The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
Philadelphia Reflections is a history of the area around Philadelphia, PA
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
One of the Wall Street's better maxims advises: Never let your competitors smell blood. Talking too much injures honorable firms because in business there is usually a vulnerable moment before opportunities can be consolidated, or miscalculations corrected. Innovation by trial and error is progress. Transparency, humbug.
Black Hole
This prevailing wisdom can lead to mysteries where informed professionals puzzle through dramatic events, yet after six months remain unsure how bad things really are. When the subprime credit crisis began in August 2007, the average size and total number of outstanding mortgages was approximated, and from that it appeared impossible for overall losses to exceed $90 billion. Six months later, write-offs at least that large had been declared, but estimated future losses then ranged around $600 billion, give or take $300 billion. But wait, in a zero-sum game, winners must match losers so the economy as a whole should remain unchanged. Even if winners and losers are in different nations, the result would at worst be a weakening of one currency and strengthening of the other; after which world-wide wealth would remain unchanged. Real worldwide losses in a crash related to whether wealth is created or destroyed, not whether it has been transferred from one firm to another. As an aside, the supply-side viewpoint is that taxes effectively remove wealth from the private sector for protracted periods and therefore are equivalent to dropping into a black hole; but liberals mostly dispute this, so it is not discussed here.
One of the indisputable ways to expand or contract wealth is, unexpectedly, through a change in prevailing interest rates. When interest rates rise or fall, the value of debt or bonds goes in the opposite direction. So, when derivatives or other efficiencies lower interest rates, wealth is created. When realism, panic -- or fear of inflation -- cause interest rates to rise, wealth gets destroyed. What matters most to individuals is whether they own bonds during the time when interest rates are changing. No one necessarily gets any richer; in an inflation, bondholders lose money because money truly disappears.
So recently, spreads widened, or the risk premium returned to historic levels, or subprime mortgages got more expensive, or six other ways of saying the same thing: interest rates went up, value was destroyed. Anyone holding a certain kind of bond lost money, may not be able to pay his bills, so don't lend to him. Because the problem was large and worldwide, no one could be sure who was holding the bag, transactions stopped, the credit market "froze up". Some very prominent firms soon declared losses of $5-10 billion each, so anyone might be an unsafe counterparty. Even if time passed and other firms did not declare losses, general distrust persisted, for a complex reason having to do with mark-to-market.
A Wall Street broker is required to readjust his portfolio worth to market prices, every day. Active traders, trying to keep as little inventory as possible, constantly face the possibility of imbalances, temporary cash shortages, which would make them unable to pay bills even though they had spent nothing. Therefore, when interest rates go up, Wall Street investment firms lose a lot of money on the underlying bonds in their hands and must declare so publicly. Firms hate it because it could well trigger margin calls from their lenders. If no shares are traded, however, the price of the shares appears to retain the price of the last trade. That's what is often meant by markets "freezing up"; if no one registers a sale at a lower price, it can't be meaningfully "marked to market." Banks, by stark contrast, are allowed to play by different rules. When the value of their bonds or other securities goes down, the accounting rules permit them to declare the bonds are a long-term investment, where they do not need to be marked to market. Investment banks thus must declare huge losses when they haven't sold anything, while commercial banks may hold exactly the same portfolio and declare no loss at all. Whether this disparity is wise or unwise, is entirely beside the present point. The disparity confounds the general inability to say who is in trouble, thus whether the economy is in dire straits or just experiencing a state of confusion. At the least, it makes banks appear to be solid and solvent, while other investment institutions may appear to be in worse trouble. Aside from investors losing money by making wrong choices, there is a political risk in an election year that Congress or regulators could make wrong choices. A reckless young French trader happened to underline this risk, quite pointedly.
America was having a bank holiday on Martin Luther King's birthday, so American financial markets were closed but European markets were open. While American traders sat helplessly at home watching the news, European stock markets abruptly collapsed on heavy selling. Federal Reserve Chairman Bernanke promptly dropped short-term interest rates by seventy-five basis points (0.75%) between meetings of his board, creating a panic situation the next morning. It seems in retrospect that he had not been informed that a rogue trader at a prominent French bank had obligated that bank for $75 billion of unauthorized positions, which bank authorities promptly liquidated at a $7 billion loss soon after they discovered it. The newsmedia concentrated on the racy story of a French scalawag, but there was a more important story. Because of bewildering financial convulsions whose full dimensions may not be known for another year, Ben Bernanke the financially best-informed person in the World got into a panic and made a choice he might not have made if he had the full facts. If that was the case, poor intergovernment communication unnecessarily gave us a dose of inflation to contend with. Or, perhaps Bernanke got a needed wake-up call that the economy risks getting tangled up for several years from banks trying to ride out their bond portfolios to maturity instead of making loans. Refusing to acknowledge losses is what gave Japan a recession which is now in its fifteenth year. Try this nightmare: if the American consumer quits buying imported goods, Japan then China could collapse with consequences beyond conjecture. It is impossible to imagine Congress restraining itself in such a mess, and nearly impossible to imagine their getting it right when they do act.
As if to illustrate the point, the Carlyle Capital collapse in March 2008 demonstrated how violently markets can now be roiled by even a small quirk in the banking system when huge volumes of money are propelled through it, by ultra-fast computers before the rest of the financial world wakes up. A prudent banker would normally make a loan for appreciably less than the value of the collateral. Depending on the historical volatility of the collateral, it might be reasonable to lend 80%. But Carlyle was an investment fund, selling shares to the public worth several hundred million dollars. Borrowing $20 billion from banks, especially Deutchebank, Carlyle bought mortgage-backed securities. Before things collapsed, Carlyle had bought $21 billion of real estate loans but had received only a twentieth of that in payments from investors. The market price of the secutities thus only had to fall by 3% before the whole structure became insolvent. In the conventional 80% collateral example, a 3% decline would still have left it with a 17% cushion. Extreme leverage of this new ultra-fast sort would probably never have been considered by the German bank if it related directly to mortgages without a complicated middle-man. Whether anyone at the German bank realized this transaction was substantially the same thing at 20 times the risk is presently unknown, but it seems doubtful. The fact that at a relatively quiet moment DB suddenly called back its loan suggests that someone at the bank finally did wake up and ordered an end to the arrangement. Congress can now pass a law forbidding such structures if it wishes, but that will be mere grandstanding. Future textbooks of banking practice will surely all riducule the absurdity of this transaction. The risk of it nearly vanishes however at the moment of widespread recognition for what it is. Far worse would be for Congress to pass pious laws which essentially say that nothing innovative must ever happen for the first time, or that banks must stop using high-speed computers.
We must not conclude this little history lesson without stressing its basic point. When huge amounts of money seemed to disappear from the system, the only explanation available was that interest rates had suddenly gone up, resulting in existing bond prices going down. If so, central banking chairmen could make money re-appear by forcing interest rates down and holding them down. Conceivably, some other explanation for the vanishing money might more precise. But even so, forcing interest rates down ought to make money re-appear. This very simple description of events has been characterized as a "revival of Keynes-ism" , although most of us were accustomed to other descriptions of what Keynes attempted in the depression of the '30s. Nevertheless, it accurately capsulizes what Ben Bernanke about did in this one.
The Divine Right of Kings is not of much use anymore, even to kings. Nevertheless, it reflects a need to define the final authority, the final word, and therefore creeps into the legal system in various ways, even within a pure democracy. Aside from these traces in the most fundamental of laws, a democracy defines the ultimate leader by the slogan, "The Buck stops here." Late at night, pondering his decisions alone, the highest ruler of the State is apt to feel that all his responsibilities are burdens without compensating divine rights. That's not entirely true. He may use his discretion to bend or break the law in the public interest. But if it fails, he may never get a second chance.
John Marshall
Start with the example of Euclidian Geometry, where each step is a tightly proven consequence of other steps until you get 'way back to basic fundamentals, called axioms. Axioms are assumptions which have to be made without any proof. The axioms are probably true, but they have to be taken on faith, with the frank acknowledgment that if the axioms are changed, everything dependent on them must also change. The ancient philosophers mostly fell back on God to be the source of axioms, but in modern times it is more customary to rely on "Nature" as the source. During the Eighteenth century Enlightenment period, the "deists" fell back on "Nature's Creator" as a way of saying God without exactly saying it. The deists thus were able to say they believed in God, but only to the extent that He wound up the clock which now runs by itself. If you frankly haven't any idea where these axioms came from, you attribute them to one or the other of these concepts and go on with practical business. Just to take no chances on leaving a gap, a populace which universally believed in God was told that the King was the sole confidante, the sole agent, of God. As things evolved, the King had a divine right which extended to political matters, and the Priesthood was the local authority about matters of morals and spiritual consequence. As priesthood declined in popularity among protestants, Judges assumed the role of deciding "difficult questions", sometimes delegating the role to juries. Kings when they are little princes often get the idea that they are entitled to be capricious, otherwise what good is it to be King? This attitude is sometimes not discouraged when it relates to castles and fancy cars, maybe even to girlfriends. But if it is carried too far there is a danger that arbitrary capricious decisions may seem like a habit, carried over to issues the population has reserved to decide in other ways. When the king does it anyway, he is called an absolute monarch, not always a term of praise, and sometimes the first stage of incipient revolt. Nevertheless, there are inescapably some decisions which must be made, right or wrong, and somebody must make them and take the consequences.
George Washington
When American Independence was declared, but much more when the Constitution was ratified, it was the first time the former colonists were confronted with living in a system where every citizen was considered equal and sovereign, and nobody else was a contender. A representative Republic provided the practical means for collective expression, and for forty or fifty years the public nursed their fantasy of Every Man a King. Politicians were however soon nibbling at the margins, and the practicalities of running the country did require certain practical concessions. The unexpected growth of the population, from one representative for 30,000 inhabitants to the present 600,000 inhabitants confronted America with a choice it never seemed to accept: a Congressman with 600,000 constituents can never remain in touch with their wishes. But a Congress with 6000 debaters cannot function, either. We have outgrown the original model, but have been unable to devise a satisfactory modification. The sovereignty of the people under such circumstances is much more limited, and the need for arbitrary decisions by the elected monarchs increases. All that remains of control rests in the periodic elections. And the realities of those elections are grim. Political parties dominate the nomination step. Gerrymandering concentrates domination of proportional representation into "safe seats" which permit party control of a majority of the representatives. Incumbency, instead of simply augmenting experience, leads to the electoral power of "name recognition" which all too often is recognition of the name of some relative of the actual candidate. The cost of campaigning among such large population groups greatly magnifies its concentration in parties or interest groups. And the social distance between voter and candidate reaches the point where voters are more easily deceived, by a mountebank. The talent of getting elected has decreasing relation to the talent of governing. Something will be done about these problems, but not necessarily very soon, or very adequately.
So we are reverting back toward sovereignty remote from the people, slowly and only partially we hope. Some of the features of remote sovereignty persist for that reason. We are forced to concede the decisions about atom bombs to the President, about the assassination of terrorists to the security agencies, the currency to the Chairman of the Federal Reserve, and the containment of epidemics to the CDC in Georgia. We delegate such authority to hierarchy in millions of daily ways. A guard was asked whether he would shoot a fellow citizen who was protesting something. His grim answer was, "I will shoot anyone the Sergeant tells me to shoot." It isn't a completely satisfying situation, but it is a variation of what John Marshall called "due process of law". We attempt to limit local discretion by organizing rules for every contingency which would require individual discretion, thus minimizing the chance of a capricious decision. The paradox is that most of this rule by regulation was promoted by the political party of Thomas Jefferson, who was our first experiment in making an instinctive anarchist into our leader. The responsibilities of office made Jefferson retreat in many ways, but it was his cousin John Marshall who knew him intimately and applied the brakes. Marshall, Ellsworth, and Story shared a vision of what the legal system could be, helped ease it into that posture, and then laid out a system of behavior which was at its root, "Honesty is the best policy", the theme of George Washington's Second Inaugural address. Marshall was an absolute ruler of the legal profession and was not above bending its rules to his design. He thought he knew what the Constitution was meant to be, and was determined to make the Judiciary enforce it. What was most distinctive was his insinuation of those principles into daily life, the culture of the nation. After the last vestige of the Federalist political party had disappeared, he intentionally made the American culture a Federalist culture, while seemingly confining his writ to the Federal Judiciary.
We have already discussed how relatively easy it would be to anticipate the average medical costs of everyone's last year of life, put the money into a securely locked piggy bank, and gather interest to help pay for that dreadful last year in the same way whole life insurance pays for funeral costs. One hard part is to keep Congress from dipping into the lockbox, or the Federal Reserve from robbing its real value by allowing inflation. However, if protecting the Lifetime Escrow can be presented as financing everyone's health into old age, the public might well rally to it. Any agitation necessary to defend the piggy bank might by itself be a boon to reminding the public what is at stake for them. By comparison, generating the funds might actually be the easy part.
But what about the first year of life, whose expenses have already been spent? (The term is loosely applied here to include pregnancy and post-partuum, plus pediatrics). The concepts are introduced of pre-funding terminal care, paying off the debts of getting born, and current-funding the long healthy stretch through most of life. The proposal is to merge it all after transition steps taking decades, fully recognizing that some people will have to pay twice for having been born, and some will never pay for having to die. Indeed, in any insurance plan, there is some unfairness in order to remove risk. First, get the terminal care fund established and funded, showing benefits in the first year or two as proof of the concept. Then, start collecting additional contributions to the terminal care fund for the moral debt each citizen has for his early childhood costs, and do it for perhaps ten years. Add this money to the terminal care fund, but make its finances as visible as if they were separate. Meanwhile, keep chipping away at the maternity and childhood costs of litigation. The first chip is to recognize that malpractice costs are disproportionately concentrated in this group, so the fund would greatly benefit from tort reform. Vaccine costs are also strongly influenced by liability costs. One subordinate goal is to present the cost of childhood as partly a score-card on progress in tort reform, broadly defined, ultimately rallying the public to restrain itself in the jury box. The mechanism would be to dramatize the disproportionate concentration of these costs by local and national aggregation, letting the news media speculate on the variation.
Finally, it should be said the Health Savings Accounts are a vastly more flexible way of paying for health care than using the service benefits approach, at a time of great flux in the system. These accounts are described in greater detail in subsequent sections, but the main advantage at this point is to translate fund transfers into money without service benefit attachments, to make unification and substitution more plausible.
To some degree, service benefits are in conflict with indemnity benefits, in a manner resembling the conflict between debt and equity in the banking sphere. The best one can hope for is to shift the location of the interface between service benefits and indemnity, bringing the friction out into public view, and equalizing the power of contending sponsors. Therefore, the best place to present the issues is to regard DRG diagnosis groups as service benefit subsets, and outpatient costs as aggregated indemnity. But one of the main mistakes of the DRG system was to extend it to every hospitalized inpatient. This is particularly important in situations where the diagnosis has no relationship to a particular length of stay or average cost level. Inpatient psychiatry should be paid for as if it were an outpatient service, and chronic diseases such as Alzheimer's disease should be excluded from DRG as well. Emergency room visits should also be separated into two groups, depending on whether the patient is subsequently admitted to the hospital.
We started by saying these issues should be chipped away, during the period when more pressing issues are being addressed head-on. The first and last years of life are disproportionately expensive, so they need special attention to cost reductions. But the list of other small issues is a long one, providing ample opportunity for trade-offs within ambiguous opportunities. The main goal of these new proposals is to redirect cost-shifting perceptions from something to escape if possible, into a vision of advancing sensible provision for your own risks at a different age. The notion of generating investment income is not a small part of the notion of prudent behavior.
After this short treat, of a long-term vision, we now return to more practical short-term proposals. The heart of them is the Health Savings Account, but several preliminary features must be explained in advance.
That's the good side of C-HSA. What continued to bother me was it was close to providing lifetime healthcare financing, but without much latitude. Perhaps it would be better to settle for half, or a quarter, which would certainly have plenty of latitude for revenue shortfalls. Better still, perhaps a way could be found to phase it in, but stop when it runs low on money. Because it contained so many little pleasant surprises, however, I decided to press onward to see if others could be found.
Whole-life insurance is more profitable than term insurance, but it requires more capital.
What emerged were these new ideas:
1. Multi-year policies. To go from a term-insurance model to a whole-life model, using the life insurance approach. This would take advantage of the uptick of the yield curve in compound interest discovered by Aristotle long ago, inflecting at about the forty year mark. And advances in science would provide some extra years of longevity, to take advantage of it.
2. Escrowed Sub-Accounts. Instead of one big balance, it became apparent that some funds were intended for long-term use, and were therefore entitled to different interest rates ( checking account, savings account, investment account), which the account manager would wish to have locked for a given time or purpose (66th birthday, ten-year certain, $10,000 minimum, etc.).
3. No age limitations. Further longevity could be introduced by making HSA a lifetime compounding experience, cradle to grave, but how to fund it remains an issue concentrated on the life alternatives facing those, age 21-66.
4. Birth and death insurance, catastrophic, disability, etc. Exploring the idea of HSA from birth, I came to realize the extra cost of the first year of life was a serious impediment to all pre-funded health schemes, since one can scarcely expect a newborn child to finance a debt of 3% of lifetime costs, in advance. To make matters worse, the same is even true of the 8% of lifetime costs up to age 21. Thinking that one over, I came to see why nobody had ever devised a really adequate scheme for lifetime coverage. Seen in that light, it became clear the consequences justified solutions which might upset ancient viewpoints about a vital and sensitive subject. Whether recent turmoil (about same-sex marriage, unmarried mothers and the like,) would soften resistance or harden it, was just a guess. The result of this thinking was birth-and-death insurance, covering only the first and last years of life. Furthermore, it became easier to contemplate the issue of perpetuities, or inheritance from grandparent to grandchild. The laws already sanction inheritance to 21 years after the birth of the last living descendant, generally adequate for the purposes in mind here. All such special-needs insurance tends to reduce the remaining liability of general-purpose insurance, and typically is not workable unless the two insurers coordinate with each other and keep adequate records of their compacts.
5. Passive Investing and Dis-intermediation.The whole concept of "passive" index investing was borrowed from John Bogle of Vanguard and Burton Malkiel of Princeton. Recent difficulties in the fixed-income market make stocks seem just as safe as bonds to more people, and generally they provide more yield. The historical asset tables of Roger Ibottson of Yale inspired further confidence in the approach. Having absorbed this lesson, the concept of replacing an advisor with a safe deposit box emerged, although custodial accounts are not expensive. This maneuver could shift the "black swan" risk from the agent to the investor, assuming the agent has not shifted it, already. Ownership of common stock may not be entirely perpetual, but partial ownership of an index fund containing a trillion dollars worth of common stocks, certainly does seem perpetual enough for ordinary purposes.
6. Zero-balance protection devices. The potential that someone might figure out a way to game this system had to be considered, in view of the staggering magnitude of this proposed funding system if it caught on. The brake which suggested itself was to force the balances to return to zero at least once in a time period, and possibly many times oftener, if necessary. Offhand, I do not see how this system could be gamed, so the power to impose zero balances at a trigger level of balance, is a credible threat if it impends.
7. Total-market Index funds as a currency standard. One throw-away idea emerges from this analysis. The world economy went off the gold standard some years ago, and since then has adjusted its currency by inflation targeting. In the recent credit crash, however, the Federal Reserve has been unable to reach the 2% goal for some time, for unknown reasons. If the reason for this remains unclear, or if the reason is unsatisfactory, it seems to me the total market index of the nation's common stock would be a superior proxy for re-basing the currency on the national economy. If other nations copied this standard, their central banks could agree on a system of leveraging it between currencies, but the essential fact would remain that each nation's currency was a proxy related to its national economy, ultimately based on the marketplace. That might even restore matters to where they stood before 1913, when the Federal Reserve was created. This certainly would be superior to what some people accuse the Federal Reserve of plotting (expunging our considerable debt to the Chinese by inflating our currency.) As people say, this matter is above my pay grade, but it certainly would have the advantage of stabilizing the medical system, and ultimately the retirement system. The need for protection against bit-coins might be kept in mind. If it prevented entitlements from off-the-books accounting, I would consider index funds as a currency standard, a considerable advance.
The addition of some or all of the above seven or eight features would provide more than enough extra money to fund the entire medical system until such time as it was forced, by scientific advances, to become a retirement fund with a small medical component. We have the rough estimate of $350,000 average lifetime medical cost, but no way at all of judging the average retirement cost, so this concept will have to terminate in fifty years or so, or when the data catches up with the theory. After all, the limit of desirable retirement income is not infinite for everybody, but it is obvious it is infinite for some people.
This synopsis of the additional concepts for Health Savings Accounts concentrates on paying for healthcare with a cash cushion in reserve, so it does not dwell on technicalities, favorable or unfavorable. It does however skip over one theoretical issue of some importance: where does this money come from? Linked to that is the wry observation that it proposes to reduce medical costs by spending gambling money from the stock market. Since people who would say that, show no reluctance to hurt my feelings, let me make a forceful reply.
The designers of the Medicare program in 1965 faced a huge transition problem, too, and nevertheless, plunged ahead in spite of badly underestimated future costs. So, although revenue surfaced in the HSA proposal had been there all along, it was never gathered and put to use -- wasted, let us quietly say. I do not blame Wilbur Cohen or Bill Kissick for making concessions to get it started. There is little else they could do from 1965 to 1975 except adopt a "pay as you go" strategy. But sometime after 1975 that was no longer the case, and the new opportunity was neglected in a befuddled realization that costs were going to escalate rapidly, although hidden from sight. A great many free-loaders were added during the transition, and there was little to do except wait for them to die. So, yes, things were allowed to get worse than they needed to get, but as a nation we happened to be even luckier than we deserved to be, as scientists eliminated dozens of diseases we might have had to pay for. Until the end of that race between costs and revenues had come into sight, it was not possible to guess which one would win.
So now it is our turn to make proposals. We must face similar daunting problems of transition by a partially paid-up constituency, headed into a fully-expanded set of benefits for at least thirty years. Plus a huge and undeclared national debt from borrowing to pay for previous mistakes. I have tried to be generous in my assessment of the 1965 achievement, which was considerable. Let us see whether the opposition party can bring itself to respond generously and without intransigence, however vigorously they may subject the issue to adversary process. It doesn't mean to be a punishment, it means to be a rescue.
The price of borrowed money includes a provision to pay for defaults on the loan. That is, the interest rate demanded includes a default provision assessed by the banker against what he thinks is the risk of bankruptcy. Since he wouldn't make the loan if he thought the risk was high, he insures a little more accuracy by assigning a general rate of risk for the class of debtor. But what of the creditor who wouldn't suffer much, no matter what the risk of default? Or who ignores the risk of default because he sees very little? That man would have no interest in supporting loans, except to obtain an adequate rate of return; a pure investor, who has the money and is looking for a place to earn a return. If you don't give him a fair return, he will simply pass bonds by, and invest in something else. If the banker feels the risk is greater than the offered return, he too will let the opportunity pass. The consequence is for a fair price to emerge from the marketplace for bonds. The debtor may cry and protest, talking about the unfairness of it all, and telling his wife that bankers are a greedy bunch of knaves. But in a modern bank, he would merely be offered a Kleenex for his performance. There are just times when loans are expensive, and this particular debtor has encountered one. Sometimes, a disappointed debtor visits his congressman, and sometimes the law is adjusted for him to borrow at a substandard rate. James Madison felt that debtors would always outnumber bankers, so there would be a tendency for interest rates to creep upward in a voting republic. Consequently, a mixture of strategies is employed to suppress interest rates. Sometimes the government subsidizes non-market prices, sometimes the risk of default cost is buried in the overall interest rate, sometimes the bank subsidizes the cost out of more obscure profits, usually by raising the rates for wealthier clients if they are numerous. If these simple strategies go on long enough, the default occurs and its cost is assessed as taxes from the bankruptcy courts. In a modern bankruptcy, the defaulted debtor may be entirely stripped of his other assets. If that's not sufficient to cover the loss, either the banking system collapses, or the government does.
There's another big player in this game: insurance companies. Insurance companies buy lots of bonds, trying to match their interest cost with their other expenses, notably their insurance liabilities. If the insurance commissioner of the state permits it, they may even issue some bonds to cover a shortfall. In recent years, they usually buy stock equities, and if they overdo it, the stock market may get them. The crooks in this business take in the premiums in the early years, and sell the company as the aging liabilities grow older, particularly if the Insurance Commissioner is friendly. Fortunately for them, the population has added thirty years to the life expectancies of their clients, so they have not had to resort to any of these strategies as much as they originally did. Insurance companies have been very profitable, and so bond rates have developed a great deal of slack. Whether they take advantage of their opportunities is not for me to say, but it would not be surprising if bond prices, hence bankruptcy laxness, have been both profitable and slack. The two are huge pools of money, operating in largely independent markets, which can operate comfortably and separately, for long periods of time. The last two stock market crashes have been real estate collapses, and real estate is all about mortgages, banks, and interest rates. And the Federal Reserve has responded to both crashes by artificially manipulating mortgages, banks and interest rates.
109 Volumes
Philadephia: America's Capital, 1774-1800 The Continental Congress met in Philadelphia from 1774 to 1788. Next, the new republic had its capital here from 1790 to 1800. Thoroughly Quaker Philadelphia was in the center of the founding twenty-five years when, and where, the enduring political institutions of America emerged.
Philadelphia: Decline and Fall (1900-2060) The world's richest industrial city in 1900, was defeated and dejected by 1950. Why? Digby Baltzell blamed it on the Quakers. Others blame the Erie Canal, and Andrew Jackson, or maybe Martin van Buren. Some say the city-county consolidation of 1858. Others blame the unions. We rather favor the decline of family business and the rise of the modern corporation in its place.
Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
