What's this? We first read the name Lang Hancock yesterday while researching the history of the Pilbara iron ore deposits. We opened up the Financial Review yesterday and read that Hancock's heirs are still fighting over a huge iron ore fortune. They are not, however, fighting amongst themselves.
From what we can gather, Hancock's children are fighting with the children of Hancock's boyhood friend and long-time business partner Peter Wright. The squabbling children are fighting over AU$4 billion worth of iron ore at the Rhodes Ridge iron ore tenement in the Pilbara.
Sigh. AU$4 billion is a lot of money. It might even be worth fighting over. But does it make you a little sad when children fight over the fortunes their parents have made? There must be some unofficial law of evolution that says family fortunes never last more than three generations.
A man makes his fortune. His son inherits it. But there's so much of it that not even a prodigal son can waste it all in one lifetime. By the time the third generation comes along, the family has a tradition of wealth. It thinks of itself as rich. But in reality, most of the capital has been frittered away in vanities and bad real estate deals. The third generation spends its time and energy trying to recover the past glory, of squabbling over the scraps and the trappings and trinkets of an antique fortune. That's how it was in our family, anyway.
By the way, we think you could apply this narrative to America as a whole and it would pretty much describe what's happening from a generational point of view. It's also a symbol of a certain loss of national vigour and imagination. The nation's wealth and capital stock were greatly increased after World War Two. The Boomers, born into affluence, took high standards of living as their American birthright. Then, they systematically spent, squandered, or diminished everything they had inherited.
It started with the Vietnam War, advanced to the Great Society, evolved into the War on Drugs, and lately has incarnated as the War on Terror. All of these projects were born out of the belief that without enough money and idealism, you can change anything. All these great social and political projects have depleted America's treasury.
Content with its impression of itself as rich and powerful, America stopped saving, too. This lack of saving has led to less real capital formation. Globalisation has ensured that many capital-intensive industries - the ones that create jobs and income - have migrated to China. The Boomers are left with inflated expectations and a nauseous kind of nostalgia for an un-recoverable past, where the Rolling Stones play "Satisfaction" in and endless loop and the climate never changes.
Incidentally, it's this nostalgia that we think foreigners find so off-putting about America. When Americans talk about greatness, they are always referring to something their parents or grandparents did, not something they plan on doing themselves. They are too busy paying homage to an image of America to actually go out and build an America their own kids could be proud of. It's a knee-jerk kind of pride that refers to someone else's accomplishments, not unlike a sports fan who claims a team's victory as his own.
We hope Australians don't fall into this dangerous pattern of confusing national greatness with government authority and military power. A nation is never really great. Only its people are. Politicians try to hijack the aspirations of a people for their own ends. This is why all politicians are to be treated with suspicion and scorn. And yes, even though we like Ron Paul, we think he's in the wrong business. No great political saviour is going to make you freer, richer, or smarter.
Dan Denning
The Daily Reckoning Australia
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 and has covered financial markets form Baltimore, Paris, London and, beginning in 2005 Melbourne. He’s the editor of The Daily Reckoning Australia and the Publisher of Port Phillip Publishing.
Comment by bill on 18 June 2007:
it is sad to see young people,high school graduates, come into my office who can not read or write well enough to fill out an employment application.
i suppose that is equality of a sort.
bill
Comment by courtney on 6 December 2010:
I'm an American and I find our materialism extremely off putting. Many in my age group, 25-35, have nearly given up not because we are lazy, but because nothing we do produces results for us...we've been working only to make a very, very small group of extremely wealthy people even wealthier. When we get a job, we work hard, 6 days a week, more than 8 hours a day, only to get a paycheck that barely covers the cost of an inexpensive apartment, food, heat/ac, and then all the surprise costs..such as doctor visits, car repairs (due to the horribe transportation system in most of america), and other things that add up.
In Texas you are eligible for health benefits after 3 months of employment, but don't fill out those forms too fast! Health insurance for yourself only is about a third of a paycheck..forget about everyone else in your family insurance costs would be more than your paycheck. Texas is an "at will" state, which means they can fire you from your job for absolutely no reason. So when you turn in your benefits form, the next day you might get fired because the company doesn't want to contribute anything to your insurance-even though most businesses now are large corporations and paying into your insurance would only affect their bottom line a little.
We have these banks that lend you money on the premise that you'll be making more money in the future, but you don't, so they take your house and auction it off, or it just sits there empty while you move in with family or friends if you are lucky.. now your credit is bad and you can't even rent an apartment and potential employers check your credit and if its bad, sorry you don't get the job.
College can even hurt your job prospects..now they hint that you are "overqualified". People that don't go to college because they didn't have the money, are underqualified.
How do you redistribute the wealth? How do you mobilize enough people to make change? A politician promises change, yet doesn't do ANYTHING. Elections are fake. What is the point of voting if both candidates bat for the same team?
Not every American is arrogant. Many of us hate the way the government/wealthy elite are taking us. We import nearly all of our goods, yet we can't fly on an airplane without being viewed naked.
But the government and money don't care because they have private planes. There are 2 america's. One that is above the law and the people that have to abide by these laws or else. The nation is almost enslaved. Many people are waking up and seeing it for what it really is. I did not ask for the U.S. to be the world police. I want to be left alone, I want to be able to provide for my family, i want to work, I don't want to feel like a lazy bum or a reject of society. I have potential but no one will look!
Comment by Biker on 6 December 2010:
Genuinely sorry to read of your plight, Courtney.
I believe I may know a young Australian currently living in Sydney who would jump at the chance to trade places with you. He believes Americans have it made... .
Seriously, if you can, travel. Many countries to your south will pay you a much fairer wage, while you're finding what it is you want. Western Australia, for example, needs people prepared to work hard. Best beaches in the world, with the best weather to enjoy them. Check it out.
Comment by Ned S on 6 December 2010:
"A politician promises change, yet doesn't do ANYTHING. Elections are fake. What is the point of voting if both candidates bat for the same team?"
Yep, I figured at the time, that Obama just meant more of the same too. But a Democrat friend of mine reckoned he'd be the duck's nuts. Good to see some Americans are starting to lose some of their illusions. Good luck with it all Courtney!