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I don't think the point was "staff are untouchable and others are free to be harassed." It's more of a public warning that staff, like other members, will not be attacked and are justified with any punishment agreed upon (by the staff) for such harassment. Often members bring up the concern that staff members might be biased when banning somebody for insults against them [the staff], but this is certainly not the case, as the staff are just as much members as anybody else. If you find that you are being harassed or insulted and nobody is reacting, then the solution is to report it. Yes, it's not a democracy nor do members have the power to control things, but that is the nature of Loki's forum, and it is not a right to exist here as it is in the real world, but a privilege. Now if Loki disagrees with a decision by the staff, he expresses it, and tells them to change it, and in his absence he places somebody in charge to act in his place. So there is, indeed, a hierarchy in authority and moderators/admins are not only subjected to this hierarchy but also decisions by their peers. Often it ends up similar to how a jury works, in which we all [staff] agree on one decision of guilt or innocence and the guidelines to the punishment are given.
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