Where's The American Dream Gone?

There was a time when people referred to the "American Dream." The dream was that if you worked hard and smart, that you could become something better than you were. Immigrants flooded our borders hoping to jump on the capitalism bandwagon and make something of themselves.

What's interesting is that they have. In fact, a study by Johns Hopkins in 2001 found that even when considering Caucasian European immigrants against native-born Caucasian American's (in order to remove any racial prejudice from the numbers,) immigrants generally had greater than a 35% better net worth.

As an employer, entrepreneur and father, the average work ethic in the US seriously concerns me. I have to say we have an exceptionally good batch of employees right now, but when we were located in Alabama, finding good employees was exceptionally hard. Several people seemed to feel entitled to work 5 hours a day, and then spend 3 of those browsing the Internet or chatting with other employees. Unfortunately I didn't just have a bad batch, it was something I saw over and over. If you had to let someone go due to lack of work ethic, suddenly they threatened you with a lawsuit (one even went to arbitration.)

Unfortunately we are reaping the rewards of our "rewards without work" mentality as a nation, both at the high end and the low end of the spectrum. From the high end we have the current banking crisis. Notice I didn't call it the mortgage crisis, because it's progressed so far from being about just mortgages. On the low end we have poverty and unemployment.

The latest iteration of the banking / mortgage crisis appears to be banks that refuse to take over property they should be foreclosing on. Now rather than take on your bad debt and compound that loss with maintaining disintegrating property, banks are just running away, leaving the property legally in the control of the original purchaser.

This is really is a symptom of several deeper problems. On the one hand we have a lot of single family homes that are in the less desirable neighborhoods of big cities. Those houses really aren't going anywhere, and the neighborhoods are generally occupied by low earning ethnic families. In many cases, these are people who literally have nowhere else to go - they live through a combination of odd jobs and government assistance, and as I've seen with my own eyes many times add to their income by dealing drugs.

Does that sound harsh? It should. Is it a stereotype? Perhaps, but it's also somewhat statistically accurate.

One symptom is that property values decline sharply in those neighborhoods. Housing costs have been climbing exponentially for decades - growing considerably faster than income. Now we're seeing a reset of that as well, in addition to the already declining property values in the less desirable neighborhoods. What we're left with is banks that are guaranteed to lose large sums of money when they clean up the mess of someone who bought a house with an adjustable rate mortgage for more than they ever should have paid and suddenly can't afford to keep it in this economy. Both the banks and the borrower lose. This is another symptom of the short-term get rich quick greed that affects both the affluent and the poor alike.

Those properties then fall into disrepair, continuing to devalue until the city condemns them. A year ago you could have counted on a "flipper" to come along and buy that property, putting a few thousand into upgrades and selling it to a first-time homeowner or to an investor looking for a good rental property. Now, the first-time homeowner just lost his job and the investor knows that finding a tenant who can continue to pay rent is a thing of the past, so she doesn't buy it either. So, the cycle continues.

I believe I've lived the American Dream. I've been on welfare, food stamps and assistance programs before. My first house cost me $27,500 and when I sold, it was in one of those declining neighborhoods. If it wasn't for that $250 PMI mortgage payment, we wouldn't have survived as well as we did - you couldn't rent government assisted housing for that little.

What set me apart from my neighbors? Determination. Work ethic. Self improvement. Staying away from dugs and alcohol. A sincere desire to work hard and become something else.

Without a work ethic, this country will never bounce back. Every time I hear the acid in someone's voice when they talk about sticking it to the man, taxing the banking executives and demanding their part from the government, it makes me think of those same employees with bad work ethic who wanted to "get the man" by suing when they really got fired for laziness.

Today's mantra has become "Where's my bailout?" The next generation's wealthy is guaranteed to still be those people who's attitude was "I make my own bailout."