Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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New topic 2015-07-22 16:02:02 description

Retirees: CHAPTER NINE

Retirees are the main readers of newspapers and periodicals, so it is not surprising to find the media full of stories about the retired elderly. What seems underestimated in all this discussion, is the plain fact that civilization has never experienced such an expansion of more or less healthy longevity, ever or anywhere. We dare not rely on tradition or our own experience, because there is none. Whatever will old folks do without Medicare? Or, when the money runs out, without Social Security, defined benefits pensions, nursing homes or retirement villages (CCRC). Are ya gonna need me, are ya gonna feed me, when I'm a hundred twenty?

The point to quoting the Beatles song of the sixties, is their punch line of "sixty-five" has become "hundred-twenty" in less than a generation. For a while, President Bush thought the depletion of Social Security would be the first snowflake in a blizzard, but now we have forgotten that particular misjudgment, and find that paying for Medicare is going to seem a problem, first. The problem is not one or the other, the problem is longevity. The impossible dream has become very possible, and we don't know what to do with it.

It seems to me, one thing is very clear: we cannot expect to work for forty years but live an additional fifty years being supported. It is childish to suppose someone else (the millionaires and billionaires, our parents and grandparents, or the taxpayers) will support us for 20% longer than we support others, or that on average we can do it for ourselves. Earning interest on savings will help the present problem, and I have here contributed some suggestions about it. But in the long run, the long run will win. So if there is any solution possible for this longevity problem, it must lie in most people remaining gainfully employed, at least ten years longer than we now think is reasonable.

Any further extensions of longevity will have to be paid for by working still longer. In the meantime, we must save and invest more wisely, at whatever cost to the retail financial industry. I have scarcely ever met a stock broker I didn't like, and it pains me to ask the retail brokers to do what the medical profession is committed to doing: do our job so well, we put ourselves out of business. The financiers stand astride the information pool, from which a solution to this problem would be expected to arise, and they resist the idea they are fiduciaries. That's got to stop, not because an occasional account is being churned, but because they are the logical people to devise a solution to society's current big problem. Ordinarily, you wouldn't expect doctors to solve a financial problem, you would expect financiers to do it. Maybe college professors of economics would stop crabbing so much, and help with the theoretical problems of finance; but generally speaking one would expect the solution to financial problems to arise from the financial community. Where are the customers' yachts?

The problems financiers need to help us with, are not so much the sharing of profits generated by efficiency, either. Looking further ahead, it worries me to have so large a proportion of common voting stock in the hands of people who, although the owners all right, are not in the least interested in voting their stock. As the proportion of voting stock shrinks in the hands of those who know something about the company they own, the welfare of the company is not necessarily improved. The way family-controlled corporations outperform public-controlled ones by 15-25% is maybe a signal we are making things worse. And furthermore, if essentially unlimited amounts of money pour into the stock market, the value of money is lessened, the value of stock is temporarily increased, and we suddenly wake up to realize by going off the gold standard we have not replaced it with anything else. The resulting temptation to print bitcoins or paper without value, seems ominous. What is proposed we do about it, if Argentina or similar public servants somewhere else, start printing money? I am not comfortable letting Mr. Putin decide such questions, but if he tries it, what are our plans?

 

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