Fu Bu Guo San Dai

... which, I am assured by reasonably reliable sources, is Chinese for "Wealth does not pass three generations."

Mish has a great post discussing Microsoft's Steve Ballmer's recent claims that this is a once-in-70-years sort of depression. He also excerpts from a MoneyWeek article (which I cannot access) that talks about fu bu guo san dai. Here's the concept.

The first generation, my parents, were children of the Depression. They worked like crazy and scrimped and saved all they could. They sent my generation, Baby Boomers, to good schools. (Some of us) worked hard and saved our money, but did so because we were taught to do this, not out of personal experience. Our peers did likewise, but none of us ever felt any real hardship. It was all very abstract.

The third generation simply blows the money. The Boomers do a poor job of passing on the traits of hard work and savings and by this time your peers are pretty affluent. Hard times are something you read about in text books. Saving is OK as far as it goes, but that new XBox game is pretty cool and it only costs $60 ...

I only partially agree with this point of view. I'd suggest instead that political correctness and multiculturalism have hidden examples of personal failure away from us. Our children don't learn about the failures that come from financial and personal self-gratification even though they may be just a few blocks away. Teachers dare not talk of the vast population of young, black men in prison except to mumble about racism. In the press, people falling behind on mortgages are victims and not spendthrift.

I suppose that moral relativism itself could be seen as a luxury born of living in the second and third generations and hence just another cause of the loss of wealth. Maybe fu bu guo san dai is right after all.