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RE: In the U.S. what is happening to the middle class?
Meh... it was that whole "Little Johnny mustn't be made to feel bad about not running as fast as the other kids, so let's give him a medal simply for 'running' so he doesn't feel left out," thing.
Of course, it devalues true talent/ability, and meanwhile "Little Johnny" knows perfectly well that he didn't really "win" anything. But now he has been trained that he can "get something" without really putting much effort into life... and meanwhile those who excel also regress towards the mean because "why bother TRYING" when you get a prize, regardless.
I don't remember that happening until the 2000s when my kids were in school. I never got medals or knew people who did in the 70s and 80s for competing and not winning.
Might be it was more prevalent in Europe where I grew up.