The Corrosive Effect of Free Money

‘I got one foot on the platform
The other is on the train
I’m going back to New Orleans
To wear that ball and chain’

House of the Rising Sun, The Animals

 

‘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.’

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 neighbor must have thought. But heck, you can’t sing 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%.

Government Destroys Lives

It’s hard to appreciate or sympathize with the problems of the rich. We didn’t realize 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 at our annual Bonner & Partners Family OfficeGlobal Partners’ Reunion in Courtomer, France.

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 peoples’ 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 spaces at the Place de la Concorde with their anti-terrorist barriers. And at home, the feds support bums, chiselers and zombies in every city, village and hamlet.

That leaves you with only 50% to ruin your own family.

How Crony Democracy Works…

‘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.’

None of the Germans present quoted Nietzsche. But his remark — ‘That which doesn’t kill us makes us 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.

Read the rest of this article at The Daily Reckoning