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.
History Footnote: Before the white man came, the Iroquois "nation"devised rules still characteristic of our modern political parties. At various times, there were five, six, or seven tribes in the Iroquois confederacy headquartered in upstate New York, allied to each other with fluctuating loyalty. Philadelphia's tribe were Delawares or Leni Lenape, but the most warlike and dominant tribe were the Mohawks. Confederations work best when allied against a common foe. The rest of the time, member tribes mostly beat and cheat each other.
The Philadelphia Democratic Party appeals to a number of minority groups and recent immigrants, but it is more meaningful to think in terms of players. For example, university professors are mostly Democrats, but the teachers union is an active political player. Minorities generally vote Democratic, but the Black Ministers are players. Lawyers are rather evenly divided between Republicans and Democrats, but Plaintiff Trial Lawyers, the ones who sue people for a share of the award, are players.
Some people are players but keep it quiet. Certain rich donors are players but don't want to be known as such. The chiropractors and optometrists claim to be players but would rather not have the truth known. The news media and utility companies come close to denying they are players in spite of abundant evidence otherwise.
Well, the local players had a war dance just before the November 2005 elections; the timing was no accident, and it was publicly described as a SEPTA contract negotiation. The issues had mostly been settled in advance, but the real deal-breaker was health benefits, Blue Cross health insurance paid by the employer to escape income tax and to make the pay packet appear smaller to the taxpayers. Step by step for twenty-five years, employers in the form of the Republican politicians had been keeping up a steady drumbeat, trying to reduce the incentive to overspend health insurance because it seemed free, with resulting increase in employer costs. Slowly, business management convinced a majority of the public that "first-dollar coverage" was a villain, since the person covered by the insurance has no skin in the game. Even party loyalists had to admit that it looked as though the tax exemption of health insurance was injuring the image of labor. That concept carried the slogan of "sending jobs to China", or killing the goose that lays golden eggs in the Rust Belt. Five million Health Savings Accounts were sold in 2005 in spite of state laws hampering this form of health insurance, and from experience it seemed certain that five times that many would be sold if early-adopters reported satisfaction. The surrogate was deductibles and employee contribution to health insurance; just about everybody recognizes the need to make some token contribution to health insurance in order to have skin in the game and keep costs down. But not the SEPTA workers. In 2005, the brotherhood of Septa workers would go on strike for fifty days rather than pay one penny of "give-back" for health insurance. Their energy level was high, they were waving their arms, they were ready to overturn ashcans.
Bellevue
When union contract negotiations go on for days, all day, the public gets an idea the negotiating table is a shouting match the whole time, with "negotiators" carrying on with tom-toms and tomahawks in an even more physical and extreme model for their supporters on the street corners. For about ten minutes a day, that's true. But then the television people can turn off their lights and the war hawks fan out to talk with their supporters outside the room, which in this case happened to be in the Bellevue Stratford Hotel. Perhaps you didn't know the Pennsylvania Governor has quite a nice set of offices there. Perhaps you haven't noticed that all the parking spaces on the side alleys near the Bellevue "belong" to various politicians. Just try parking there yourself to learn a few facts of Philadelphia life.
In negotiating classes, they teach you never to make the first concession. By that reasoning, no negotiation would ever end. The more practical advice is to forget about any serious bargains until the last day of the contract, or even a couple of days after that. The hard reality is that no one will make a concession while there is time for some invisible player to back out; no one wants to give his constituents time to realize he has sold out their trust or violated their loud, insistent, wholly unrealistic demands. And so in 2005, after the shouting had gone on for some time, and even a real strike began, the Governor finally sauntered into his nice Philadelphia office. Time to get to work.
Ed Rendell
Those who didn't know him made the comment they could almost believe he was a victim of Attention Deficit Disorder. He talked all the time, moved all the time, and apparently showered all the time. That is, he was in and out of sight all night, but invariably reappeared with fresh shirts, clean shaves, and sharp creases. His aides confided he wasn't very good at "detail work", which is to say he conducted the whole affair on a primeval level of dominance, bluster, charm and implied threat. Don't bother me with facts. Mayor Street, on the other hand, would come in and mumble something incoherent, and then had to leave for an important engagement. Word came in that the school teachers felt they really had to pay a small health insurance deductible, and it wasn't so bad. Foo, no guts.
Somewhere along the line, the newspapers started to echo that deductibles had their merits. Foo, bunch of Communists. The black ministers were reported to feel that if their people all had to pay deductibles, why couldn't the transit workers. Bah, bunch of muddleheads. In the hubbub, someone asked what Andy Stern thought. The trial lawyers didn't have as much to say as they once did; SEPTA had reduced liability costs by $87 million through adamantly refusing to settle any case without going to court. Paper tigers. What about chiropractic benefits, we demand the inclusion of chiropractic benefits. No, said SEPTA, we aren't going to agree to any of that sort of thing. Well, what about twenty visits a year to chiropractors?
One by one, the other players deserted the SEPTA workers. The message from the other tribes in the confederation seemed to be, get what you can for SEPTA, but stop the strike by election day. The Governor produced the razzle-dazzle, a loan to the city to pre-pay the Blue Cross premium, in return for which Blue Cross would reduce the premium. The effect of that was to produce enough cash to appear to add ten cents an hour to the pay packet. We'll have to wait a year to see how this money gets restored to Blue Cross, but that's the general idea.
The strike was over, hurray. The next day, the Democrat party elected Democratic governors in New Jersey and Virginia, defeated some California amendments which would have hurt the trial lawyers and teachers unions. Surely, someone in the Democrat party nationally was telling himself that caving on the Philadelphia transit strike was a small price to pay for that.
Robert Matsey, the director of Executive Fitness at the Union League, recently entertained the Right Angle Club with a discussion of new trends in muscle building. Which is to say the old theory of Dynamic Tension, as featured in adolescent magazines by Charles Atlas, is being superseded by platform stabilization, a much more popular approach among senior citizens. Since a few members of the club are already in the Medicare age range, and more are approaching it with concern, the talk was greeted with great interest.
Personal Trainer
Bob Matsey has a degree in marketing, so it all comes down to this: the more powder you use in a cannon, the bigger the bang it makes. But if said cannon is sitting in a canoe, the extra gunpowder doesn't add much firepower. The new approach stabilizes the platform to magnify the cannon power, without paying so much attention to adding directly to the gunpowder. No one said that weight lifting and pushups don't bulk up your muscles; but if you want to climb stairs and lift things, it will get you farther to stabilize the pelvis and shoulder girdle than to split your seams with muscles that can't do much. Or, worse still, that will lead you to throw out a lumbar disc -- or a cervical one -- struggling to perform a simple task. All of which leads to a complicated discussion of the function of the hamstring muscles of the back of the thigh, which is mainly to overcome the inappropriate architecture we inherited when we became two-legged animals. And, as well, to overcome the tendency of a young straight back to curl up with age and inactivity, and press your nose toward the ground. One of the main causes of back pain can be traced to shortened tight hamstrings, a condition which destabilizes the platform of the pelvis.
Sitting down is the great enemy of posture and bearing; fifty years of it leads straight toward turning a former soldier into a skinny old geezer. Sitting down to a dinner table turns people into fat old geezers, deep inside which is a skinny geezer hidden by the fat.
Muscles
Every medical student is puzzled to learn that most energy expended by muscles is used to lengthen, not shorten, muscles. Without getting into the biochemistry of this issue, it can be taken to explain the tendency of muscles to shorten up when under-used. And, in turn, explains why stretching works a lot better than "bodybuilding" against a resistance. It thus may help to understand why it is sometimes easier for skinny old retirees to re-build their muscles into proper balance and coordination, essentially training infantile muscles to work together in the right way. Those who have struggled to "work through the pain" may actually reinforce bad coordination and will require still more sweat on the brow to force things to work the right way all over again. For example, there are two kinds of hamstring muscles, short ones, and long ones. The short ones stabilize the pelvis, but if you whip things into obedience, you may be improperly recruiting the long hamstrings to act as stabilizers, making you in effect "uncoordinated" and awkward. RNT stands for reactive neuromuscular training, a process which amounts to improving a muscular coordination flaw by forcibly exaggerating it. The scientific basis for this jargon is a little hard to follow, but it does soon become very clear that RNT is quite uncomfortable. It makes a sort of argument for a compulsory draft into the armed forces at an early age, to beat bad muscle coordination out of the whole public at an early age, before they start sitting themselves to death in front of a computer.
A great deal of emphasis nowadays is placed on gluteal strengthening, a sort of unnatural posture training which can, unfortunately, be easily dismissed as worthless. In the spirit of defending this particular fitness training, a lady at a nearby table in a fancy restaurant was heard to exclaim to her luncheon partners, "What I mind most about growing old is that I have lost my ass!" Since obviously, this particular disability is great to be avoided, get some gluteal training, ladies.
Along the same lines, the economics of fitness centers was recently explained with considerable seriousness, but not by Robert Massey, who disassociates himself firmly. The trick, explained the outside expert, is to get people to sign up for a whole year of training when they first come in, full of enthusiasm. Since most of them will drop out of attendance after a couple of weeks, it is possible to show quite a profit running a fitness center with hardly anyone showing up.
And finally, Tom Hawes, former president of the Right Angle, rose to link this discussion with the current debate about health care reform Relating how an elderly couple in Florida went to a physician specializing in sex counseling, asked him to observe their technique and comment on it. He later told them their technique was surprisingly good, and he had no recommendations. The charge for this service was $50, readily agreed to. Nevertheless, they returned with the same request three more weeks in a row, until the doctor asked them what they expected to learn from all this. "Oh, that's not the idea. She's married, and I'm married, so we can't go home. The hotel charges $100 and you only charge $50. "
"But the beauty part is, that Medicare reimburses us $43."
Digby Baltzell (writing in Puritan Boston and Quaker Philadelphia) uses the reputation of President James Buchanan among historians as an example of how poorly Quaker Pennsylvania compares with Puritan Massachusetts, which had four Presidents, all of the men of great stature, while Pennsylvania only had poor Buchanan. To a loyal Pennsylvanian, that's irritating talk, and to it must be added, the only national monument to Buchanan had to be paid for by his own niece, Harriet Lane; construction of even that dinky statue was held up nearly a century by his detractors. It sits in Meridian Hill Park in Washington DC, right next door to where I lived for two years while working at the National Institutes of Health. It seems a little like a personal insult to my little children who played there, that some group or other of historians talk unpleasantly about Pennsylvania's only President.
Buchanan started political life as an elected Federalist, so he seems unlikely to have been secretly sympathetic with secession. A quick look at the map of electoral voting in 1856 shows it was a three-way election, with the peculiarity of the anti-immigration (Know-Nothing) party removing the western part of the country from contention. Essentially, the election was evenly divided between the abolitionist Republicans in the North and the slave states of the South. Swing Pennsylvania and New Jersey toward one side or the other, and you win the election. Buchanan's attraction as Pennsylvania's favorite son won him the Democrat nomination, and hence the election. It's pretty clear that Buchanan politically did owe the South, big-time.
Meridian Hill Park in Washington DC
That doesn't necessarily make him pro-slavery, but it surely means the South thought he was their best choice. The reasons behind that trace back to his activities on behalf of annexing Cuba while he was Minister to Great Britain. Cuba was bankrupt and having revolutions, and Spain itself wasn't much more effective. These arguments were persuasive to Republicans forty years later when Teddy Roosevelt led the charge and McKinley provided the dubious pretext of the explosion of the battleship Maine. Underneath these jingoist pretexts, the real disputes about Cuba were the Manifest Destiny argument (The United States ought to absorb the whole Caribbean region), and the likelihood that Cuba would be a slave state. The United States House of Representatives had become hopelessly abolitionist as a result of European immigration, so the main hope of the South to stave off abolition of slavery rested with increasing its strength in the U. S. Senate. So the North was favorable to annexing Cuba for Manifest Destiny reasons, while the South was also in favor because of the Senate issue. Buchanan as a politician probably didn't have much trouble seeing himself as a hero by promoting the annexation of Cuba, by force if necessary. The South meanwhile made a decision to seek Senate votes in Kansas and Missouri, since to do so fitted in with another strategy of using their Congressional influence to weaken the military strength of the United States, since that would, of course, be used against them if it came down to a war of secession. It also made a Cuban conquest somewhat more dubious, but in politics, you always have to make choices.
Although it is not much mentioned by historians, that hidden second strategy did, in fact, work out for them. When poor Buchanan got elected and struggled to maintain peace, he found he lacked the military strength to make threatening noises, and indeed General Winfield Scott had to warn him against transferring troops to defend the installations at Fort Sumpter and other Southern locations. This weakening of Union strength is also a largely unmentioned factor in the miserable early performance of the Union armies, early in the Civil War.
Electoral Vote 1856
Both the Abolitionists in the North and the Pro-slavery conspirators in the South presented a vexing pattern of intransigence to the beleaguered Democratic President; after all, they were still American citizens and voters. Although Lincoln in 1860 was not nearly so mindless as many of the other Abolitionist leaders, he was running for President with a clearly anti-slavery program. John Brown was starting insurrections. Whether the Southern hot-heads would blink at the last moment was not clear, but while the pressure on them was that time was running out for their cause, a President mostly elected with their votes still posed an issue that had to restrain them. Time seemed to be on the abolitionist side; no one ever suggests that we would still have slavery in 2011 if there had been no Civil War. If everyone had known we would have 600,000 deaths in that war, the alternative of playing for time would not have seemed so timid.
History is written by the victor, as they say. And then there is the Henry Ford theory of history. Some parts of it, at least, are bunk.
Start by looking at what happens if you increase the interest rate from 5% to 12%, or if you lengthen life expectancy from age 65 to age 93. Stretch the limits to see what stress will do. For example, increasing the interest rate to the edge of believable gets your balance to a couple of million dollars amazingly quickly, while lengthening the time period (for that interest rate to work) even further enhances that gain. The combination of the two easily escalates the investment above twenty million. Because we are only trying to get to $350,000, reaching it suddenly seems believable.
The combination of extra time plus extra interest rate holds out a theoretical promise of paying for a lengthening lifetime of medical care, in spite of medical cost inflation. Present realities don't quite stretch that far, but finding some way to reach that level is not hard to imagine. In fact, it gets the calculation to giddy amounts so quickly it engenders suspicion, to which one answer is, we probably don't need anything like twenty million. The actuaries at Michigan Blue Cross, verified by the Medicare agency, estimate average lifetime health costs to be around $350,000 per lifetime. That's just a guess, of course, but increasing interest rates and life expectancy just a little could reach that minimum requirement. How do we go about it, and how far dare we go?
Some very credible theories sometimes disappoint us. Remember, our whole currency is based on the notion of the Federal Reserve "targeting" inflation at 2%, but in spite of spending trillions of dollars, they sometimes seem unable to achieve that target. We had better not count on schemes which require the Federal Reserve to target interest rates, because sometimes, they can't. On the other hand, if a vast army of smart people set about to nibble at various small increases in interest rates and longevity, perhaps they can make serious progress.
One person who does have practical control of the interest rate an investor receives is his own broker. For a full century, Rogen Ibbotson has published the returns on various investments, and they don't vary a great deal. Common stock produces a return of between 10% and 12.7% in spite of wars and depressions; if you stand back a few feet, the graph is pretty close to a straight line. If you search carefully, a number of brokerages offer Health Savings Accounts which produce no interest at all -- to the investor -- for the first ten years. Try earning 2% during inflation of 2%, and see what it gets you. In ten years, that approaches a haircut of nearly 100%, explained by the small size of the accounts, and by the fact that experienced customers who know better, just look for other vendors. Since the number of Health Savings Accounts has quickly grown to be more than ten million, it's time for some consumer protection. The prospective future size of these accounts should command much greater market power, quite soon. After all, passive investment should mainly involve the purchase of blocks of index funds, with annual fees of less than a tenth of a percent. Most of this haircutting is explained by the uncertainties of introducing the Affordable Care Act during a recession, and taking six years to get to the point of a Supreme Court Test to see if its regulations are legal and workable.
That's the Theory. If Necessary, Settle for Less. The rest of this section is devoted to rearranging healthcare payments in ways which could -- regardless of rough predictions -- outdistance guesses about future health costs. When the mind-boggling effects are verified, skeptics are invited to cut them in half, or three quarters, and yet achieve roughly the same result. The purpose is not to construct a formula, but to demonstrate the power of an idea. Like all such proposals, this one has the power to turn us into children, playing with matches. By the way, borrowing money to pay bills will conversely only make the burden worse, as we experience with the current "Pay as you go" method. By reversing the borrowing approach we double the improvement from investment, in the sense we stop doing it one way and also start doing the other. In the days when health insurance started, there was no other way possible. The reversal of this system has only recently become plausible, because life expectancy has recently increased so much, and passive investing has put the innovation within most people's reach. The environment has indeed changed, but don't take matters further than the new situation warrants.
Average life expectancy is now 83 years, was 47 in the year 1900; it would not be surprising if life expectancy reached 93 in another 93 years. The main uncertainty lies in our individual future attainment of average life expectancy, which we will never know, but probably could guess with a 10% error. When the future is thus so uncertain, we can display several examples at different levels, in order to keep reminding the reader that precision is neither possible nor necessary, in order to reach many safe conclusions about the average future. Except for one unusual thing: this particular trick is likely to get even better in the future because people will live longer. Even so, it is better to do a conservative thing with a radical idea.
Reduced to essentials for this purpose, today's average newborn is going to have 9.3 opportunities to double his money at seven percent return and would have 13.3 doublings at ten percent. Notice the double-bump: as the interest rate increases, it doubles more often, as well as enjoying a higher rate. If you care, that's essentially why compound interest grows so unexpectedly fast. This double widening will account for some very surprising results, and it largely creeps up on us, unawares. Because we don't know the precise longevity ahead, and we don't know the interest rate achievable, there is a widening variance between any two estimates. So wide, in fact, it is pointless to achieve precision. Whatever it is, it's going to be a lot.
One Dollar: Lifetime Compound Interest, at Different Rates
Start with a newborn, and give him one dollar. At age 93, he should have between $200 (@7%) and $10,000 (@10%), entirely dependent on the interest rate. That's a big swing. What it suggests is we should work very hard to raise that interest rate, even just a little bit, no matter how we intend to use the money when we are 93, to pay off accumulated lifetime healthcare debts. Don't let anyone tell you it doesn't matter whether interest rates are 7% or 12.7%, because it matters a lot. And by the way, don't kid yourself that a credit card charge doesn't matter if it is 12% or 6%. Call it greed if that pleases you; these small differences are profoundly important.
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If that lesson has been absorbed, here's another:
In the last fifty or so years, American life expectancy has increased by thirty years. That's enough extra time for three extra doublings at seven percent, right? So, 2,4,8. Whatever amount of money the average person would have had when he died in 1900, is now expected to be eight times as much when he now dies thirty years later in life. And even if he loses half of it in some stock market crash, he will still retain four times as much as he formerly would have had, at the earlier death date. The reason increased longevity might rescue us from our own improvidence is the doubling rate starts soaring upward at about the time it gets extended by improved longevity. In particular, look at the family of curves. Its yield turns sharply upward for interest rates between 5% and 10%, and every extra tenth of a percent boosts it appreciably.
Now, hear this. In the past century, inflation has averaged 3%, and small-capitalization common stock averaged 12.7%, give or take 3%, or one standard deviation (One standard deviation includes 2/3 of all the variation in a year.) Some people advocate continuing with 3% inflation, many do not. The bottom line: many things have changed, in health, in longevity, and in stock market transaction costs. Those things may have seemed to change very little, but with the simple multipliers we have pointed out, conclusions become appreciably magnified. Meanwhile, the Federal Reserve Chairman says she is targeting an annual inflation rate of 2% of the money in circulation; the actual increase in the past century was 3%. If you do nothing at 3%, your money will be all gone in thirty-three years. If you stay in cash at 2%, it will take fifty years to be all gone.
But if you work at things just a little, you can take advantage of the progressive widening of two curves: three percent for inflation stays pretty flat, but seven percent for investment income starts to soar. Up to 7%, there is a reasonable choice between stocks and bonds; but if you need more than 7% you must invest in stocks. Future inflation and future stock returns may remain at 3 and 7, forever, or they may get tinkered with. But the 3% and 7% curves are getting further apart with every year of increasing longevity. Some people will get lucky or take inordinate risks, and for them, the 10% investment curve might widen from a 3% inflation curve, a whole lot faster. But every single tenth of a percent net improvement will cast a long shadow.
But never, ever forget the reverse: a 7% investment rate will grow vastly faster than 4% will, but if people allow this windfall to be taxed or swindled, the proposal you are reading will fall far short of its promise. Our economy operates between a relatively flat 3% and a sharply rising 4-5%. In other words, it wouldn't have to rise much above 3% inflation rate to be starting to spiral out of control. Our Federal Reserve is well aware of this, but the public isn't. A sudden international economic tidal wave could easily push inflation out of control, in our country just as much as Greece or Portugal. As developing nations grow more prosperous, our Federal Reserve controls a progressively smaller proportion of international currency. Therefore, we could do less to stem a crisis that we have done in the past.
To summarize, on the revenue side of the ledger, we note the arithmetic that a single deposit of about $55 in a Health Savings Account in 1923 might have grown to about $350,000 by today, in the year 2015, because the stock market did achieve more than 10% return. There is considerable attractiveness to the alternative of extending HSA limits down to the age of birth, and up to the date of death. It's really up to Congress to do it. If the past century's market had grown at merely 6.5% instead of 10%, the $55 would now only be $18,000, so we would already be past the tipping point on rates. In plain language, by using a 10% example, $55 could have reached the sum now presently thought by statisticians -- to be the total health expenditure for a lifetime. But by accepting a 6.5% return, however, the same investment would have fallen short of enough money for the purpose. Like the municipalities that gambled on their pension fund returns, that sort of trap must be avoided. Things are not entirely hopeless, because 6.5% would remain adequate if our hypothetical newborn had started with $100, still within a conceivable range for subsidies. But the point to be made provides only a razor-thin margin between buying a Rolls Royce, and buying a motorbike. If you get it right on interest rates and longevity, the cost of the purchase is relatively insignificant. That's the central point of the first two graphs. For some people, it would inevitably lead to investing nothing at all, for personal reasons. Some of the poor will have to be subsidized, some of the timid will have to be prodded. This is more of a research problem than you would guess: a round-about approach is to eliminate the diseases which cost so much, choosing between research to do it, or rationing to do it. Right now we have a choice; if we delay, the only remaining choice would be rationing.
Commentary.This discussion is, again, mainly to show the reader the enormous power and complexity of compound interest, which most people under-appreciate, as well as the additional power added by extending life expectancy by thirty years this century, and the surprising boost of passive investment income toward 10% by financial transaction technology. Many conclusions can be drawn, including possibly the conclusion that this proposal leaves too narrow a margin of safety to pay for everything. The conclusion I prefer to reach is that this structure is almost good enough, but requires some additional innovation to be safe enough. That line of reasoning will be pursued in Chapter Fxxx.
Revenue growing at 10% will relentlessly grow faster than expenses at 3%. As experience has shown, it is next to impossible to switch health care to the public sector and still expect investment returns at private sector levels. Repayment of overseas debt does not affect actual domestic health expenditures, but it indirectly affects the value of the dollar, greatly. Without all its recognized weaknesses, a fairly safe description of present data would be that enormous savings in the healthcare system are possible, but only to the degree, we contain next century's medical cost inflation closer to 2% than to 10%. The simplest way to retain revenue at 10% growth is by anchoring the price leaders within the private sector. The hardest way to do it would be to try to achieve private sector profits, inside the public sector. This chapter describes a middle way. Better than alternatives, perhaps, but nothing miraculous. For the full whammy, you will have to read chapters Three and Four.
Cost, One of Two Basic Numbers. Blue Cross of Michigan and two federal agencies put their own data through a formula which created a hypothetical average subscriber's cost for a lifetime at today's prices. The agencies produced a lifetime cost estimate of around $300,000. That's not what we actually spent because so much of medical care has changed, but at such a steady rate that it justifies the assumption, it will continue into the next century. So, although the calculation comes closer to approximating the next century, than what was seen in the last century, it really provides no miraculous method to anticipate future changes in diseases or longevity, either. Inflation and investment returns are assumed to be level, and longevity is assumed to level off. So be warned. This proposal, particularly with merely an annual horizon, proposes a method to pay for a lot of otherwise unfunded medical care. The proposal to pay for all of it began to arise when its full revenue potential began to emerge, rather than the other way around. If the more ambitious second proposed project ever works in full, it must expect decades of transition. Perhaps that's just as well, considering the recent examples we have had of being in too big a hurry. Rather surprisingly, the remaining problem appears mainly a matter of 10-15% of revenue, but all such projection is fraught with uncertainty.
Revenue, The Other Problem. The foregoing describes where we got our number for future lifetime medical costs; someone else did it. Our other number is $132,000, which is our figure for average lifetime revenue devoted to healthcare. That's the current limit ($3300 per year of working life) which the Congress itself applied to deposits in Health Savings Accounts. No doubt, the number was envisioned as the absolute limit of what the average person could afford, and as such seems entirely plausible. You'd have to be rich to afford more than that, and if you weren't rich, you would struggle to afford so much. To summarize the process, the number was selected as the limit of what we can afford. If it turns out we can't afford it, this proposal must somehow be supplemented. The provision made for that predicament is we will then have to jettison one or two major expenses, the repayment of our foreign debts for past deficits in healthcare entitlements, or the privatization of Medicare. That would leave us considerably short of paying for lifetime health costs, but it might actually be more politically palatable. It's far better than sacrificing medical care quality, at least, which to me is an unthinkable alternative, just when we were coming within sight of eliminating the diseases which require so much of it.
The cost of retirement living is probably already larger than the average lifetime cost of healthcare, or about $350,000. That's almost the same as saying nobody but a millionaire has a chance. But longevity is constantly lengthening, and healthcare will probably get cheaper eventually. So right now, retirement at $35,000 a year for 20 years is twice as expensive as healthcare, retirement at age 60 for 40 more years would cost four times as much as healthcare. Somewhere along the line, someone will suggest we make healthcare a minor component of retirement costs and roll the two together to save administrative costs. By that time, I expect healthcare to be largely an experience of retired people, anyway. With half the nation retired, the architects will have to design housing for that expectation. But the greatest challenge will be to find something for those people to do with their time. It might as well be -- it almost has to be -- something remunerative. Even assuming unlimited wealth, it's pretty hard to imagine people going on four ocean cruises a year, year after year. Or playing eighteen holes of golf, six days a week. I've known a few people who did things like that, but it's hard to imagine a whole nation doing it. And out of that synthesis will come some way to pay for retirement, including healthcare.
Buy and Hold.
Don't pay high fees.
6% Returns or Know the Reason.
The alternative is to have no money. Alternatives to watching television aren't attractive, and in fact, they aren't much different from going to jail, except it is reported it costs more to be in Leavenworth than to go to Harvard. It's sixty or more years into the future, so it isn't my problem to re-design a civilization to fit its coming demography. All I can do is mention that having a regular check come in, won't be enough to occupy the time of half the country, so they better get started, developing something else. Meanwhile, here's how to arrange to get that check
For most of the past decade, saving for a rainy day has been in an interest-rate environment which made the usual saving process almost useless. Let's compare today with a generation ago. When my mother died at the age of 103, she had been living for decades on her savings account at the bank, with certificates of deposit and interest rates which were quite generous. She had a few stocks, but interest on fixed-income sources was the main thing, not just for her but for all the elderly folks in her generation. Well, for nearly a decade things have been entirely different for investors. The government has been trying to fight a recession with zero interest rates, and the Federal Reserve has accumulated trillions of dollars worth of bonds it will someday try to sell. Much of this has been financed artificially in ways most of us could not possibly understand, but we do understand two things:
1. A lot, if not most, of this maneuvering, has been at the expense of old folks. They were taught to depend on a fixed income, but interest rates right now are smaller than the rate of inflation, while the price of bonds has been driven high by the government owning trillions of them. They threaten to crash if things go back to normal, so somebody wants them to remain low. The Chairman of the Federal Reserve wants to be calm and reassuring, but essentially admits she isn't certain what to do.
2. When the Federal Reserve starts to raise interest rates back to normal, it will sell bonds, perhaps trillions of them. The bond market may not plummet immediately, but only if the Federal Reserve makes spelling mistakes. Cash may be king in this situation, but only if investors don't freeze, like deer in the headlights..
So, It's a little hard to imagine buying bonds, living on bank accounts, or doing most of the other things we watched our parents do with great success. That would include Health Savings Accounts, wouldn't it? No, it wouldn't. The HSA is a good place to buy common stocks, and the best of all places to park your spare cash. You can invest in anything you please with HSA, with or without coupons, because a tax-free account doesn't care about tax consequences. If your HSA has any limitations to what you can do, it must be caused by your broker or your advisor, not because the HSA program gets in the way. Overfunding the HSA account is always a good alternative, although mostly a passive investment in a low-cost index fund of the entire American market will work out better. Let's put it this way: if you start investing when you are fairly young, you will probably come out well enough. If you start investing when you are nearing retirement age, you had better be lucky, because you won't have time to ride it out.
1. The first weapon you will have is compound interest. It has great power because its secret is its effective interest rate rises at the far end. A small amount early in life is better than a big amount near the end, but any time is better than never. The tax-exempt feature is a treasure. Thirty years extra longevity this century extend it longer, and longevity continues to increase. But remember this: the net income must be larger than the rate of inflation. If you don't know the rate of inflation, just guess it is 3% a year.
2. The second weapon is passive investing. Don't try to beat the market, just try to equal the market, and you will eventually get where you are going. But don't pay high fees. Lots of brokers have great track records until you subtract their fees. In fact, it is probably impossible to have a great record unless you charge low fees. Instead, buy an index fund of the entire U.S. Stock market, and act like you forgot you have it. And don't establish a Health Savings Account with the first agent you happen to meet. I once overheard my mother advising my daughter, "Don't marry the first man who asks you."
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.
