[extropy-chat] Inheritance

[Mike Lorrey]

--- Robert Lindauer <robgobblin at aol.com> wrote:

> 
> Brent:
> 
> Could you post the source for these statistics along with the
> relevant definitions?  My books say otherwise.

What books are those? Chomsky's Revision of US History? The WWP
Handbook? I've posted several sources showing the data that 80-81% are
self made, while the 20% inherited wealthy also includes individuals
who had relatively small inheritances of rinky dink businesses that
they grew into much larger enterprises.

As an example, the McCaw brothers, like Ted Turner, inherited a single
cable television business. While Turner grew his cable business into a
television media empire that merged into the largest media
conglomerate, the McCaws used their meager assets to get in on the
ground floor of the cellphone frequency auctions, and grew over less
than a decade from owning a business worth 1-5 million into billionaire
status.

Now, a lot more people became millionaires besides the McCaw brothers
in their business. Cellular One made quite a number of their first
employees into millionaires, as did start-ups like Microsoft, Apple,
Google, Amazon, Monster, eBay, Lycos, Yahoo, etc. The fact that a
business inheritor or founder depends an immense amount on dozens of
early employees for their own success means that if they have profit
sharing or stock programs, those owning the business that grows
immensely bring along a lot of their employees into wealth as well.

The 60% figure applies to the percent of the general population who are
invested in the stock market, as well as the percent who own their own
homes (financed or not).

Now, I've heard a lot of Mr. Lindauers complaints about the banking
system 'enslaving' people. While this may be so with credit card debt,
nobody makes such people have credit cards. With respect to home
mortgages, at the interest rates paid today, there is no chance of such
lending being 'slavery'. 

While the Griffin argument that federal reserve related banks 'invent'
the money they lend you is generally accurate, it is more accurate to
say they lend you your own future earnings. Because it is impossible to
know exactly what your future earning potential is, there is risk
involved. You may get laid off, maimed, downsized, disabled, or become
an addict of some sort. You may go crazy in Vegas or max out your
credit cards at the Mall of America. You may get cancer or need an
organ replacement. You might get killed. These are all risks that the
bank is taking in lending you money and they have a right to demand
compensation for taking such risks, plus profit from the risk taking
they are assuming. They are betting that you will continue to earn a
good living in the future, while you are betting you won't. Every month
that you lose that bet, you pay the bank based on the odds they give
plus their vig.

That all being said, bank lending is, in sum, far more conducive to
making people more free in the end result by enabling them to live a
happier, more productive life in a higher standard of living than they
would otherwise be able to afford without the ability to borrow. 

One reason why more people are not able to buy their own home outright
when starting out in life is because people live longer so their
grandparents are far less likely to have kicked off by the time the
grandkids graduate college. Another reason is because inheritance taxes
tend to bite the most into the middle class people who do not prepare
their estates for their own deaths, leaving their wealth to the states
probate courts to parasitize off of, while the wealthy tend to prepare
wills, living revokable trusts, etc. to hold their property outside the
probate system and avoid many inheritance taxes.

Mike Lorrey
Vice-Chair, 2nd District, Libertarian Party of NH
"Necessity is the plea for every infringement of human freedom.
It is the argument of tyrants; it is the creed of slaves."
                                      -William Pitt (1759-1806) 
Blog: http://intlib.blogspot.com


		
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