Pittsburgh Steelers linebacker James Harrison made headlines this past week for refusing to allow his children to keep participation trophies (http://www.nfl.com/news/story/0ap3000000510808/article/james-harrison-slams-participation-trophies). Say what you want about professional athletes and being paid as they do, but in his line of work you get paid only for performance and only get a trophy when you win. Mr. Harrison feels strongly that his children learn the difference between winning and losing and positive reinforcement of success, not mediocrity.
Jim Cramer, of CNBC, is in the news again representing a privileged group of people in our society who have lined children’s soccer fields for decades, derailing participation trophies themselves, “not what it was like when we were kids”, but who seem more than willing to collect lucrative “trophies” of their own in the form government guaranteed bank accounts, bond values and historic equity returns. Cramer’s most famous it’s-not-fair-mommy-the-market-is-dwopping-and-me-and-my-fwiends-are-going-to-wose-money rant of this magnitude was in 2008 when the Fed was not reacting fast enough to gamblers (Wall Street banks) cheap credit requests at the Fed discount window. His most recent fit (http://www.cnbc.com/2015/08/21/cramer-we-need-leadership-now.html?trknav=homestack:topnews:1) demands Janet Yellen save the stock market by declaring the FOMC will not raise the Fed Funds rate the .1% that was supposedly baked in to the cake (prior to this week, anyway). Don’t you know Janet? If the last thirty years has taught us anything; it’s that no matter what you invest in to, you are supposed to make money! In other words, don’t be a meanie! Everybody gets a participation twophy!
Are you kidding me? This is what the United States of America has come to? No losses are permitted? The government must step in and do something about the market dropping? This is nothing new, but continues to build to a point of absolute absurdity and is, and will continue to be, squarely embedded in future rates of return. So, let me get this straight, you want a return on your cash in the bank, and to be bailed out when banks fail? You do not want the value of your bonds to decline, but they should be insured against loss? And the stock markets must continue to climb skyward, as the central bank of the United States of America takes responsibility for readjusting the stop loss? If there is no risk, there is no return! The return on cash and many bonds are already zero and/or you even pay for safekeeping (and rightfully so). Under the current regime of participation trophies for everyone, equity returns eventually settle out to zero and all the stuff we learned about China being a communist country and the US a country of free market capitalists is completely and totally dismantled once and for all.
Oh, and, I don’t know if Jim caught the news this past week, but according to the Feds own published internal study, the last seven years of Fed intervention has not done squat to help the US economy (http://www.marketwatch.com/story/the-evidence-doesnt-back-bernanke-on-qe-st-louis-fed-paper-argues-2015-08-19). In other words, the “wealth effect” has not worked. Only increasing the wealth of 10% of a population and wiping out 90% produces no benefits. Go figure. So the Fed has already admitted failure, yet Cramer demands leadership from Janet Yellen!? Janet Yellen is NOT a leader, she is a follower. And, according to CNBC’s most celebrated stock market prognosticator (https://www.youtube.com/watch?v=XuKQECeiwok), the market will continue to climb unabated – awash in 3% plus economic growth. So, is this not another buying opportunity? Then, why the desperate plea to Janet for help? Something is not adding up here…
In any event, endless bubble gains in stocks, bonds and real estate, guaranteed pensions and Gen XY funded bionic hips, knees and boner medication. Having grown up and been coddled by government their entire lives, a very privileged club within the Baby Boomer generation has produced a large swath of 50 to 70-something year old participation trophy “winners”. Not every Baby Boomer is cut from this cloth, but an unfortunately large group are and Jim Cramer is their poster child. All I have to say is, Jim, buddy, man up! This isn’t a goddamn tee-ball game, and you don’t deserve a trophy! Booyah!
Update 9/29/2015: Looks like I’m not the only one that thinks this way: James Bullard CNBC take 2