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Duke, Georgetown suspend retirement contributions for a year
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quo vadis Offline
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Duke, Georgetown suspend retirement contributions for a year
These are big boy schools of course. Each is facing a deficit of more than $50 million next year.

And if you think suspending retirement contributions is a small thing, its huge. That money compunds so will never be made up for.

I personally would rather my school cut my direct pay rather than my retirement contribtution.

https://www.pionline.com/defined-contrib...tributions
(This post was last modified: 05-17-2020 12:41 PM by quo vadis.)
05-17-2020 12:40 PM
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bill dazzle Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
My brother teaches full-time at Vanderbilt (his role will be changing thanks to the virus) and my ex-girlfriend (and still wonderful friend) is leaving her full-time position with the university (after a 17-year run) and taking a very nice buyout. I also do a good bit of reporting on Vanderbilt for my journalism job.

VU is "loaded" compared to 99 percent of American universities. And, yet, I can assure you all ... Vanderbilt is hurting.

This is not a game, folks.
05-17-2020 12:48 PM
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quo vadis Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-17-2020 12:48 PM)bill dazzle Wrote:  My brother teaches full-time at Vanderbilt (his role will be changing thanks to the virus) and my ex-girlfriend (and still wonderful friend) is leaving her full-time position with the university (after a 17-year run) and taking a very nice buyout. I also do a good bit of reporting on Vanderbilt for my journalism job.

VU is "loaded" compared to 99 percent of American universities. And, yet, I can assure you all ... Vanderbilt is hurting.

This is not a game, folks.

We have seen some very top-level schools make drastic moves. That's scary.
05-17-2020 01:38 PM
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Statefan Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-17-2020 01:38 PM)quo vadis Wrote:  
(05-17-2020 12:48 PM)bill dazzle Wrote:  My brother teaches full-time at Vanderbilt (his role will be changing thanks to the virus) and my ex-girlfriend (and still wonderful friend) is leaving her full-time position with the university (after a 17-year run) and taking a very nice buyout. I also do a good bit of reporting on Vanderbilt for my journalism job.

VU is "loaded" compared to 99 percent of American universities. And, yet, I can assure you all ... Vanderbilt is hurting.

This is not a game, folks.

We have seen some very top-level schools make drastic moves. That's scary.

Duke does not need to do what they are doing but they have to do something like this to avoiding becoming a political target in the coming months and next few years. You will see a similar move in their Health Care System. The odds are that we are in Depression and are suffering deflation come election day. Large entities could lose a great deal of their carefully cultivated political support in November.
(This post was last modified: 05-17-2020 03:16 PM by Statefan.)
05-17-2020 03:13 PM
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-17-2020 12:40 PM)quo vadis Wrote:  These are big boy schools of course. Each is facing a deficit of more than $50 million next year.

And if you think suspending retirement contributions is a small thing, its huge. That money compunds so will never be made up for.

I personally would rather my school cut my direct pay rather than my retirement contribtution.

https://www.pionline.com/defined-contrib...tributions

Every school and industry is going to feel the squeeze. So I like to view these things as a sliding scale and spectrum “what hurts the least to most”.

Losing a retirement contribution stinks, but you don’t ever see it while working. You still have a job and if this helps preserve employment, then fine. Same thing with freezing raises.

Reducing salaries hurts more, but you can still work.

Layoffs hurt the most. Complete loss of income.

Closure of programs or shuttering of school. Loss of industry, loss of employment for many more individuals.
05-17-2020 03:57 PM
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Wedge Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-17-2020 12:40 PM)quo vadis Wrote:  These are big boy schools of course. Each is facing a deficit of more than $50 million next year.

Hospitals and "health care systems" are getting absolutely hammered in the pandemic economy. Because Duke and Georgetown are in the health-care business as well as the education business, they are getting hit on that front in addition to the other ways in which universities are getting pinched.
05-17-2020 04:09 PM
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quo vadis Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-17-2020 04:09 PM)Wedge Wrote:  
(05-17-2020 12:40 PM)quo vadis Wrote:  These are big boy schools of course. Each is facing a deficit of more than $50 million next year.

Hospitals and "health care systems" are getting absolutely hammered in the pandemic economy. Because Duke and Georgetown are in the health-care business as well as the education business, they are getting hit on that front in addition to the other ways in which universities are getting pinched.

Yes, we've seen that schools with big medical facilities, like these and Michigan, are getting hammered the worst. Hospitals were rushed into transforming into nearly total-Covid environments in anticipation of massive floods of patients that never came, they have lost tremendous income from other services as a result.
05-17-2020 07:00 PM
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bill dazzle Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-17-2020 04:09 PM)Wedge Wrote:  
(05-17-2020 12:40 PM)quo vadis Wrote:  These are big boy schools of course. Each is facing a deficit of more than $50 million next year.

Hospitals and "health care systems" are getting absolutely hammered in the pandemic economy. Because Duke and Georgetown are in the health-care business as well as the education business, they are getting hit on that front in addition to the other ways in which universities are getting pinched.


Agree on this. And it is why I am glad (at least overall) that Vanderbilt University and Vanderbilt University Medical Center "split" (i.e., separated legally and financially) in April 2016.
05-17-2020 08:53 PM
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The Cutter of Bish Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
Given the kind of roles, operations, and politics within a school and its medical arm, I wonder what gets pinched the most. And that you may have collective bargaining arrangements that can further complicate matters.

There are some folks who literally have nothing to do right now because they were service-facing in their physical locations, and right now, may be the most protected given their membership to certain bargaining units. Meanwhile, you have others without such protections and could still be doing research and service, and those are the ones I suspect are most vulnerable. I remember reading Princeton’s statements about merit increase and hiring freezes, and it sounded like a boom yet nothing at all (like, faculty were still seeing raises for promotion purposes but also for an under-defined “retention” purpose).

I’m coming around to the sentiment that states can no longer serve “two masters,” and, to me, that’s the education front. This was a “gotcha” moment for education and its skills and infrastructural readiness. Can’t help but feel that if both primary/secondary schools and higher ed come to the table for help, states need to have some “come to Jesus” talks with colleges and universities who were already hurting. The local public K-12’s really need the help more. Seeing elite private universities having to make cuts...this stuff is getting very real, and we’re going to need some more mature and complex thought to plan accordingly.
(This post was last modified: 05-18-2020 06:05 AM by The Cutter of Bish.)
05-18-2020 06:01 AM
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ken d Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
Higher education in America was already on the brink of a major restructuring even before COVID-19. Closings, mergers and reduced course/degree offerings were going to escalate sharply over the next decade or so. This pandemic has only accelerated the timetable for this trend. Ironically, it also gives schools and states political cover to do what they knew they needed to anyway.

The challenge will be for our economy to find ways to adjust to a new reality in which many students will be entering the workforce sooner. Nationally, we may need to rethink our strategic needs. The idea that we didn't have the manufacturing capability in place to quickly produce something as simple as protective masks and gloves is scary. How many other strategically important items are no longer manufactured in America? Maybe we need to accept some higher prices to be sure we aren't at the mercy of a potential adversary like China. I'm not sure America has the collective will to do that.
05-18-2020 08:04 AM
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-18-2020 08:04 AM)ken d Wrote:  Higher education in America was already on the brink of a major restructuring even before COVID-19. Closings, mergers and reduced course/degree offerings were going to escalate sharply over the next decade or so. This pandemic has only accelerated the timetable for this trend. Ironically, it also gives schools and states political cover to do what they knew they needed to anyway.

I'm not so sure about that. I think the main impact might be technological. The ZOOM eruption, along with faculty being forced to teach online this spring and summer (at least) might be a game-changer in terms of a lot of schools that had resisted putting programs online now doing so.

It's kind of like my shopping habits - for years, I've browsed through stores like Walmart and Target, but the past two months I've been using the "pickup" service. I now see that as a permanent thing for me even when CV19 ends and I never would have tried it had I not been forced to.

Sure, there are going to be closures and shutdowns but I expect more of this at the private level than public level. I think the same political pressures that have stopped public restructuring in the past at the *system* level will likely still be in effect.

We shall see.
05-18-2020 09:12 AM
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-18-2020 09:12 AM)quo vadis Wrote:  
(05-18-2020 08:04 AM)ken d Wrote:  Higher education in America was already on the brink of a major restructuring even before COVID-19. Closings, mergers and reduced course/degree offerings were going to escalate sharply over the next decade or so. This pandemic has only accelerated the timetable for this trend. Ironically, it also gives schools and states political cover to do what they knew they needed to anyway.

I'm not so sure about that. I think the main impact might be technological. The ZOOM eruption, along with faculty being forced to teach online this spring and summer (at least) might be a game-changer in terms of a lot of schools that had resisted putting programs online now doing so.

It's kind of like my shopping habits - for years, I've browsed through stores like Walmart and Target, but the past two months I've been using the "pickup" service. I now see that as a permanent thing for me even when CV19 ends and I never would have tried it had I not been forced to.

Sure, there are going to be closures and shutdowns but I expect more of this at the private level than public level. I think the same political pressures that have stopped public restructuring in the past at the *system* level will likely still be in effect.

We shall see.

I can see what ken D is saying where, for several years before the pandemic, you were seeing a "high/low" bifurcation in higher education where the top private universities and public flagship/flagship-equivalent universities were still gaining or at least retaining enrollment on the high end and low cost MOOCs have been growing rapidly on the low end. Meanwhile, the middle-to-lower tier private schools and directional public schools have been getting hammered for the past several years. The pandemic didn't start that process, but it's definitely accelerating it where schools that might have held on despite declining enrollments for another 10 or 20 years could get eliminated immediately.

You could apply this to plenty of industries. Retail is a perfect example. The pandemic didn't start the collapse of many in-person retail stores, but it might very well accelerate and finish what Amazon, Target and Wal-Mart started several years ago.

On a tangent, where I do think the pandemic may start a fundamental shift in the economy that we didn't really see before this happened is with commercial real estate. It's ironic that many of the companies that were actually the *least* open to remote working prior to the pandemic were the top Silicon Valley tech companies that actually make remote working possible, such as Google and Apple. Their company cultures were very wedded to the idea of "accidental creative encounters" that occur in face-to-face interactions at physical office spaces (almost always with a huge open floor plan). For the past few years, those tech companies have been fueling commercial real estate expansions across the county *outside* of the Bay Area - Manhattan, Seattle, Los Angeles, Chicago, Denver, Nashville, Austin, Northern Virginia, Pittsburgh, etc.

The pandemic completely forced all of those companies to work remotely... and they realized that it didn't impact productivity (and in many ways made their employees happier and more productive). Workplaces that were even more wedded to the concept of in-person face time at the office, such as investment banks and law firms, have had to adapt, as well, and realized that it didn't change their productivity, either. If anything, the willingness to work more hours is increased if employees aren't adding a commute on top of it.

Financial companies and law firms take up big chunks of commercial real estate in virtually every major city, while tech companies have been fueling real estate expansion in many markets. All of those companies are looking at their bottom lines and are almost universally asking, "Why am I paying for all of this expensive real estate when our employees are working from home, they actually like it, AND it's cheaper for us for them to just stay there?" With revenue and profits down for virtually all but a handful of companies in society right now, committing a ton of fixed expenses to commercial real estate that they've found isn't really necessary is going to be as attractive in the minds of corporate America as it was just 3 months ago.

That's not to say that companies don't need headquarters and other office spaces. However, the idea that *everyone* needs to physically come to the office every single day is something that this pandemic definitely has totally upended. So, I do believe that how and where we work is going to be fundamentally changed going forward.
(This post was last modified: 05-18-2020 10:45 AM by Frank the Tank.)
05-18-2020 10:43 AM
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-17-2020 12:40 PM)quo vadis Wrote:  These are big boy schools of course. Each is facing a deficit of more than $50 million next year.

And if you think suspending retirement contributions is a small thing, its huge. That money compunds so will never be made up for.

I personally would rather my school cut my direct pay rather than my retirement contribtution.

https://www.pionline.com/defined-contrib...tributions

Presumably this is a defined contribution 403(b)?

If it is a defined benefit, there is no difference over the long run. Just that the position of the plan isn't as good.
05-18-2020 11:25 AM
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quo vadis Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-18-2020 11:25 AM)bullet Wrote:  
(05-17-2020 12:40 PM)quo vadis Wrote:  These are big boy schools of course. Each is facing a deficit of more than $50 million next year.

And if you think suspending retirement contributions is a small thing, its huge. That money compunds so will never be made up for.

I personally would rather my school cut my direct pay rather than my retirement contribtution.

https://www.pionline.com/defined-contrib...tributions

Presumably this is a defined contribution 403(b)?

If it is a defined benefit, there is no difference over the long run. Just that the position of the plan isn't as good.

Yes, 403(b).

I'm feeling slightly lucky these days. I just hit 25 years at my school, and I remember when i was hired in 1995 I was 29 and had zero interest in retirement plans. I had a choice between a traditional pension plan or a 403(b) - type plan, and I chose "neither". But HR told me state law said I had to choose one and so resentfully and without much thinking about it I chose the traditional plan.

That's seemingly turned out to be a good choice. A colleague who was hired at the same time and has earned the same salaries took the 403(b) and we crunched the numbers and my monthly benefit right now would be significantly more than his. Oh well.
(This post was last modified: 05-18-2020 01:50 PM by quo vadis.)
05-18-2020 01:48 PM
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RE: Duke, Georgetown suspend retirement contributions for a year
Drove by the local mall the other day and told my daughter that they may not get back into it depending how long this thing stretches out. It was already hurting, and folks might want nothing more to do with the contact/proximity risk.

I get it that some institutions/businesses won’t survive, but I’m going to have to see it to believe it on the public school front. Private schools open and shutter all the time because of exceeding or outliving their need or mission. But the public schools carry that political burden that prop up their perceived need and value. States have to get out of this business a bit, or recognize that their creations evolved and grew, and that the weak need to be shut down.
05-18-2020 01:57 PM
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Frank the Tank Offline
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-18-2020 01:57 PM)The Cutter of Bish Wrote:  Drove by the local mall the other day and told my daughter that they may not get back into it depending how long this thing stretches out. It was already hurting, and folks might want nothing more to do with the contact/proximity risk.

I get it that some institutions/businesses won’t survive, but I’m going to have to see it to believe it on the public school front. Private schools open and shutter all the time because of exceeding or outliving their need or mission. But the public schools carry that political burden that prop up their perceived need and value. States have to get out of this business a bit, or recognize that their creations evolved and grew, and that the weak need to be shut down.
My local mall (and this is one in a fairly nice area) has, in a period of less than a year *before* the pandemic, lost 2 of its 4 anchor stores (Sears and Carson Pirie Scott). It's now in severe danger of losing a 3rd anchor store (J.C. Penney) and we can't necessarily count on the 4th anchor store (Macy's) staying around if that company continues down its financial path, either. Granted, our town has developed a very nice downtown area (e.g. Apple Store, Pottery Barn, multiple bookstores, etc.) that has taken business away from the mall over recent years, but it's still unbelievable how much the mall has declined so quickly (and once again, this is upper middle class suburbia).

Separately, I do agree that shutting down a public university is an entirely different political animal compared to shutting down a private university. This isn't even a right/left thing - any politician that represents a city/county/region that has a public university is going to fight closing down that school.

On that front, what you have suggested about states getting out of the university business is impossible from an image standpoint (even if it might be the right thing to do in the long run). Putting aside the students, there are too many university employees and too many towns (both large and small) that depend upon universities continuing to function.

That being said, you could argue that many states have certainly reduced their exposure to the university business with how much funding that they have cut. Schools like Michigan, Virginia and Illinois are effectively only public universities in name only with how much they have to get funding on their own.
(This post was last modified: 05-18-2020 03:55 PM by Frank the Tank.)
05-18-2020 03:49 PM
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-18-2020 08:04 AM)ken d Wrote:  Higher education in America was already on the brink of a major restructuring even before COVID-19. Closings, mergers and reduced course/degree offerings were going to escalate sharply over the next decade or so. This pandemic has only accelerated the timetable for this trend. Ironically, it also gives schools and states political cover to do what they knew they needed to anyway.

The challenge will be for our economy to find ways to adjust to a new reality in which many students will be entering the workforce sooner. Nationally, we may need to rethink our strategic needs. The idea that we didn't have the manufacturing capability in place to quickly produce something as simple as protective masks and gloves is scary. How many other strategically important items are no longer manufactured in America? Maybe we need to accept some higher prices to be sure we aren't at the mercy of a potential adversary like China. I'm not sure America has the collective will to do that.

Let's lay blame where it is due shall we. We outsourced everything in the name of global trade to just take advantage of nations with no minimum wage, no retirement systems, and cheap child and female labor. It will cost more to bring it home, but it should. We had the higher standard of living than just about anyone at one time because we were self sufficient and our economy was inflated by what was provided in the work place, but that also sustained the consumer end of the equation. We may buy more cheaply now, but the quality has been lacking for quite some time. I miss American textiles! The clothes lasted longer, were better made, and fit my typically American physique.

The issue here Ken D. is that we either manufacture all of our defense parts and equipment, all of our medical supplies and pharmaceuticals, and all things needed to meet standards of weight tolerance for infrastructure within these United States, or we are doomed. If the U.S. had been dependent on these goods coming from overseas in 1940 our children would be wearing a lot of brown and speaking German. To entrust your potential adversary with your pharmaceuticals is patently insane on so many levels that it boggles the mind, and yet that is what we do.

I've been advised by one friend in position to know that we could face shortages on maintenance drugs by the Fall due to the frosty nature of relations with a country which may have attacked us, and at the very least did nothing for 30 days while a deadly virus spread to Europe and he U.S.

But we can't blame our politicians alone here. It is the myopic quarterly statement focused Wall Street report generated Corporate approach to everything that has created it. I'm all about free trade and a pro business stance, but at some point what's good for the nation has to come first. And that my friend is what must change to make us a bit more secure.

The next shoe to drop is pension investment in Chinese companies that are nothing more than a front for Chinese military projects. The Washington Post did a fine, and uncharacteristically non pro China piece on this in the past week. One major Wall Street Pension Fund manager is 70% overexposed in these kinds stocks. They estimated that 1.2 million Americans could lose their pensions over this and that it could be far worse than the Mortgage Derivative scandal of '07-08.

We'll see.
05-18-2020 06:19 PM
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RE: Duke, Georgetown suspend retirement contributions for a year
Georgetown: "the immediate impact of the first weeks of the crisis required approximately $25 million in immediate unbudgeted spending. As we look at the impact of three additional months—April, May, and June—and include additional costs and lost summer auxiliary revenue, we expect an operating loss of at least $50 million as we look to begin the Fall term."

https://president.georgetown.edu/financi...-may-2020/
05-18-2020 06:43 PM
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-18-2020 03:49 PM)Frank the Tank Wrote:  On that front, what you have suggested about states getting out of the university business is impossible from an image standpoint (even if it might be the right thing to do in the long run). Putting aside the students, there are too many university employees and too many towns (both large and small) that depend upon universities continuing to function.

I don’t disagree, but I believe the perception of unpopularity and political suicide is a bit overstated, too. But, how would we know? Who’s shutting down a four-year public college or university these days?
05-18-2020 11:05 PM
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RE: Duke, Georgetown suspend retirement contributions for a year
(05-18-2020 08:04 AM)ken d Wrote:  Higher education in America was already on the brink of a major restructuring even before COVID-19. Closings, mergers and reduced course/degree offerings were going to escalate sharply over the next decade or so. This pandemic has only accelerated the timetable for this trend. Ironically, it also gives schools and states political cover to do what they knew they needed to anyway.

The challenge will be for our economy to find ways to adjust to a new reality in which many students will be entering the workforce sooner. Nationally, we may need to rethink our strategic needs. The idea that we didn't have the manufacturing capability in place to quickly produce something as simple as protective masks and gloves is scary. How many other strategically important items are no longer manufactured in America? Maybe we need to accept some higher prices to be sure we aren't at the mercy of a potential adversary like China. I'm not sure America has the collective will to do that.

That sounds really good, but who is going to pay for the increased costs in this country? As you noted "I'm not sure America has the collective will to do that." I don't think we do, either.

As someone who worked in the healthcare supply chain for over thirty years, my job was to keep supply costs as low as possible. There was about a 25 year period where supply costs were constantly falling, because everything was moving out of the country. Reimbursement for all health care services has been under downward pressure for several years, so we had to reduce costs to survive. Most hospitals struggle financially. So if we bring back medical manufacturing to the U.S., there are going to be significant increases in healthcare costs under the current healthcare system we have, which is already the most expensive in the world. That is why I doubt this will happen.

Duke University Health will be just fine. The Duke Endowment can help if needed. They gave the Health system a $50 million dollar grant last year:
https://today.duke.edu/2019/03/duke-rece...c-research

The smaller hospital groups and independent community hospitals are going to get killed in this crisis. Rural hospitals will really get hit hard. They already have been taking a beating for years and many are just barely hanging on.
05-19-2020 02:11 PM
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