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.
The CEO of Safeway Stores recently offered his company's preventive approaches as an example of what the nation can do to reduce health costs. He's undoubtedly sincere, but quite wrong; Safeway just shifted costs to Medicare. This is only one of several ways, major ways, cost-shifting is misleading us. Let's explain.
Average life expectancy is increasing at more than two years per decade, but of course, people eventually die. Since health care costs are heaviest in the last year or two of life, extending life will soon push nearly all those heavy terminal costs from employer-based insurance -- into Medicare. To die at age 64 costs Blue Cross a lot; but to die at 65 gets Medicare to pay for it. Either way, the cost is exactly the same, it doesn't save Society as a whole any money at all. Let's put it another way: dying at age 64 costs the employer and the employees, but dying at 65 costs the taxpayers. This means Medicare costs will surely rise, but in this case, it's a reason to rejoice.
Increasing longevity is constantly pushing more costs from employers to Medicare, and not just in Safeway; the prospect is that soon substantially all major sickness costs will shift into Medicare. (To explain the failure of most employer insurance premiums to fall comparably in response to this shift, one must look elsewhere). But just a minute. Medicare is 50% subsidized by the government, and the employer writes off half of the cost as a business expense. That ought to mean it doesn't make much difference to anyone involved, except for one thing. Some employers have two employees and some have two hundred thousand employees. The amount of tax write-off is multiplied by the number of employees, so some employers can only write off a little, while an occasional employer might even make a profit on using health insurance for calisthenics. Economists agree that fringe benefits eventually and proportionately come out of the pay packet, so ultimately the employed patient benefits from the reduced bill, his employer pays less, and the Medicare costs the taxpayers more.
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But instead of going down that trail, let's look at the second form of cost-shifting. Government payers and a few other monopolists are able to pay hospitals less than actual costs and get away with it. The worst offenders are state governors administering Medicaid, where the underpayment is roughly 30%, in spite of federal reimbursement to the states for most of it, at full price. The resulting profit is used for various state purposes, mainly nursing home reimbursement. For the most part, such diverted funds are used for purposes not easily eliminated, so it is unlikely there will be much cost reduction for the government if the scam is acknowledged and merely shifted to a different line in the ledger. To avoid bankruptcy, hospitals raise the rates for other health insurance plans -- and the uninsured. Employers are paying for most of it, so they stand to gain from reform, only to face higher state taxes as matters readjust. We have yet to learn where these costs will shift if the federal government takes over the costs of the uninsured; the current Obamacare plan is to shift 15 million uninsured persons to Medicaid. To a major degree, the federal government and its taxpayers are already paying for a lot of this uninsured cost, through the Medicaid shift. So its present dilemma is whether to continue to pay for it twice.
There's still a third cost-shift. In 1983, Medicare stopped reimbursing hospitals fee-for-service (itemized inpatient bills are still prepared but are meaningless fictions) and for thirty years has paid by the diagnosis, not the service, for inpatients. Consequently, per beneficiary inpatient costs have only risen 18% in five years, while outpatient costs have risen 47%. Costs are not the same as prices, which are even worse distorted. To a large extent, changes in costs are really changes in accounting practices, driving changes in actual practices. Skilled nursing and home care costs are rising even faster. When you hear fee-for-service payments attacked, it is this apparent overpayment of outpatient costs which is the source of the complaint. But to pay out-patient medical costs in any way other than fee-for-service would imply an almost unimaginable restructuring of the medical system, without any proof it would save money. It will be very interesting to learn what contorted proposal is about to emerge.
Medicare +6%
Medicaid -30%
Private Insured +32%
58% of Hospitals Lose Money
Not only do these shifts provoke inpatient nursing shortages, but they also start a war for patients between hospitals and office-based physicians. Hospitals are winning this war for business, but are losing money doing so. If the public ever demands a stop to loss-leaders, net insurance premiums will probably rise. The difference between a hospital which makes money and one which loses money is based on whether there is enough extra out-patient revenue to compensate for the hidden tax which the state effectively imposes on hospitals in order to pay for nursing homes. The obscurity of the present payment system is quite expensive, and the present beneficiaries of it are the Medicaid nursing homes. Obamacare essentially provides health insurance to 15 million uninsureds by the process of placing them on Medicaid, so the consequences are going to be an interesting juggling act to watch.
5-year Change:
Inpatient +18%
Outpatient +47%
5-Year Hospital Costs
Just notice, for example, that neither Medicare nor private health insurance pays below costs if you look at total national balances. Private insurers are paying hospitals 32% more than actual inpatient costs, while Medicare is paying 6% more than national cost. And yet 58% of hospitals are losing money. The magic in this formula lies in the losses incurred by state Medicaid but shifted to other payers. It could fairly be said we are just looking at a maldistribution of the uninsured, as a cost, and a maldistribution of non-inpatient revenues, as a profit, among the nation's hospitals. To what extent such maldistribution reflects uneven patient quality, as the loser hospitals claim, or provider inefficiency, as the winner hospitals would say, -- merely starts a distraction of attention which could last twenty years while we examine it.
THE Right Angle Club was recently honored by a talk by Professor William Watson, who teaches history at Immaculata University in Malvern, Pennsylvania. Although it is hard to find much memorial recognition of it, Immaculata is on the site of the Battle of the Clouds, of the Revolutionary War. Washington's army was retreating from the advancing British invaders from Elkton, Maryland, who were headed for the occupation of Philadelphia, in 1778. Although Washington had been outflanked at the biggest battle of the war at Brandywine Creek, he regrouped near Paoli and prepared to defend Philadelphia where the Continental Congress convened. A tremendous rainstorm, possibly a hurricane, hit the two armies as they formed for battle, and everyone's gunpowder was soaking wet. By mutual consent, the battle was called off. The Malvern area was also the site of the Paoli massacre, where General Anthony Wayne overestimated his understanding of the local area, and British troops attacked at night with orders to use bayonets, only.
Duffy's Cut
Professor Watson was, however, speaking about another massacre in the area, at Duffy's Cut. The Cut now belongs to Amtrak, but it was originally built in 1832, from Columbia on the Susquehanna River eastward, as the Philadelphia and Columbia RR, using horse-drawn rail carriages. That essentially means it went from Scotch-Irish Cumberland County, through the Pennsylvania Dutch territory, to Quaker Chester County and Federalist Episcopalian Philadelphia. The builders of the railroad contracted out mile-long sections of the construction to contractors, one of whom was Philip Duffy, who naturally imported southern Irish laborers to do the digging. As a sidelight, Duffy lived in Port Richmond, where he was buried, allegedly a very rich man. His work site was nearly 60 miles east of Columbia, the most expensive contract on the railroad because it involved more cutting and filling of the hilly countryside: Duffy's Cut.
Duffy's Cut Marker
Sanitary conditions at the dig site were probably pretty primitive, ideal for the spread of fecal-borne illnesses like cholera (and hepatitis, amoebic dysentery, Salmonella, and Shigella), which are characteristic of concentration camps, prison camps, army encampments, and the like.
Many later epidemiologists now trace the introduction of cholera to Canada, with downward spread along the Susquehanna, but fifty years before Pasteur there was no sure way to make the diagnosis and no knowledge of its epidemiology. The Irish encampment at Duffy's Cut might just as well have died of bacillary dysentery, but it would have made little difference to know; they just died, and it was said to be cholera that did it. It was probably some kind of fecal contagion, but modern archaeology has recovered eight or ten skulls with bullet holes at the site, and historical investigation of the more usual type has recovered letters by President Clement of the Pennsylvania Railroad, ordering a cover-up. The rest of the story is necessarily conjectural, and we have to be uncertain whether Clement was concerned about hushing up cholera in the region, or ethnic riots, and if so whether he wanted to avoid scaring away replacement laborers, or avoid stirring up local antagonisms. Professor Watson describes considerable difficulty with getting cooperation from politicians and news media in pursuing his studies, where it is hard to see any non-railroad motive, except the motive of wanting to let sleeping dogs lie.
If so, it is a serious concern. It must be recalled that the Scotch-Irish of central Pennsylvania were located there as a result of the activities of James Logan, the agent of the Penn family. The Penns wanted to sell land to settlers and felt that fear of hostile Indians was inhibiting immigration. Logan, who was himself a Scot from Northern Ireland, suggested that the protestant Scotch Irish of that region were tired of combating their Catholic neighbors to the south, and were definitely the equal of the Indians in combativeness. This is the reason the Scotch Irish of Pennsylvania were located to the west of the German settlements of Dauphin and Lancaster Counties. It is also the cause of numerous clashes with the Indians (the Paxtang Boys), the Connecticut invaders of the three Pennamite Wars, and most notably -- the Irish Catholic Molly Maguires of the Pottsville region. Throughout all of these overtly military disputes ran the readily observable fact that the Scottish tribes were accustomed to guerrilla warfare in the woods. They mainly are responsible for winning the Revolutionary War, at least in the Appalachian regions stretching as far to the south as Georgia. They leave us a heritage of bagpipes, country music, very rough football, and airplane pilots. Unfortunately, rough behavior provokes rough behavior in return, and much of the unfortunate features of the labor conflicts of our national politics can be traced to the scars and antagonisms of the Molly Maguire episode of railroads and coal mining. This may or may not have been on Clement's mind when he tried to suppress the news of Duffy's Cut massacre, but it should have been, and to some extent it probably was.
There is no excuse for shooting people in the head or killing them with an ax. But the sixth or seventh generation descendants of the victims are urged to reflect that a campful of male laborers far away from home are apt to exhibit unfortunate behaviors. Remember that no one knew the cause of cholera, but it was new, and it certainly looked contagious. The laborers may or may not have brought it with them, but somebody introduced it to the region, and it looked as though the contagion would continue to spread as long as the laborers continued to be there. There might well have been some unfortunate economic incentives at work, like the disappearance of the Conestoga wagon industry among the Pennsylvania Dutch when the railroad came through. And the obvious concern of the railroad owners that the region has a peaceful, healthful, reputation. The almost total approval of slavery by the Pennsylvania Irish during the Civil War provoked Lincoln to send ten thousand troops to the area during the Civil War. And on, and on. There is almost no part of this region which does not have some remote history of savage behavior. Let's be careful not to stir it up.
Having observed the medical student adventure of assisting uninsured home deliveries, where the main tool employed was a pile of old newspapers, I am acutely sensitive to the wide variation in obstetrical costs. Wide-spread obstetrical insurance is almost certain to increase the cost of being born, and the intrusion of their disproportionate malpractice defense costs also seems uncomfortably open-ended. Just glancing at the inordinately high malpractice premiums for obstetricians will tell you who is doing the suing, and for what justification.
By including the post-natal checkups and immunizations (with their own malpractice component), it becomes difficult to extrapolate what first-year-of-life insurance costs might become, under pressure of the illusion of being cost-free. However, we seem to be in a demographic decline, where it becomes increasingly desirable to increase the birth rate by diminishing its cost obstacles. If abuses can be minimized, obstetrics is one area where public subsidy seems to encounter public approval, and self-insurance is not at all practical. In fact, almost the same could be said about all health expenses up until the age of eighteen, but it seems a pity to lose the opportunity for two doublings of investment income because of unsettled disputes about marriage, divorce, feminism and the responsibility for child support.
Although expediency in the direction of taxpayer support may prove to overwhelm this admittedly contentious area, the expenditures are comparatively small, so it still seems useful to explore what could be done with first-year pre-payment. Health costs which someone must pay do exist for children growing up, and the emotional appeal of insurance for this group is strong. Getting their health care finances organized before they reach the workplace would be a useful thing since the tendency of healthy young adults to duck the costs is part of what caused a present uproar about uninsured obstetrics. All of which is to say: social gains might justify public subsidy for the first year of life, at least in part.
The individual's Health Savings Account becomes the long-term banker for the first year of life, with the first conventional health insurer acting as short-term banker.
Someone is paying for the first year of life health costs, and that someone would appreciate getting reimbursed for it, fairly soon. Therefore, the addition of less than a hundred dollars to the costs of the first health insurance company to enroll an individual would not deter the enrollment very much or even stimulate much switching between insurers later to evade it. The intent is to open a Health Savings Account, borrow from the first insurer, and pay it back when enough money has accumulated in the HSA.
If no insurer steps forward in a reasonable time, a small and temporary government loan might be in order. In return, the insurance company could anticipate a profitable and "sticky" customer for many years, meanwhile exerting more downward pressure on obstetrical costs than the young parents ever could. That is, by retaining the right to reject a customer for bringing along excessive obstetrical prices, those prices would re-open to negotiation. And realistically, a disproportionate share of obstetrical deliveries are paid for by Medicaid, which would lead to some taxpayer subsidy. In the case of uninsured obstetrics, it would appear the individual Health Savings Account itself would have to be the banker. But since the purpose of the Affordable Care Act was to leave no one uninsured, this might conceivably pose little problem. To say much more about this approach would be foolhardy until the Affordable Care Act begins operations and stabilizes its rules. The essence of it all is to make the Health Savings Account the payer of last resort for obstetrics, in the far distant future when compound investment income should be ample. The first childhood health insurer would become a voluntary short-term banker until the HSA grows enough in size to buy it back. Because it is so vital to keep opening costs low, the pressure to maintain obstetrical provider costs within reason is essential.
The advantage of looking at the retrospective payment for the first year of life lies in its quality of affecting 100% of the population. Its disadvantages mainly grow out of the ambiguity of who is responsible for the costs, the child or the parents. For obvious reasons, Society has chosen to select the parents. However, this leads to hidden incentives for the employer and the insurer to discourage procreation. In turn, this brings culture and religion into the discussion to an unknowable extent. It is probably not a safe subject for a book on medical economics, and we will conclude by merely mentioning the matter.
"Eighty years ago any one of the 'tycoons,' whether in the U.S, Imperial Germany, Edwardian England or in the France of the Third Republic, could and did by himself supply the entire capital needed by a major industry of its country. Today the wealth of America's one thousand richest people, taken together, would barely cover one week of one country's capital needs. The only true 'capitalists' in developed countries today are the wage earners through their pension funds and mutual funds." (Peter F. Drucker, The Wall Street Journal, September 29, 1987.)
In the passage displayed above, a noted authority on the American economy has concisely captured the new dimensions of capitalism in the Twentieth Century, even though his jump in logic can be disputed. It is too soon for the evolution from Nineteenth-Century tycoons into universal capitalism to have affected common parlance; redefinition took place without anyone's planning or prediction. People who describe themselves as workers and employees are slow to develop attitudes and skills appropriate to their new economic power. It is equally uncongenial for those who think of themselves as entrepreneurs and managers to accept "people's capitalism" as the present and growing future of free-enterprise America. Drucker's partitioning of the country into two classes may well be disputed, but he has an insight of some sort which warrants examination. Obsolete class rhetoric will doubtless persist through several more presidential election campaigns.
Two things fit together here. It takes a ton of money to finance a multi-trillion a year economy. It also takes a ton of money to pay for a whole country to retire from work at age 65 and then go on a twenty-year vacation. The new imperative of capitalism is that we somehow must save enough of our collective working income to supply the capital requirements of the economy, which must, in turn, employ such capital efficiently enough to pay for our old age including its inherently heavy medical costs. If we have wars we will have to pay for them too, but the main dividend of our economy does go into a national retirement nest-egg. That's why we work, and that's all we have when we are done working. Stop worrying about quick-rich stories like Mr. Boesky's concerning conspicuous consumption by overpaid yuppies on Wall Street. Forget about the occasional person who takes a year or two off in mid-career to wander around Nepal. Don't however forget to remember the poor, the disadvantaged and the shiftless, because they get old too, and are part of the molten mass. In my view, the national economy can be roughly summarized as a process in which we collectively attempt to have nearly everyone spend his last cent on the day he dies but not a day sooner, living as well as he can in the meantime. Within the scope of this description we thus all become capitalists as we strive to enjoy twenty years without working income after we retire. The only alternative is that we mustn't live so long.
Because broad-based or near-universal capitalism has evolved recently and is not entirely acknowledged, the present system has some large transitional defects. Health insurance, unfunded health insurance, is one of the main defects we will get to in a few pages. A more immediate structural defect is what is that we have not yet evolved an efficient system of aggregating the savings of a nation of little capitalists who are unsophisticated in the ways of Wall Street and want to stay that way. Not only does it cost excessively to hire investment advice, but the voting power of ownership control gets lost in the process.
In the bad old days, when J.P. Morgan and others would buy common voting stock, they bought the company, and the company certainly knew it had been bought. If all of the officers and managers of the bought company weren't soon changed, that was only because they made desperately clear they were ready to take orders about company policy. By contrast, when T. Boone Pickens today buys a similar share of the voting stock of a corporation, the hired hands appear before a congressional committee, or the legislature of Delaware, to get a law passed outlawing the "unfriendly takeover". In Morgan's day, money didn't just talk, it screamed. Today, well, money is in a fight for its life with one-man-one-vote power in the hands of elected representatives. People's capitalism has become a humbled passive investment process, although not necessarily a cheap one, or invariably profitable.
There may be some exceptions, but the middlemen in peoples capitalism have generally declined to grab the voting power which the small stockholder cannot usefully exercise. The people who run what is known as the "Institutions" are custodians of great gobs of other people money in a mutual fund, pension or insurance trusts, and hence hold enormous voting power in the election of corporate directors, officers, and auditors. For some reason institutional investors seldom vote against the management, generally preferring to sell the stock if they are dissatisfied with the way things are going in a portfolio company. Consequently, the entrenched management of major publicly held corporation can do just about as it pleases even following policy disasters. To say this is a flaw in our system is a massive understatement. Things which run by the law of gravity generally tend to go in only one direction. No one wants to see the Japanese pulverize our major corporate jewels, no one wants to see them repeatedly greenmail. Nobody loves a corporate raider.
And still, it is clear the little stockholder cannot and never will aspire to meaningful voting power in a corporation which has millions of shares and thousands of stockholders. (Footnote; When I get those expensively packages proxy cards for my pitiful holdings, I always vote along with management. My theory is it's a good thing to change watch dogs frequently, and my Quixotic vote might hurt somebody's feelings enough to notice the message it sends). The system of governance of very large corporations needs to be reformed by its insiders before consumer activists using one approach, or elected public officials using another, manage to fill the power vacuum to our national disadvantage. They might, for example, reexamine the New York Stock Exchange rule, prohibiting the listing of companies with more than one class of stock. Someone should be asked to evaluate the experience of companies like Ford which evaded the rule, or of those companies which escaped to other exchanges to avoid it.
The directions such reform might take are not the concern of this book; the present focus is on the difficulties which are created for pre-funded health insurance by the fact that corporate voting power materializes whenever major purchases of common stock are made for purely investment purposes. Unpredictable things happen no matter how the stock is voted. If the voting power in the hands of custodians is never exercised, corporate control automatically concentrates in the hands of those whose ownership is relatively minor, whether insiders or outsiders.
One does not have to be a rabid conservative to recognize that government ownership of voting control of a corporation is a form of is w form of nationalization. The Labor party in England nationalized the steel and airline industries, the Socialists in France and India nationalized the banks, Communist doctrines go to the extreme of requiring government ownership of the total "means of production". If we are imaging success in the effort to pre-fund a trillion dollars of health insurance, we have to contemplate the highly undesirable features of potential government control of the voting stock of IBM, American Telephone and Telegraph, Exxon, and Morgan Guaranty Bank. The aggregate worth of all he stock on the New York Exchange is xx xxx. A trillion dollar worth of all the stock implies voting control of quite a bit of corporate America, no matter how sincerely its managers try to avoid it. a resolutely passive investment stance would just make it cheaper for the Japanese to buy control or for that matter the Russians, if they wanted to do it.
This scary line of thought potentially leads to the conclusion that pre-funded health insurance should avoid the purchase of common stock. But that seems bizarre; the historical difference between a 3% return (bonds) and 8% return (stocks) means this voting control issue could condemn health insurance pre-funding to a pitiful fraction of its potential for reducing the costs of an essential social service. It seems imperative to seek ways to improve the long-term return, even if government-controlled pools have to be rejected. True, massive increases in the proportion of non-voting stock confer unwarranted power to the management of the corporations and their potential greenmailers, no matter who runs the passive investment pool. Go one long jump beyond that; they just cannot be permitted.
As a matter of fact, it is impossible to conceive of a permissible investment vehicle for a government-controlled fund, except government bonds. Unfortunately, when you look at what has happened to the Social Security trust funds which are totally invested in government bonds, you find an appalling thing. Buying government bonds isn't too satisfactory, either.
When sums approaching a trillion dollars are involved, even the finances of the United States Government must reckon with the law of supply and demand. If a lot of people want to buy government bonds, they push the price up as long as the supply is limited. Since government bonds are issued to pay for federal debt, increasing the supply of those bonds means increasing the national debt, so we ordinarily don't want to do that either. That is, we don't want the Treasury to issue more bonds just to provide a safe investment vehicle for funded health insurance. On the other hand, by restricting permissible investment to government bonds in huge amounts we cripple the cost reduction of health insurance, since the inevitable result of clamoring to buy bonds will be lower interest rates. Quite aside from the fact that a captive customer gets shabby treatment, it may not be in the national interest to lower interest rates. Since Government bonds are regarded as the safest possible investment, their rate is the floor under all interest rates in the country or even the world. So, lower interest rates are inflationary, even at times when it may be contrary to national policy to stimulate inflation.
What this focus on government bonds has stumbled onto is the mechanism by which modern government attempt to fine-tune the national economy, a process mostly devised by the British economist Maynard Keynes. Based on the premise that no one controls enough money to affect the market price of government bonds, the government sets the price by buying and selling to itself. This particular conflict of interest operates between the Treasury which issues the bonds, and the Federal reserves which buy them. To a certain extent, the Arabs and the Japanese have been rich enough to influence the price of US Bonds, but the largest "external" bond buyer has been the Social Security trust funds. The quasi-external quality of the trust funds is often minimized or exaggerated as it suits some momentary purpose. If more money flows into the funds from tax payments than flows out for pension checks, the trust funds are described as assisting the national deficit. However, if the future indebtedness of the funds is increased more than current revenues are, this debt is regarded as the trust funds' problem and not a matter of national accounts. All this is a cross-generational difference in point of view. My generation can only see it as one big sticky ball of wax. The Federal Reserve's regards it as a major obstacle to their effective use of Keynesian principles. One has to conclude that it would be very unfortunate to add a great big lump of health insurance funding to a government bond problem which will be convulsive enough without it.
In summary, what can we conclude about investing the proceeds of funded health insurance, if we could ever get around to funding it? We see that the creation of a new source of investment capital would be an enormous asset for the national economy, but reckless dumping of huge amounts of cash in any market at all could be disruptive. The purchase of common stock would be considerably more cost-effective than buying bonds, and in the long run, might even be safer. However, equity markets need to consider how to cope with the continuous concentration of voting control of major corporations by default, as a majority of votes would become further locked into passive custodial accounts by funded health insurance. And finally, control of funded health insurance by government agencies poses the same problem of stock voting power which is left to Wall Street to solve, the next chapter tries to consolidate these issues into a general prescription. Remember, Index fund investing is momentum investing. If everyone does it at once, it will pop the bubble.
The Union League of Philadelphia is much bigger than it looks to be on the outside. Diffidence is a characteristic of our city, which has been called a city of secret societies. The club appears to passers-by to be a funny little brownstone house facing out on the main street in town, but in fact, the main building is a full block long. Down the interior of that long building runs peacock alley, a sumptuous wide carpeted corridor. Deep leather chairs line the sides of the alley; members can sit and read a paper while watching the passing parade, occasionally hailing a crony, or taking a nap. Some cartoonist for the New Yorker must have seen the bay window at the Metropolitan Club in New Yorker, and that bay window symbolizes downtown clubs to most non-members. The Union League has portly old gentlemen in leather chairs, all right, but the passing scene they watch is all interior. There are many sights to see while strolling the length of the private street. Six dining rooms, for a beginning, kept private from the corridor by huge plate glass partitions which allow diners to talk privately yet remain able to see and be seen. If you are friends with a number of other members, the arrangements are perfect. If you don't know anyone else, it is just an elegant place to be lonesome.
Two rather plump old gentlemen with canes came strolling along while I was having lunch with Joe, just inside the glass partition. A medical eye could see that both old fellows were walking with poor balance, and general lack of coordinated movements from the waist down, even though their automatic muscle coordinated movements from the waist down, even though their automatic muscle coordination above the waist was normal. Undoubtedly due to the destruction of the nerves to the legs from degeneration of the spine, though I, and likely associated with embarrassing disorders of the sphincters. The matter was an interest of mine since I had been proposing surgical approaches to this increasingly common curse of old age. To my surprise, one of the old gents came through the door and up to our table.
"Is this Joe Nicholson? And how are my old friends, if you are still my friend? I'm Woody Woodring." Joe sprang to his feet and shook hands. "Why, Woody, how nice of you to stop and speak. I'm just fine, thanks, and I'm not that old, either.",
"Well," said Woody, "I'm ninety-seven, so you must be ninety-six. Stop trying to pull the wool over everybody's eyes, Joe. Be good, and stay away from that ticker tape. It's dangerous for your health."
As toddled off, Joe explained to me that the man had once been the executive vice president of the Land Title Bank. Yo had to be fairly mature to know what that meant because the Land Title merged with the Corn Exchange Bank some forty years ago, and after that was merged into the Provident Bank, which had itself been acquired by some bank in Pittsburgh a year or two ago.
Joe then settled down to his fourth corn muffin, one of the traditional features of the League. I occasionally eat one for tradition's sake, but Joe was absolutely a cornmeal muffin junkie. Before we were interrupted he had been telling me of an oak tree on his property at home which had been struck by lightning. It was the largest tree in New Jersey, or at least appeared to be larger than the Salem Oak which the Sunday supplements say is the oldest tree in the state. The Nicholson tree had been found to have 350 rings, and therefore has been on the property almost as long as the family had lived there. The Salem oak itself was also on what had once been Nicholson family property, but now, of course, belongs to the Quaker Meeting in the town of Salem. The Nicholson family had arrived in 1670, but Joe's father had married a Thompson. Since the Thompsons had arrived in America five years earlier, Mother would often refer to the FAther's family as "immigrants". Quaker doesn't laugh much, but they chuckle a lot.
It was obviously symbolic of his whole life that his couple of acres in suburban Haddonfield were legally provable virgin timberland, completely surrounded by urban sprawl for miles in every direction, totally unrecognized for what they were. I understand it was a nuisance that the high school kids would gather in these woods, especially at night, and drink beer and smoke whatever kids are smoking. If you knew what you were looking at in that little forest, you could see that Joe had planted dozens of strange varieties of firs, ferns, bulbs, vines, and bushes. Most of them had been begged from John Bartram's garden, or what he called DuPont's arboretum, at Longwood. But many of them he had imported from abroad when he was a traveling youth, long before the Customs Service started banning the importation of living plants. He had quite a grove of Passion flowers, a flowering tropical vine. Joe had discovered the vine rooted so deeply it could survive Northern winters, emerging from the bare ground around "Decoration" Day. A walk around his premises might typically produce a commentary that a certain unusual plant had been transplanted from the ruins of ancient Troy, but only if the visitor had the perceptiveness to notice the plant looked odd. As can be guessed, the interior of the house looks like a junk shop until each priceless antiquity is explained. The house is new since Quaker believe "worship of buildings" is idolatry, and anyway his wife Bettina is nearly blind needing special arrangements not available in colonial houses.
One of Joe's ancestors had been Lord Mayor of London, and an earlier one had signed the Magna Charta. I knew these things because his brother, an orthopedic surgeon, has been less reticent. His brother was also notorious for the high fees he charged and grimly expected to be paid promptly. The other side of the orthopedist showed up in his charity work; when I was intern I could see free care took up at least half of his time.
Until rather recently, Quakers were discouraged from marrying out of a meeting, and by that was meant the local congregation. That edict could lead to a lot of family inbreeding in a farm community, but there is little evidence of genetic disorders among them as are quite commonly found among the Old Order Amish. I suppose it is possible the genetic burden has been bred out of them in some way; in any event, birthright Quakers tend to look much alike and are quite handsome. They can, on occasion, summon up quite a formidable network of influential family members.
Quaker influence is also spread through the private schools they run, most of which were founded before there was a public school system. Like all private schools, they have to produce superior education to survive, and they have to appeal to prosperous families. Farm families who want superior education tended to send their children away to boarding school, but now that this motivation has largely disappeared, they must provide a superior educational product or dissolve. It was with some surprise therefore that I learned that Joe and his children had gone to Camden public school, about which in retrospect he is disdainful. The kids got into Vassar and Harvard, but it's hard to know why, and they had a terrible struggle as a freshman. As a boy, Joe tried to get into the premier Quaker boarding school at Westtown but was rejected. Mother was Hicksite and Father was Orthodox, and Westtown only took you if you were Orthodox. Mixed marriages, you see, breed spiritual confusion in children.
When Joe had finished the last corn muffin the waitress was willing to bring him, I had to get back to the office and he wanted to get to the library at the Federal Reserve Bank. We walked down the red carpet alley and paused to look at the ticker tape. The stock market had fallen 508 points two weeks earlier, so you didn't have to be T. Boone Pickens to have a concern. Well, only down two points, so off to the office and library.
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.
