Punished for “The Sins of the Fathers” - Really!?

Does Exodus 20:5 (“...visiting the iniquity of the fathers upon the children unto the third and fourth generation of them that hate me...”) teach that God punishes children for the sins of their predecessors? Was this young man’s life a punishment for his dad’s sin? If he is not being punished, what is the connection between his present circumstances and the life of his father? In a more general context; how do I relate this verse to the patterns I see in my own extended family—the undesirable family traits that we live with. Am I drowning in my own gene pool and doomed to relive the folly of previous generations, and my kids the folly of my generation?
The second commandment might seem a strange place to find the answer to these questions. In that commandment the Lord forbids idolatry—the use of idols, images and icons in worship. Attached to this commandment, however, there is both a warning and a promise. There is the threat of punishment (the “visitation” of God) for idolatry and the promise of mercy for those who love the Lord. We learn from this warning and the promise following, first, that guilt is transferred within a unit of mutual responsibility – you sin together, you are guilty together. Second, there are serious and lasting consequences to sin, (especially the sin of idolatry). Family legacy is a very powerful force and sin transferred to succeeding generations is often a burden too heavy to bear. Third, God punishes sin only in those children who persist in and condone the sins of their father’s. Fourth, the mercy promised shows that the gospel has the power to break the chains of a corrupt inheritance – where sin abounds grace did much more abound.