The burden of wealth

Money is a curse to those who haven't earned it, says Bill Bonner.

Well, I got one foot on the platformThe other foot on the trainI'm goin' back to New OrleansTo wear that ball and chain

- House of the Rising Sun

"It's true. Wealth is a burden", said a man from Australia. "And when you give it to your children, it's like putting a ball and chain on their legs."

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Everything was fine. All week, we had been discussing how to build a big ball of wealth and how to shackle it onto our children. Then, on Saturday night, after dinner, we were outside, laughing, singing, enjoying ourselves. And then the police showed up. With two paddy wagons.

Yes, dear reader, someone called the cops on us. We were just having a good time. Too good a time, a neighbour must have thought. But heck, you can't sing the House of the Rising Sun without making some noise.

Your editor had pulled out his guitar. He is not a good guitar player. But what he lacks in talent, he also lacks in singing ability. He makes up for it in decibels. Especially when he is accompanied by other dues-paying members of the top 1%.

It's hard to appreciate or sympathise with the problems of the rich. We didn't realise how much of a burden wealth was until we got some ourselves. Now, we see. You have to work hard or your whole family can sink under the weight of it.

"If you have enough money to help your children through life", said one attendee, "you also have enough money to ruin their lives". How not to ruin their lives was the focus of the get-together.

Many people think that the best thing to do with money is to give it away. That way, they believe, you don't ruin your children's lives with money they didn't earn. Instead, you ruin other people's children.

We have some sympathy for that view. Money you don't earn is always a danger. Better to let people you don't know take the risk. In this, if nothing else, government is helpful. If you are a resident of Baltimore, your top marginal tax rate on income is about 50%. The government takes half your money and corrodes lives all over the world with it.

It sends drones to blow up vegetarians in Pakistan. In Paris, the US embassy hogs parking places at the Place de la Concorde with their anti-terrorist barriers. And at home, the feds support bums, chisellers and zombies in every city, village and hamlet.That leaves you only 50% to ruin your own family.

"Look, you're not going to help your children build up their muscles by lifting weights for them", continued our Australian friend. "And you're not going to make them more independent, more resilient, more entrepreneurial, and stronger by making life easy for them."

Not even the Germans present quoted Nietzsche. But his remark "that which doesn't kill you, makes you stronger" must have been near their thoughts. Never forged in the furnace of necessity nor hammered by want and failure, their rich kids risked being selfish, shallow and weak.

Based on statistical evidence, rich people are particularly susceptible to drug abuse and suicide.

Based on observation, financial cushions make people soft and dumb. Like zombies. Neither oligarchs nor poligarchs (poor zombies, who enable the whole system by voting for whoever offers the biggest bribe) need to render genuine services for value received.They just have to manipulate the system that gives them their money.

Larry Summers, writing in Monday's Financial Times, describes how a crony democracy works: "In areas ranging from local zoning laws to intellectual property protection, from financial regulation to energy subsidies, public policy now bestows great fortunes on those whose primary skill is working the political system rather than producing great products and services."

Mr Summers did not mention the free money handed out by the Fed. That, too, corrupts the system. The insiders don't have to produce anything or provide any real service. They just have to figure out how to get their hands on the free money.

The risk of easy money is the same for rich and poor alike: instead of learning to give, they learn only how to take.The gendarmes parked their vans and came over to the party.

"Can't a man have a little fun anymore?" we asked.

"But monsieur, it's after midnight. People want to sleep."

"OK we'll call it a night."