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.
As 2005 turns into 2006, we watch an upward surge in the price of gold for the first time in three decades. The last time the gold price soared, America had gone off the gold standard completely, ending traditional promises that U.S. dollars could always be exchanged for precious metals at a specific price. A brief flutter of the exchange rate ("the price of gold") under floating-price circumstances was to be expected since it was even conceivable that the price of gold might eventually go down. It didn't, and when things settled out it was roughly true that the price had migrated from about thirty dollars for an ounce of gold to about three hundred dollars an ounce. The conversion price has experienced fluctuations since that time, gradually moving to four hundred dollars an ounce in thirty years. There was a reason to see this as a one-time readjustment. The floating prices of precious metals might drift along independently forever, responding to fashions in gold jewelry and advances in dentistry, but a matter of little interest to anything else. No doubt there would be panics in third-world politics, but anyone one who staked life's savings on predictions of wars and famines in the underdeveloped world was imprudent a nut. A gold bug.
This time, it seems to be different; all is calm. The price of gold now exceeds five hundred dollars an ounce; responsible publications even conjecture it will go to a thousand within five years, perhaps three thousand in fifteen years. You might say wild predictions are thus flying about that our savings will lose ninety percent of their value, but nowadays nobody seems willing to say this is either a crisis or just nutty talk. There is both an absence of alarm that the price of gold is predicting disaster, but also a lack of scorn for dumbbells who would actually believe such a thing. A cynic would say that the columnists in financial magazines all seem to be owners of some gold and are talking up its price. But we were told it didn't matter, so we seem to believe it.
A more reflective view would be that we are experiencing the first real test of the world's new monetary system, at least its first challenge by the marketplace since the convertible link between gold and dollars was officially severed. The value of gold seemingly has little to do with its basic utility for dentists. The value of the dollar seemingly does not attempt to relate to the actual supply in circulation, nor attempt to represent a share of all American assets; those things are too hard to measure. The number of dollars in circulation is governed by watching inflation and unemployment and having the Federal Reserve create more or fewer dollars as needed to keep inflation and unemployment at some steady, pre-determined level. The price of gold is something else, irrelevant to a civilized society. It's all terribly clever, but it ultimately depends on whether those pre-determined levels of inflation or unemployment are well chosen. And whether politicians might tinker with them.
It would, therefore, seem likely that the clearing price between gold and dollars is currently putting a high value on gold for reasons other than a current over-supply of dollars or a world shortage of the metal. We must look elsewhere for the cause of the gold-price panic. The Chinese and the Indians are getting richer; perhaps the value of precious commodities somehow reflects that relativity. Or perhaps we are dealing with political predictions; a civil war in China renewed war between India and Pakistan, a revolution in the Persian Gulf oil kingdoms. Or atomic bomb terrorism directed against the United States. Whatever political upheaval it is that bothers the gold bugs must be pretty big; neither the war in Afghanistan nor the one in Iraq or the combination of both, was enough to stir up gold prices to the present degree.
In a sense, the worst possibility would be: the gold hysteria has no rational basis at all, like the tulip bulb frenzy of several centuries ago. The immediate question gets raised whether a merely intellectualized value for the currency can withstand cataclysmic world events. But if there is no serious threat of world cataclysm, then the remaining question on the poker table becomes whether hysterical financial commentators can topple the dollar system just by mindlessly stampeding. A monetary system which cannot withstand such a trivial threat is not a viable monetary system. The financial world's eggheads would then be in a war with the financial world's green-eyeshade gamblers. It's not entirely safe to predict who will win.
The steepness of the federal interest rate curve -- ten-year treasury bonds pay more interest than three-month treasury bills, and the rate for intermediate time intervals slopes gradually from one to the other -- is a function of the Federal Reserve; the slope of this curve concisely describes current Fed policy. The Federal Reserve controls the money supply by raising or lowering short-term rates, which "affects the slope at the short end", and mainly in this way restrains or encourages inflation, or alters the exchange value of American currency. For the most part, long term rates are set by the public bond market. Once in a while, the Federal Reserve does buy or sell long-term treasury bonds to modify long-term rates in the economy. By affecting rates at either end, the result is some kind of change in the slope of the curve.
Because banks make interest payments to depositors near the short-term federal rate, while the same banks charge borrowers at near the public long-term rate, the current slope is the main determinant of bank profits. Banks borrow short and lend long. If Federal Reserve tinkering steepens the curve more than it would be without interference, then bank profits are subsidized. Of course, it works the other way as well; in a banking crisis, yield curves can be steepened to rescue banks from failure, thus potentially sacrificing ideal monetary levels temporarily. For the most part, what is good for the banks is good for the economy; but it remains that bank profits are subsidized much of the time. Artificially widened yield curves either punish savers by lowering interest rates on their savings accounts or else punish borrowers by increasing interest rates on mortgages and other credit. For political reasons, the pain is usually shared among voting blocs. It can be argued this invisible subsidy of banks by the public creates a compensating benefit of economic stability despite occasional bubbles and recessions like the present one. However, the Federal Reserve system has been in operation for almost a century, revealing a long-term bias in favor of inflation, which is a subsidy of debtors by creditors. Present policy deliberately targets a steady rate of 2-3% inflation; the gold market responded to a century of this by raising the price of gold from $17 to $900 an ounce. A 1913 penny has become a dollar (before taxes) you might say. You might also say it took the Federal Reserve less than a century to make the present dollar worth a penny.
If gradual inflation is a consequence, a fair question must arise whether the Federal Reserve is worth its cost. Compared with an inflexible, relentlessly deflationary Gold Standard, yes, it is. Even accepting the monetary crisis as partly created by central banking, the international dominance of the American economy and recent smoothing of banking instability testify to the durable use of the Fed. But another criticism must be faced: In subsidizing depository banks with an artificial yield curve, is the Fed backing the wrong horse for the future? To answer that question, examine two components: With computer technology rapidly advancing, can the Federal Reserve accommodate non-banking competitors to banks? And secondly, international central banking appropriately accommodate globalization? There are, after all, aspects within the 2007-20?? a crisis which suggests -- maybe it can't.
Steady inflation of 1000% per century may well be preferable to 19th Century volatility of 1000% every ten or so years. But a gradual rise of, say, 500% or less each century might be even better. Relentless political pressure on the Federal Reserve has typically been used to explain its slow retreat from truly stable prices, and this defense takes the form of mentioning its dual mission of minimizing unemployment while holding prices as steady as possible. In recent years, European political rhetoric goes further, aspiring to add the right to employment to their fifty-page Bill of Rights; similar utopianism has crept into our own news media. Governments for thousands of years have cheapened their currencies. But while the drift is clear, our own pace is set by the amount of subsidy required to maintain a steep yield curve. As retail banks have struggled to compete with the wholesale investment banks, their increasingly uncompetitive costs require a greater subsidy from the yield curve. It is always going to be more expensive to aggregate deposits for lending purposes than to raise large sums by floating a bond issue. Securitization is here to stay because retail banks have consolidated and savings banks have gone out of business by the thousands; the mortgage industry can no longer survive without substantial amounts of mortgage-backed securities. Nor should it; securitization is a sensible route for importing capital from nations with a trade surplus. Depository banks long ago lost the borrowing business of corporations large enough to float their own bonds; securitization provides a means for smaller borrowers to share the same efficiency. After it has tried everything else, Congress will eventually devise a reasonable regulatory system for derivatives. Except for smoothing the transition to whatever proportion of market share the investment banks can justify, perhaps all of it, the subsidized yield curve impairs efficiency. It would be a mistake to allow some foreign nation to exploit such an opening before we do. The technical problem for all central banks is to devise a suitable alternative method of controlling the currency, other than by targeting inflation with adjustments in interbank lending rates.
Observers led by Martin Wolfe the economist for the Financial Times feel the 2007-20?? financial crisis can be adequately explained by Chinese pegging their currency too low, and could be rectified by persuading the Chinese to float their currency. Regardless of this extreme view, globalization is clearly both a good thing and an inevitable one. Thus some form of discipline must be devised to prevent central banks from destabilizing it for their own advantage. Wolfe proposes the use of a strengthened International Monetary Fund, which is unfortunately apt to project international politics into a process which could be harmed by it. An alternative to be examined might be to pool sovereign wealth funds as a pooled currency reserve, although this system probably could not withstand present extremes between surplus and debtor nations, so getting world acceptance could be protracted. Ultimately, everyone realizes that the real backing for an international finance system is the net worth of the whole world. But the example of Lloyd's of London is a haunting one; no one relishes putting absolutely everything at risk, down to the last shoe button. In the event of a disaster, everyone wishes to hold back some nest egg to use for recovery. Because of the same line of thinking, almost no one would trust foreigners to control more than a limited share of their future.
The future of international monetary relations is thus quite murky, but current pressures would seem to be driving something fundamental to change. When it does, regulating artificially manipulated yield curves had better be kept in mind.
It's a convenience for the insurance company perhaps since it reduces the insurance cost by 20% and is easily figured on the back of a salesman's envelope. Therefore it helps in the three-way negotiation between the employer, the insurance company, and the union. The union calculates how much income tax the employees save by how much income is split between the "fringe benefits" (non-taxable) and the "pay packet" (taxable), and the negotiations shift around these offsets, usually at the end of grueling collective bargaining.
It was once explained to me that Co-pay was very popular with negotiators for unions and management because it was easy to calculate the total cost of it for an entire self-insured corporation. If a proposed budget for the employees was known, and the budget for health benefits was agreed, the arithmetic was easy. If the company has a 20% co-pay, it can reduce the company's total insurance cost by 20%, and if it doesn't come out right, you can negotiate 18% or 22% or whatever. Late at night when these negotiations characteristically get serious, the cost of the offer and counter-offer can be quickly calculated. By contrast, if a deductible is proposed, you have to know how many people use the program, how often they would get sick per year, and even so the calculation is difficult, requiring actuaries or at least accountants. So, the explanation ran, everybody, likes co-pay, and everybody hates deductibles. The insurance people present especially like co-pay, because there will soon be a demand to add it to the package as second insurance, and the premiums for that are also easily quoted, up or down as the negotiations proceed. When it got to involve Medicare and Medicaid, the Congressmen were in essentially the same position of only wanting to know what bulk costs of the whole program would be. In short, co-pay is easy to "score". But the best that can be said for it is, it's just another short-term benefit for which long-term costs are increased because there are diminished incentives for the third-party to hold them back. Just kick the can down the road.
It has never seemed completely credible that anyone would base expensive decisions on considerations so trivial, but you never know. Having invented Medical Savings Accounts with John McClaughry in 1980, for me the mysterious resistance to high deductibles has never seemed adequately explained. Negotiators must easily see that two (or three) insurance policies will be more expensive to administer than just one. They must immediately acknowledge that being 100% insured will increase costs by making the beneficiary ignore the cost, and they are probably willing to accept (off the record) the American Actuary Association's estimate that costs are thereby increased 30%. That much alone would free up about 5% of the Gross Domestic Product since we are currently spending 18% of GDP on Health care. There has almost seemed no point to go on that wages could be increased by diverting this wasted money to the pay packet, to say nothing of the frustration many doctors feel at having no idea of the true cost of what they order, and hence little interest in making the number smaller. Obviously, if true costs are concealed, they go up. This blinding of the doctor to true costs is what makes cost-shifting easy to do without criticism. The absence of a pool of deductibles makes it impossible to generate compound interest, and that in turn makes it less practical to consider "portability" of health insurance from one employer to the next. It is at the very root of fictitious costs for medical care of all sorts, which somehow seem to the advantage of many participants in the health field. Eliminating co-pay would result in a small saving, and it probably would result in a big saving in healthcare costs. The aggregate national savings would be astonishing. Health Savings Accounts are slow to be adopted, not because they fail to save money, but because state laws have imposed mandatory insurance benefits for small-cost items, apparently passed for the main purpose of undermining deductibles.
Most people initially resist the idea of a high deductible on the ground that poor people can't afford it. When it is explained that what is intended is basically to give the poor the money to pay for it, most resistance disappears. A more correct description is that some method is constructed to give them the money, but in a way that allows them to spend money left over from healthcare, for something else they want to buy. The ability to buy something else is not the same as wasting it, and safeguards are only prudent. Retirement is the use most commonly considered. Because interest rates are being suppressed by the Federal Reserve, this proposal may be somewhat retarded for a year or two, until interest rates return to normal levels. Addition of an inflation-protection feature (like TIPS) might well enhance its attractiveness. Ultimately, the first step would be to eliminate Co-pays. Completely and permanently.
So much for expecting foreigners to help us. They remain grateful to America for winning World War II, but that was seventy years ago. Forget about reserve currencies, a declining surplus of gold bars, the Marshall Plan, Truman Plan, and all that. After seventy years of thanking us, foreigners quite rightly expect us to pay for our own health care without monetary subsidies from them. Or protectionist trade policies, either.
To begin with healthcare basics, lifetime medical costs over the past century have progressively migrated toward the end of life, and the end of life has itself moved later. Lifetime earnings remain concentrated near the middle of life, so a gap widens. Collectively, the population accumulates wealth during its working years, spending its savings for healthcare after it retires. If lifetime health costs could be pre-paid and funneled into savings, with the savings professionally invested, a large proportion of medical costs might be paid out of investment income. It could be called the difference between pre-payment, and insurance, except whole life insurance, employs the same principle. Considerably expanded, this insight could markedly reduce the cost of healthcare, making it more affordable without changing it. Because medical care is undisrupted, the hidden cost of disrupting it might vanish, too. It creates what the Japanese call a virtuous cycle. (It wouldn't hurt to read this last paragraph a second time.)
If lifetime health costs could be pre-paid and funneled into savings, with the savings professionally invested, a large proportion of medical costs might be paid out of investment income.
The average American healthcare costs we are discussing are in the neighborhood of $10,000 a year, surely somewhat less for younger peopleFootnote . They are about double that for the last year of life, somewhat less than that for the first year of life. Medicare is about 50% paid for by subscribers, 50% subsidized by additions to the national debt. Ignoring inflation and tax effects, the net average real lifetime health cost at such rates would be at most $800,000, of which $400,000 would be additions to the national debt. Remember, projecting healthcare costs seventy years in advance is a very hazy business. We certainly hope these projections prove to be a gross over-estimate, but to remain on the safe side the proposal here is to make a lifetime investment to cover only the first and last years of life because the heavy costs of birth and death affect 100% of the population. The projected cost of these two benefits would be $30,000, from which $15,000 could possibly be subtracted as the national debt, or else subtracted as double-counting the cost-shifted expenses of indigents. Meanwhile, removal of the first-and-last year costs would reduce annual costs by about 4%, or $30,000 lifetime. So it seems safe to start with a $ 15,000-lifetime goal, which could be achieved by investing $8 at birth at 7% tax-free return. That's right, eight bucks. Different assumptions produce different answers; the only purpose of the example is to demonstrate easy feasibility of the approach. Multiply the initial contribution by five or ten times, and you reach the same conclusion.
Scientific advances during the last century greatly changed the shape of two curves, of lifetime income and lifetime medical expenses; future advances will surely do the same. The life expectancy of Americans roughly lengthened by thirty years and continues to increase. The logic of compound interest demands that money at 7% will double in ten years; the longer you live, the more times it will double; that's pretty old stuff. What is new and unique is the way adding three extra doublings helps the virtuous cycle, maybe changes it significantly, because 2,4,8,16,32 keeps getting a lot bigger at the far end. Three more doublings make the difference between 32 and 256, and that's a drastic difference.
But, whoa, on the other hand, the longer you keep money in a bank, the more opportunity there is for financial crashes, inflation, "moral hazard", mismanagement, changes in political philosophy, wars and a thousand other things. Eighty years is a long time from now; who says the money will be there when you need it? And even if all the 19th Century nightmares are merely pipe dreams, an awful lot of Americans remain mistrustful of financial institutions. Presidents Jefferson, Jackson, Van Buren and an equal number of nearly-successful candidates for president were even in favor of abolishing banks. A large and possibly growing number of Americans distrust the Federal Reserve, and with some reason. After all, a dollar in 1913 when the Federal Reserve was founded, is now worth a penny. Pause for a moment, reader. You have now heard both sides of the argument, the opportunity and the risk. Everything from here on details. At some point in the next century, investing a few dollars at birth will generate enough income to pay for both being born and dying, the two medical conditions which are 100% certain. It might even generate enough to pay for lifetime medical care, and more, but that isn't the point. What matters is for us to have the wit, and the courage, to take advantage of something which sort of crept up on us.
Footnote The data used here are rounded-off and approximated 2011 data obtained from HHS reports. It is intended that a later edition of this book will contain an appendix of actual 2013 statistics, the last year before the Affordable Care Act became operational.
At first, currency and healthcare appear to be unrelated. However, after composing four books about Health Savings Accounts, currency-backing and health-financing now seem to have much more in common. In particular, interconnections and ideas appear along the way, and new ideas emerge as extensions of the original one. This slender volume uses that quality of composition to explore what it might be like if three concepts (backing the national currency, preventing currency manipulation, and total-market index funds) were combined.
The basic idea turned out to have considerable coherence, with index funds well suited as universal "standards of exchange" (instantaneous indicators of market value). That was especially valuable when the trade becomes injured by out-of-control inflation. Index funds, however, are less satisfactory as long-term "stores of value", when nations resort to currency price manipulation, which they can use to resist the afore-mentioned commodity price stabilization. Therefore, a common standard is required at two levels, not just one. In the Bretton Woods system, the supra-national level is the Special Drawing Rights of the International Monetary Fund.
It is here suggested stock index funds be the price standard which substitutes for both currencies and SDRs, thus removing both levels from political control, but in different ways. In all this, they somewhat resemble Health Savings Accounts, where the price of healthcare could be stabilized by market-basing its finance on passive (i.e. total stock index) investing, a concept which was never envisioned at their beginning.
Health Savings Accounts were created in 1981 by John McClaughry of Vermont and me when John was Senior Policy Advisor in the Reagan White House. The underlying idea was patterned on the tax-exempt IRA (Individual Retirement Account) devised by the late Senator Bill Roth of Delaware. Its three revenue-enhancers were the tax exemption, compound interest magnification, and the incentive to save for yourself rather than for demographic groups of strangers. Almost any financial institution might handle the straightforward mechanics, with policy decisions shifted toward the customer who owned them. Fitting for a medical emphasis, HSA tax-exemption was confined to medical expenses, with unexpected big medical events covered by inexpensive high-deductible health insurance. But switching from favoring health issues to favoring more trade and more economic growth was less a revenue issue, and more a hindrance-removal one. So when the focus changed to international balances, it then needed international features to channel it, while purely medical features could be downplayed. The thing they had in common was a large and dependable funding pool. The effective size was not how much was deposited into them, but how much could be withdrawn when it was really needed. Only later was it realized that a substantial amount might be left over at age 65, where it could be used to fund the extended retirement of those with superior health. Not only did that extend the period of compound interest, but it also provided an incentive for younger people to save even though they felt no threat of illness. The emphasis shifted somewhat from the threat of sickness expense to that of a lifetime reserve fund.
The idea of a nation state, on the other hand, was established for the Western World in 1648 by the Treaty of Westphalia, after the Thirty Years War over Religion. It took years of squabble and deep thinking to arrive at a simple formula allowing for multiple religions in Western Europe: a nation was to be inflexibly defined by its boundaries, and within those boundaries, the nation's religion was defined by the religion of the King they happened to have chosen by their own methods. Everything else could move across borders. The nature of the currency posed a slightly different problem from religion. Kings were regularly observed to cheat on the currency, mostly to finance wars about boundaries. National sovereignty was both enhanced and subordinated to accommodate religious problems. Everything else was negotiated between kings, mostly by fighting wars as it turned out. Three hundred years later, religion was of reduced importance, kings were nearly irrelevant, but the issue of an international currency continued to fragment European harmony.
The quantity of gold within a nation roughly matched its economic prosperity, and ways had been devised to inhibit it from migrating while the trade it symbolized was encouraged to move around. The King controlled paper money (or any other surrogates for gold serving as public-owned instruments of trade), within and between nations. Meanwhile, the quantity of gold remained fixed and "owned by the King" until some form of "squaring up" took place. There were two disadvantages: prices were suppressed by the fixed value of gold, as before. But periodically new gold was discovered in the ground or conquered in wars in a haphazard (non-trade, non-economic) way. In particular, two Twentieth century world wars disrupted the roughly fixed relationship between the King's possession of gold and the public's economic health. The United States eventually found itself with practically all the world's gold in 1945, so nobody else could buy anything from us. That was carrying theory to the point of paralysis.
The Bretton Woods Conference did supposedly devise a patchwork substitute, but the seeds were sown for eliminating the gold standard. In its place was put a system of national central banks, trading through the International Monetary Fund, which used a super currency called International Trading Receipts to square up national accounts. Freed of the gold restraint, there might emerge a gradually enlarging currency pool as the populations grew and supposedly shrink during international recessions. This arrangement supposedly solved the inflexibility of gold. However, without a metallic currency standard, nations found various ways to cheat, just as kings had historically found ways to cheat on gold. Inflation resulted, the power of treaties was always less than the political power of the state, the independence of central banks was eroded, and small, steady but relentless inflation resulted. That brings us to the present: we have no gold standard, but the various world economies are periodically on the edge of war about international trade. Inflation seems less threatening than war, so the balance between inflation and war calls the tune in the monetary trade dance hall. The public does not understand, but is restless about the future, as it well might be. At the moment, a huge proportion of the world in the third world have become economic factors, while retaining pre-1648 tribal patterns rather than becoming nations of boundaries. "Floating" currencies address this problem, somewhat at the expense of dependable trade relationships, and possibly the third world.
We now propose to interpose the Health Savings Account concept into this precarious arrangement. To do so, we minimize medical features and expand currency ones. Background features like index investing and individual ownership become vitally prominent, while health yields importance to demographics. But the ideas of tax exemption and equity investing are expanded to meet the changed focus on trade. Eventually, the evolution from a Health Savings Account to a monetary standard becomes obscured. But it is substantially based on the same approach. There are two alternative approaches available. Either substitute the index funds backing HSAs for metallic monetary standard or else substitute the same sort of paper for the International Trading Receipts now used for trading between nations at the International Monetary Fund. One would replace the Federal Reserve's system of adjusting the paper value of a nation's currency, relative to its nation's economy. That would center the nation's money supply on the size and health of its economy, and work better as a medium of exchange.
The other would substitute the same paper for the International Monetary Fund's (IMF's) Special Drawing Rights, hoping to regulate the long-term store of value function by having long-term money come closer to representing real underlying values, as assessed by its trading partners. Both such changes would involve a change of power, and so would be opposed by successfully constructed power centers. Even in a crisis, these centers would attempt to maintain their control. So they must be described as anticipating a crisis, possibly one which might never occur. They would serve notice on both incumbent power centers that alternatives have been prepared in case they fail, and perhaps improve their performance to prevent failure.
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.
