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In the mid- 1960's thru the 1970's, growing up in Detroit was wonderful. People had that good ole Midwestern attitude, "if you want something, you're going to have to work for it". Sounds fair to me.
In those days, baseball was big. As a kid I couldn't wait for the Little League application forms to be delivered to the schools in mid-March. In early April, the local Little League held tryouts for youngsters aspiring to make one of the leagues teams.
In Detroit, early April was still quite cold, and I remember the times when Little League tryouts were held in a parking lot because the baseball fields were still covered with snow. Boy, you had to love the game to tryout in 30 degree weather, and had to be tough to boot.
After the tryouts were over, the players that impressed the coaches were called that night informing them that they had been picked to be on a team. The players that did not do well were not called, and hence not chosen. Sounds like real life doesn't it?
In high school, it was the same drill. Go out for the baseball team, if you did well, a list was posted with your name on it that let you know you made the team. If your name was not on the list, you didn't make it. Once again, sounds like real life doesn't it?
Today, it’s quite different. Little League does not cut anymore, every player regardless of talent must play a set number of innings, so there is no incentive for people to work harder, and become better to achieve a goal. In short, people do not have to be accountable for what they may or may not do.
Psychologists argued that rejection at a young age would lead to some sort of dysfunction later in life. Don't cut, don't reject, because it may hurt a persons psyche. What a load of crap!
To prove that people cannot handle rejection anymore, all one has to do is watch the tryouts for "American Idol". This is a result of what Psychologists have done to our society since implementing the "no-cut, must play" rule in Little League. Another result is high school coaches being threatened or attacked by parents when their kid doesn't play.
Today, in the real world, real estate investors are being told, "don't worry about being held accountable for your mistakes, or irresponsible behavior with your money, we will help you out".
So what measures are being implemented to bailout real estate investors?
1) How about refinancing your ARM to a 40 or 50 year mortgage. Do you believe this? 40-50 year mortgages? Talk about a royal screw job!
2) Hillary Clinton believes that the Federal Housing Administration’s (FHA) mortgage insurance program should be available to who only qualify for sub prime mortgages.
This is the "new" Little League mentality of, "I realize you don't qualify, we will help you, even if you can't pay back the loan".
In the stock market, we are seeing those same anti-rejection measures being implemented as well. We have mentioned the activities of the Wall Street gang which includes the popular characters from Goldman Sachs in the Bush Administration.
Some other anti-rejection measures are;
1) Employment Numbers- while the unemployment rate is reported as 4.5 percent, they fail to mention that the US has become a service economy, and that our manufacturing base is evaporating while 3.2 million manufacturing jobs have been shipped overseas since 2000.
Yesterday I mention an article written by Charley Reese. Charley said, "The core problem with most American corporations is that they are viewed as simply cash cows to be milked." By shipping manufacturing jobs overseas, CEO's make the companies profits soar so they can exercise their stock options and enrich themselves. Longer term, people that lose jobs in manufacturing will have to take lower paying jobs. They will be able to shop at Wal-Mart, but won't have the money to buy $75 polo shirts because they can't afford it.
Why would a CEO care? He gets his wealth and then retires to Palm Beach.
2) Consumer Debt- today the Commerce Department said personal incomes fell by 0.1 percent in April, while consumer spending rose 0.5 percent.
Is there any wonder why President Bush signed into law a new bankruptcy bill that will make it harder for consumers to get out of paying their debts? Why was the new bankruptcy bill signed into law? Because credit card companies realized that people were not being held accountable for what they do.
Now where did people develop this kind of attitude? I can tell you that some of it started in Little League.
Of course, I am not blaming Little League, but you have to admit it is a good example. Eventually, all of the things I listed above will be reflected in the stock market. I just don’t know if it will be 2007, 2008, or beyond.
