Cornelius Vanderbilt

Missy Sullivan writes Lost Inheritance in the Wall Street Journal, 3/8/13

Excerpts:

THE VANDERBILTS

Where the $ came from: Shipping and Railroads

“Commodore” Cornelius Vanderbilt (1794-1877) amassed more than $100 billion (in today’s dollars). His early heirs went hog-wild building baronial estates like The Biltmore, a 250-room French-style chateau in North Carolina. But by 1973, according to one biographer, a reunion of 120 Vanderbilt descendants included not a single millionaire.

BARBARA WOOLWORTH HUTTON

Where the $ came from: Five-and-dime stores

The casual philanthropist and so-called “poor little rich girl” blew through as much as half a billion (in today’s dollars), splurging on art, jewelry (including historic pieces once belonging to Marie Antoinette) and seven husbands. She died nearly broke, with a reported net worth of just $3,500.

HKO

One of the most glaring distortions is the data in income and wealth distribution is the reference of categories instead of real people. Many of the actual individuals move from lower quintiles to higher quintiles and this is not reflected as an improvement in the lower quintiles. Likewise many of those in the highest quintiles fail to stay there, especially over generations.

Bernie Madoff fell greatly and took many wealthy people with him.  Wealth growth requires knowledge and moral discipline which often goes lacking when the original creator is gone.

Lottery winners often lose their fortunes because they did not possess the skills needed to make the money. It was only luck.  Wealth is much better managed by those that created it, even if they were aided by luck.

Wealth creation happens best when knowledge and power are combined.  When power without knowledge is allowed, as with our regulatory agencies and crony capitalists, the economy stagnates. Dozens of financial regulatory agencies proved inept in preventing the financial collapse because they lacked the knowledge of the industry though they had the power to regulate.

If redistribution of the wealth was a noble goal then we should sing the praises of Bernie Madoff.  But as well deserved as his fall from grace was, none of us were any the better as a result.

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