like a car dealership. I guess I'm indifferent since for everything I think is great about guitar center I can think of just as many bad things.


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## 7 Strings of Hate (Oct 4, 2012)

flexkill said:


> Guitar Center bought out the Mars music in Nashville. haha.
> 
> 
> This going out of business thing is not new news. They have been struggling with this for quite some time.



We had a mars music here in St.Louis and it was pretty sweet. It be dead naow.


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## op1e (Oct 4, 2012)

Sam Ash is layed out so much nicer in Ohio and has real gear to try out, not just isles and isles of cheap combos. Its just a pain cause its much further away in Mayfield and the opposite direction from home when I wanna hit sumn on the way outta work. Whenever I go to Microcenter I make sure I go around the block to them, however.


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## Onegunsolution (Oct 4, 2012)

TemjinStrife said:


> the Guitar Center strategy of "set up a GC right across the street from a Sam Ash."



FUCKING THIS!


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## iRaiseTheDead (Oct 4, 2012)

This is... interesting


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## poopyalligator (Oct 4, 2012)

SpaceDock said:


> Hopefully next on the list will be clear channel. I hate how much these businesses have controlled the music world in the last few decades.



This x1,000,000,000


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## TRENCHLORD (Oct 4, 2012)

I hope not honestly.
GC terre haute is the only place around here that keeps a good stock.
I don't go there often, but it's nice sometimes to swing by and check things out hands on.


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## kamello (Oct 4, 2012)

Used Gear GC prices.....oh shit, please no, Im gonna miss that 




(seriously, I can buy gear for 1/4 of the price in relation with Chile)


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## bob123 (Oct 4, 2012)

How the hell are they going out of business?!?! This sucks, because that means guitar prices will inevitably raise... some of you may not like GC, but they definitely have the volume to help keep prices low....


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## leonardo7 (Oct 4, 2012)

Everybody is either going custom or Rondo/Agile, plus Axe Fx cant be found at Guitar Center, so they aren't selling guitars, effects pedals and amps like they used to. Also, with the internet/ebay/craigslist theres way more places to buy stuff either used or they all price match. I could go on and on and really have no idea where it went wrong but thats where I would start.


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## Necris (Oct 5, 2012)

leonardo7 said:


> Almost everybody on this forum is either going custom or Rondo/Agile, plus Axe Fx cant be found at Guitar Center, so they aren't selling guitars, effects pedals and amps like they used to.



Fixed that for you.


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## Thrashmanzac (Oct 5, 2012)

sounds a lot like what has happend to Allans stores here. good riddance.


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## tacotiklah (Oct 5, 2012)

I doubt the lack of an AxeFx II would cause GC to go bankrupt. Perhaps people are tired of crap gear being pawned off on them as "slamming, crushing and brewtal". Just saying...


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## Thrashmanzac (Oct 5, 2012)

or perhaps people just don't appreciate pushy, judgmental salespeople 
again, this is going off my understanding that GC is similar to Allans


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## potatohead (Oct 5, 2012)

GC is just falling into the same trap that most big box stores are falling into. They just can't have that much overhead and that much inventory and stay price competitive. Most people will go online and save some money even if it means waiting a few days. I'd be pretty surprised to see these huge box stores like GC and Best Buy etc still around in 10 years.


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## flint757 (Oct 5, 2012)

I buy most of my stuff from Musicians friend which is owned by the same people as Guitar Center I think, so the company itself isn't going anywhere. The store fronts maybe though, avoiding sales tax is too nice.  

Local shops don't have the same things in stock regularly enough for me to frequent their stores and the prices are good online, haven't been in a guitar store in months.


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## WarriorOfMetal (Oct 5, 2012)

I have my doubts about GC going bankrupt...236 stores and growing.


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## FireInside (Oct 5, 2012)

I must be the only guy here that hopes they don't close their doors....

I have had some negative experiences with douchy sales people but I still enjoy going in there and shopping for gear. Although I honestly only make small purchases or buy used gear. This probably has a lot to do with why they aren't turning a profit.


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## glpg80 (Oct 5, 2012)

WarriorOfMetal said:


> I have my doubts about GC going bankrupt...236 stores and growing.



They owe fender millions. They have a loan that is about to expire soon and if they cannot come up with the needed sales to put a lean against to renew the contract you can guarantee they will have no choice but to start laying off jobs and closing doors.

This is not news - i was talking with church and a few others about this months ago in the chatroom. Even then i learned about it almost a year ago over on rigtalk. GC has had bad financial troubles in the past and things are not looking any better.


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## Aurochs34 (Oct 5, 2012)

flint757 said:


> Musicians friend is owned by the same people as Guitar Center I think, so the company itself isn't going anywhere. The store fronts maybe though, avoiding sales tax is too nice.



^^^ simple as this.


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## ShadowFactoryX (Oct 5, 2012)

ive gotten some outstanding deals from their used section
not a bad place to look for gear at all

i dont see them closing up though, if it comes down to it, another company will rescue them


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## flint757 (Oct 5, 2012)

I thought they would at some point simply because even I just go there to test things then go somewhere else where its cheaper. They don't give me any incentive to do otherwise either, I've only encountered assholes shopping there. Commission makes people unintentionally act like dill holes although I think they stopped that in some of the stores..


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## Jakke (Oct 5, 2012)

We see the same thing here with home electronics, they are killing each other. Goes to show something I have held to my heart for a long time, big box stores in areas like electronics and music are usually not sustainable. If we want more secure jobs and better selection, we might have to get used to paying a bit more


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## drgamble (Oct 5, 2012)

I chalk this up to a few things. Online sales, piracy in music, and a general downturn in kids playing instruments. Brick and mortar stores have a hard time competing with online stores that don't have the overhead that B&M stores have and can't compete with the 8-10% sales tax that is added to the price. I've noticed a general downturn in people learning how to play an instrument because the music that is and has been the most popular for years doesn't use real instruments(think rap, electronica, dance). The other part of this equation is piracy. Musicians make less money, so they have less money to invest on instruments. Many major studios have closed their doors because the budgets for recording artists aren't there anymore. The fact that less music is produced with real instruments mean people don't need great rooms with awesome mics and pres. I can't speak for everywhere in the country, but here in New Orleans, if you run a studio most of your money is made from rappers that bring in loops and just need to record vocals. Back to the piracy thing, piracy is eventually going to kill the entire industry. If something doesn't happen soon, we're just going to have a bunch of bedroom producers out there recording music. First the labels, then the major studios, and now the stores. Let's not forget that the economy as a whole is pretty much in the crapper so this is pretty much expected.


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## Randy (Oct 5, 2012)

7 Strings of Hate said:


> We had a mars music here in St.Louis and it was pretty sweet. It be dead naow.





MikeH said:


> They did that as soon as Sam Ash bought out the Mars Music by me.



Dude, Mars Music was the shit. They were the first 'big box' music store we got in the area and their store was beautifully laid out, they had a pretty diverse stock of new items, great used gear and (my favorite part) they used to hold events (guitarist's night out, drummer's night out, etc.) just about every week, which was great because it was free pizza, musician networking and usually a jam session all for free.

When they went under and Guitar Center moved in down the road, I remember going there the first time and it was like, a really cheap version of the Mars atmosphere.


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## Nonservium (Oct 5, 2012)

I miss Mars music. All the Mars here are now GC's. It lacks that same feel. Randy is pretty much spot on, it feels like a cheap imitation and it is. :-(


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## Valennic (Oct 5, 2012)

drgamble said:


> I chalk this up to a few things. Online sales, piracy in music, and a general downturn in kids playing instruments. Brick and mortar stores have a hard time competing with online stores that don't have the overhead that B&M stores have and can't compete with the 8-10% sales tax that is added to the price. I've noticed a general downturn in people learning how to play an instrument because the music that is and has been the most popular for years doesn't use real instruments(think rap, electronica, dance). The other part of this equation is piracy. Musicians make less money, so they have less money to invest on instruments. Many major studios have closed their doors because the budgets for recording artists aren't there anymore. The fact that less music is produced with real instruments mean people don't need great rooms with awesome mics and pres. I can't speak for everywhere in the country, but here in New Orleans, if you run a studio most of your money is made from rappers that bring in loops and just need to record vocals. Back to the piracy thing, piracy is eventually going to kill the entire industry. If something doesn't happen soon, we're just going to have a bunch of bedroom producers out there recording music. First the labels, then the major studios, and now the stores. Let's not forget that the economy as a whole is pretty much in the crapper so this is pretty much expected.



I'll just go ahead and say that piracy has absolutely nothing to do with what's happening to GC. I'm not sure if you're aware of this, but a lot of musicians who shop at GC don't have bands, don't have labels through which to sell their records, and most small time bands offer their shit up for free through soundcloud or bandcamp. And besides, I don't know of any small time bands anywhere who make enough selling records to actually buy anything with the money. That's just laughable man. They make their money off of shows and merch.

They don't have less money because of that, they have less money because the economy sucks. You said that bit yourself at the end, but that's the core cause of it. People just don't have the coin to drop on guitars like they did in the early 2000s.

That being said,I've seen that there's only more and more guitarists all the time. I work in a guitar shop, and I can't even tell you how many times we sell guitars or give lessons to kids who want to learn how to play. The guitar industry is growing, maybe its just time it got a facelift.


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## bob123 (Oct 5, 2012)

Oh this is delicious. I just found out mitt romney bought guitar center in 2008 lol


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## HeHasTheJazzHands (Oct 5, 2012)

I'm actually pretty bummed about this... Guitarcenter's used section had some pretty awesome deals.


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## SirMyghin (Oct 5, 2012)

Valennic said:


> I'll just go ahead and say that piracy has absolutely nothing to do with what's happening to GC. I'm not sure if you're aware of this, but a lot of musicians who shop at GC don't have bands, don't have labels through which to sell their records, and most small time bands offer their shit up for free through soundcloud or bandcamp. And besides, I don't know of any small time bands anywhere who make enough selling records to actually buy anything with the money. That's just laughable man. They make their money off of shows and merch.
> 
> They don't have less money because of that, they have less money because the economy sucks. You said that bit yourself at the end, but that's the core cause of it. People just don't have the coin to drop on guitars like they did in the early 2000s.
> 
> That being said,I've seen that there's only more and more guitarists all the time. I work in a guitar shop, and I can't even tell you how many times we sell guitars or give lessons to kids who want to learn how to play. The guitar industry is growing, maybe its just time it got a facelift.



I would say his reasoning is quite sound and a good representation of the trickle down effect. It would not represent the largest market share (which is probably guys with real jobs ) but it would likely represent a consistent one. If musicians had more money as income flowed in like it should, they would buy more gear. When people intercept that flow of income and leave a 'thanks' note if that however....


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## drgamble (Oct 5, 2012)

Valennic said:


> I'll just go ahead and say that piracy has absolutely nothing to do with what's happening to GC. I'm not sure if you're aware of this, but a lot of musicians who shop at GC don't have bands, don't have labels through which to sell their records, and most small time bands offer their shit up for free through soundcloud or bandcamp. And besides, I don't know of any small time bands anywhere who make enough selling records to actually buy anything with the money. That's just laughable man. They make their money off of shows and merch.
> 
> They don't have less money because of that, they have less money because the economy sucks. You said that bit yourself at the end, but that's the core cause of it. People just don't have the coin to drop on guitars like they did in the early 2000s.
> 
> That being said,I've seen that there's only more and more guitarists all the time. I work in a guitar shop, and I can't even tell you how many times we sell guitars or give lessons to kids who want to learn how to play. The guitar industry is growing, maybe its just time it got a facelift.




In the old days, all of my favorite bands had TONS of gear. These days guys carry a few guitars with them on tour. The real big acts may not have bought from a place like Guitar Center, but certainly the smaller bands especially in niche genres most certainly bought their gear from a local music shop. NOFX, Fugazi, Cannibal Corpse, Goatwhore, Crowbar, Napalm Death, etc are the guys that I am talking about. Sure, Jimmy Page, Steve Vai, Joe Walsh just to name a few probably don't walk into the local music shop and buy equipment, but there were several other guys that weren't as big going and buying their equipment from stores. When Guitar Center started as a matter of fact, guys like CC Deville and Mick Mars would go into Guitar Center Hollywood to buy guitars. These are guys who had 200+ guitars. I can't think of any artists these days that actually have collections like that unless they are from the old school days. I actually know a few guys from the bands I named above, and I can tell you that I didn't pull the whole piracy thing out of thin air. It is real. SirMyghin hit it on the head, it is part of the trickle down effect of unintended consequences.


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## Curt (Oct 5, 2012)

The GC closest to me seems to have near none of the types that seem to plague GC's everywhere else. Except for the guy at the desk who handed me the set of strings last time. "Those are really heavy strings man.(EB 12-54)" Me : "Well I do a lot of down tuning." he replies "10's should be fine for drop D." awkward silence after that.


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## All_¥our_Bass (Oct 6, 2012)

Personally I'm kind of sad, I have a local GC with some really nice folks in it nearby.

But I know that it's the exception rather than the rule and that overall the whole company stinks. It's just too bad that I won't have a convenient place to buy boss pedals and strings.


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## Eric Christian (Oct 6, 2012)

leonardo7 said:


> Everybody is either going custom or Rondo/Agile, plus Axe Fx cant be found at Guitar Center, so they aren't selling guitars, effects pedals and amps like they used to. Also, with the internet/ebay/craigslist theres way more places to buy stuff either used or they all price match. I could go on and on and really have no idea where it went wrong but thats where I would start.


 

That doesn't sound right. The general public typically buys either a Fender Strat or a Gibson Les Paul along with some random combo amp.

Also to the OP this is a re-post of old news from July and is factually incorrect. I posted a thread about this when it broke. http://www.sevenstring.org/forum/off-topic/205242-fender-guitar-center.html Every company buys inventory on credit. Guitar Center is no different. According to my sources basically none of the facts about the financial liquidity of Guitar Center were actually true. This story should have been retracted.


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## sggod89 (Oct 6, 2012)

> a crushing $1.56 billion debt burden that was incurred in late 2007 when Bain Capital acquired the business



This is what Bain does, it's really fucked up. They use the company as collateral to borrow large sums of money from banks to inflate their profits. GC will soon go out of business due the weight of all the debt.



Here's a nice quick video that explains what they do.


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## leonardo7 (Oct 6, 2012)

Eric Christian said:


> That doesn't sound right. The general public typically buys either a Fender Strat or a Gibson Les Paul along with some random combo amp.



But these days more and more are buying those things used on ebay, that along with what I said might have been the tiny percentage that kept the company afloat. I honestly have no idea. I enjoy going to GC just to look around but I havent actually bought anything from there in years. But I am still supporting them cause I buy things from Music 123 and Musicians Friend which are the same company as GC.


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## flint757 (Oct 6, 2012)

Honestly, they should just do showrooms, that will get rid of some of their overhead. For the most part that is how it works for me anyhow; I go there to look at stuff and if I like it I buy it elsewhere. Their prices are not in their favor even for a large store.


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## VBCheeseGrater (Oct 6, 2012)

That sucks, hopefully they'll pull through. I can't see how anyone would think one less guitar store close-by is a good thing (unless you own another store). The more the merrier as far as i'm concerned


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## KingAenarion (Oct 7, 2012)

In Australia, the Reason Allans Music is going under is because when they merged with Billy Hyde they also merged with their millions of dollars in debt.

Their revenue post costs/staff pay/repayments was something like $500k last year, which is not enough when you have to pay back millions.


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## ilyti (Oct 8, 2012)

WarriorOfMetal said:


> I have my doubts about GC going bankrupt...236 stores and growing.


 
Yes, really. And I think a lot of people missed this point in the OP's link:



> This morning, OHD sent me _*an e-mail of a post*_ that he saw on Space Coast _*Craig's List*_ for the *Port St. Lucie Guitar Center store*:


 
Seems legit..  

All it's even talking about is one store in one city.


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## flexkill (Dec 3, 2012)

sggod89 said:


> This is what Bain does, it's really fucked up. They use the company as collateral to borrow large sums of money from banks to inflate their profits. GC will soon go out of business due the weight of all the debt.
> 
> 
> 
> Here's a nice quick video that explains what they do.



This video pisses me off!


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## spadz93 (Dec 3, 2012)

TemjinStrife said:


> My friends who work for Sam Ash would be happy. They don't much like the Guitar Center strategy of "set up a GC right across the street from a Sam Ash."




looooool yeah they did that in my area, except there's a GC about a half mile down the road from a sam ash, and then another GC a few files up from the first GC. i would probably miss GC though, ive gotten all my guitars (with the exception of one) and my first 3 amps there


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## Stealthdjentstic (Dec 3, 2012)

^^Sorry, that guy is a moron. Not all private equity works in that way. What he did is like calling all cops dirty because of one bad apple. 

In fact, even Bain is not that bad at all. All you have to do is take a look at some of theor holdings. The capital gains thing is just doing something that every company in almost every sector does....use tax law to their advantage. Its not their fault the US has borderline retarded tax laws.


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## Jzbass25 (Dec 3, 2012)

Robert Reich is not a moron, but yeah his example is basically the worst possible case.

Also this thread made me realize I've only ever spent 10 bucks at guitar center in my entire life...


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## Stealthdjentstic (Dec 3, 2012)

Right...I dont know if youve read some of his stuff about zomg we need dem unionz but its pretty hilarious too.


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## Jzbass25 (Dec 3, 2012)

Unions aren't a bad idea, they just can't be too powerful. Everything is always a power struggle since people are generally assholes to each other lol. I don't read all of his stuff but from what I've ran into when doing research or assignments he seems to be a well educated economist, he just has some political bias (like many many people have). I try and keep my biases in check when looking at economic situations for sure. 

I'm not as educated as him though so I try not to judge too harshly, I only just finished an econ degree and I hope to get a masters while finishing up my engineering degree. So maybe I'll find some more things he said that I may disagree with in the future


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