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
... William Penn's Quaker Colonies
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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.
Banking is a comparatively recent invention; in its present form, it's only a couple of centuries old. Paper certificates circulated as money, representing precious metals like gold and silver in the bank vaults, eventually concentrated in Fort Knox as Federal Reserves. When the economy grew faster than the supply of gold, silver was also monetized, then diluted by only partial reserving. Finally a couple of decades ago we abandoned precious metal reserving entirely, and resorted to partial reserving leveraged to a virtual concept known as Federal Reserves whose quantity depended on the behavior of American inflation. Almost the whole world soon depended on the American Federal Reserve to stand behind its virtual dollars, formerly redeemable in gold or silver, but now based on inflation targeting. That is, the Fed sets a target of something like 2% inflation a year, and either absorbs currency or floods the world with currency, sufficient to maintain a steady match to the target. It's a little uncomfortable to see the standard of measurement shifting, from inflation as most people understand it, to "core" inflation, which subtracts the cost of food and oil. Especially oil. It's additionally disquieting to realize that the Fed is dependent on its own computers, reading other people's computers, all subject to the frailties of computers. to determine the degree of match to the target. We sort of got into this fix because the supply of precious metals was inelastic; perhaps the present expedient could become a little too elastic because it is so heavily dependent on vast streams of computerized information. Garbage in, garbage out?
Federal Reserve Bank
Meanwhile, banks simply had to surrender to the obvious efficiencies of using electronic stored-program calculators. Paper checks, canceled checks, and bank tellers are consequently disappearing. Banks themselves are disappearing, as anyone can see by looking at the abandoned stone tombs on America's main streets. At the moment, the process is one of concentration of smaller banks into bigger ones; eventually, there will be some kind of transformation of the way they conduct business to a point where banking could effectively disappear. Who needs banks, anyway? One significant answer to that question is that, the Federal Reserve Bank needs them. And the rest of us need the Federal Reserve because that's how the value of money is determined nowadays.
Federal Reserve
Customers, however, don't need banks for deposits; money market funds pay higher interest rates. There's no need for banks to provide loans; credit cards do that for small borrowers, while big borrowers float bonds through an investment banker. Bank vaults may be useful to store grandmother's pearl necklace, but no one needs vaults to store securities, which are now mainly held as bookkeeping entries in "street" name. People used banks for the origination of mortgages, but other institutions could serve as well. Anyway, home mortgage origination is what broke down in August 2007, when banks eluded Federal Reserve lending constraints by selling mortgages to subsidiary corporations they often owned. To repeat, we need banks because the Federal Reserve needs banks to control the currency, through regulating loan volume, which is achieved by regulating the number of reserves that banks are required to maintain. Reflect on how that matters to currency.
Before a bank makes a loan, only the depositor owns the money in question. After a loan is made, two people have a claim on the money, the borrower and the depositor. Although there is a fine distinction between money and credit, between money and liquidity, the real point is that making a loan effectively doubles the money. If a bank is then only required to keep half of its total loan volume in reserve, the money in circulation is multiplied four times what it was, and so on. Loan volume is also controlled by its scarcity value, which is indirectly affected by setting short-term interest rates. Unfortunately, cheaper money is worthless -- the dollar goes down in relation to the currency of the rest of the world. There are probably other ways which could be devised to control the currency, but a time of frozen credit markets is a dangerous time to consider radical changes in the currency. If the Fed is forced to make such changes, they had better be correct.
It's unfortunately also true that radical changes can only be made when people are scared stiff by a crisis. Is it entirely out of the question that we may soon need to scrap the Federal Reserve system? Just think back to the bitterness when Hamilton and Jefferson, later followed by Biddle and Jackson, fought about whether central banks were necessary at all. Or, more recently in 1913, when Wall Street and the Progressive movement fought about whether there was a need to create a Federal Reserve. Disputes about financial matters have been at the core of most political party disputes, since the founding of the Republic. Decisions made in the past have not always been the right ones. Nevertheless, since the banks anyway appear to be on a long slow slope to extinction as a result of the computers that briefly made them prosperous, maybe we should revise the way the Federal Reserve controls currency. Without the Fed to defend them, banks' prospects look bleak.
Rapid enrichment of the Asian poor is the most momentous event of world economic history. In a variety of leggings and blockings the Chinese Communist government held their currency (the yuan renminbi) at levels appreciably below true value in purchasing power and refused to let it float, thus augmenting cheap labor in selling goods abroad at low prices. Foreign attempts to share this wealth, particularly direct foreign investment in domestic Chinese businesses, were severely controlled. From China's viewpoint, the beneficial result was that foreign investors were prevented from upsetting the yuan by either gold-rush investing or suddenly withdrawing their money, as indeed they had done to many other developing countries, many times. However, artificial constraints channel economies into unexpected new directions. As an avowedly communist country, the profits of China's new prosperity could be held by the government, and an amazing 59% was actually held as "savings", with that government easily able to spend 10% of its gross domestic product buying U.S. Treasury bonds. Ultimately, China bought a trillion dollars of U.S. bonds.They got the bonds, we got the money. This flood of new money into the American economy lowered interest rates abnormally. The resulting low rates then stimulated reckless American borrowing, which found its way into a housing boom with cheap mortgages. The confused responses of America to this novel situation will be discussed later, but it must be remembered that both Japan and Germany have quite recently been almost equally single-minded in their export-driven policies. China is the biggest offender, but China will have important allies in the debate.
Chinese Factories
Abnormally low interest rates. In other circumstances, easy borrowing at low-interest rates might have stimulated business investment in plants and equipment, but American business was preoccupied with shifting domestic factory production abroad to enjoy abnormally low labor costs. The Chinese (and other export-driven nation) government for its part severely blocked direct foreign investment in Chinese factories. The ultimate unintended consequence of these primarily Chinese decisions could be stated thus: it stimulated an American housing boom at the expense of the Chinese peasantry. Things might have gone on to produce other results, but instead came to a sudden paralysis on August 9, 2007, when investors (probably using hedge funds) decided the credit markets had reached unsustainable tension and started selling in large volume. Somehow, this somehow had to do with the American mortgage industry going haywire, because almost everyone suspected that was the case. We now focus on how mortgages went haywire while remembering this was mostly a result of forced adaptations breaking under the external strain of too much easy credit coming from abroad. If it hadn't mortgaged, it probably would have been something else. But it was mortgaged.
American monetary authorities, committed to inflation targeting of short-term interest rates, were probably deceived by low long-term interest rates into believing the Far East Trade imbalances were not seriously inflationary, and might even be deflationary. To protect American banks from paying more for deposits than they could charge for loans, the Federal Reserve lowered short-term rates, which would definitely be inflationary. What happened to America was what happened to a hundred smaller countries; sudden withdrawal of foreign investment caused a recession. In our case, the foreigners did not actually withdraw their money. It was effectively frozen in place by funny business in our own special financial innovations, which we will now describe, growing out of the difficulty that just about anybody entitled to a mortgage already had one. Several steps removed from the commercial credit-paper problem that upset some insiders, panic in the stock market suddenly started on a nice summer morning. On August 10, 2007 the Dow Jones Industrial Average unexpectedly dropped 400 points in ten minutes. The trumpet had sounded.
The full history was of course vastly more complicated than this densely concise synopsis of it, so in fairness, a few main amplifications must be added. China, while large, represented only forty percent of the economies of the newly developing world. Neither Japan nor Germany is a third-world country, but they behaved the same way. Volatility in available reserves of Middle East oil contributed an independent bubble in the midst of the main (home real estate) one. Japan's long depression contributed to a diversion. The secondary economic powers, particularly in Europe, rushed in to imitate what seemed like a new financial paradise, making their resulting problem somewhat worse by having enough sophistication to dabble, but less than enough to cope with unprecedented volatility across national borders. There were also some moderate-sized wars in the Middle East and the usual amount of self-serving international politics. These things must be mentioned, but they are not significantly relevant to the unfolding of the main problem. Which was: A billion desperately poor people grew prosperous in less than a generation. Their government loaned their money to the rest of the world, who then enjoyed a revel of abundant cheap credit. The commotion found a weak spot in American home mortgages, bringing the world financial system to a humiliating halt for confusing but nontrivial reasons.
In theory, the world should now devise a more unified monetary system. It would certainly help to address the conflict between an internationalized economy and the traditionally heedless national control of local currencies. With urgency bred of crisis, a new international monetary system might emerge in time to be helpful with the coming recession. Smaller steps might be more achievable; the question is whether they will be adequate. Everyone's most pressing problem is to concentrate on patching together the American banking and mortgage system, possibly buying time to get the world to cooperate on broader issues. The miracle-maker who can devise the right monetary system, sell it to a suspicious world, and implement it in time to do some good -- would rightly deserve to be sainted.
Let's now tell the story of the unraveling of the American banking system. It's important to know where America stands if it is to exert world leadership.
The steepness of the federal interest rate curve on a graph -- three-month treasury bills pay less interest than ten-year government debt, with yields for intervening time durations sloping from low to high -- is all a carefully maintained function of the Federal Reserve. The slope of this curve in the newspapers quickly summarizes the current Fed policy. The Federal Reserve mainly controls the money supply by issuing or retiring short-term government debt; the effect upon supply by such action raises or lowers short-term rates, which in turn "changes the slope of the yield curve at the short end". The Fed ordinarily ignores the cost of longer-term debt, leaving that to be determined by the public bond markets. Less often, the Federal Reserve buys or sells long-term treasury bonds to modify long-term yields, or to adjust the international value of the dollar. By affecting rates at either end of the curve, change in the curve's slope is the result. Sometimes that's intended, and sometimes it just can't be avoided.
Because banks pay interest to depositors at around the short-term rate, while the same banks charge interest rates to borrowers at about the higher federal long-term rate, the current slope of the curve is said to be the main determinant of bank profits. In fact, banks charge whatever the market will bear, and their profitability mainly reflects the cost of the money, which the Fed has the power to set. Banks borrow short and lend long. If the Federal Reserve artificially cheapens costs for the banks, then bank profits get fattened by public subsidy. Of course, it works the other way as well; in a banking crisis, the yield curve can be forcibly steepened to rescue banks from failure, temporarily sacrificing ideal monetary levels for the purpose. For the most part, what's good for banks is good for the economy; but it turns out bank profits are artificially subsidized much of the time. This artificially widened yield curve eventually punishes retirees and other savers by lowering interest rates on their savings accounts, or else it could punish debtors by increasing the interest rate they pay on mortgages and other credit. For political reasons, the pain is usually shared among voting blocs. It can be argued this subtle subsidy of banks by the public creates the compensating benefit of economic stability despite occasional bubbles and recessions like the present one. However, the Federal Reserve system has operated for almost a century, revealing an enduring bias in favor of inflation, i.e, the subsidy of debtors by creditors. Present policy intentionally allows a steady rate of 2-3% inflation, and the century-long effect of such policy since 1913 has been to increase the price of gold from $17 to $900 an ounce. A penny then is a dollar now, making no allowance for income tax shrinkage of such fictitious gains. Overall, the effect of semi-stabilizing the yield curve is to reward banks and debtors, extracting this subsidy from creditors and retirees. To go a step further, independent of the Federal Reserve but by government action, retirees have been compensated in the past by unearned Social Security payments. The payment imbalance of the entitlement programs is admittedly about to shift in the other direction in a few years. All this is rough math, with many individual exceptions; but the initial effect of the Federal Reserve system is to benefit bank profits at the expense of creditors. If we assume creditors react by demanding higher interest rates to compensate for the cost, bank stability is being maintained by increasing interest rates by 2-3%, mostly paid for by borrowers.
Is this standardless monetary standard worth its inflationary cost? Compared with a strict gold standard, yes, it probably is. A limited supply of gold to support a constantly growing economy once led to deflation and economic instability and would do so again. An economy without a hard monetary standard responds to politics, is inevitably inflationary. The political independence of the Federal Reserve is dubious at best, and constantly under populist attack. So slow steady inflation seems to be one part of the system we can live with, in order to avoid either deep deflations or galloping inflations. Gradual low inflation may well be the best compromise we can devise, assuming the method of achieving it is otherwise tolerable. The 2008-2010 banking crisis, however, may be a moment of discovery that market systems must also be able to rely on the assumption that almost every bidder in an auction is limited by his pocketbook. When two or more determined bidders are eager to buy but unlimited in resources, price ceases to have restraining power and becomes irrational. A marketplace can tolerate a few bidding frenzies, but excessively flexible monetary systems lead to bubbles in small markets, explosions in big ones. Disregard of the price is particularly exaggerated by globalized trading systems, where customary prices are soon forgotten by abstraction within a virtual environment of essentially unlimited bidding power by essentially unlimited numbers of bidders. Forbidding to stop, all bidders but one must run out of discretionary money.
There is scarcely any need to list the uncertainties of planning for retirement. To make a precise number, you would have to know how long you expect to live, how much you need to spend, how much cash flow is assured, how much your stock portfolio will be worth, what the rate of inflation will be, and so forth, and so forth. When you get done listing all the things you have to know, the general tendency is to assume the task is impossible. It's hard, but it isn't impossible if you know a single number: the average growth rate you need to achieve, if you are going to be in exactly the same financial position on your 100th birthday, as you are today. In my own case, the answer is 1.5%. I have arranged my own affairs in such a way that if my stock portfolio maintains a 1.5% growth rate until I reach my 100th birthday, it should be worth the same as it is today, on that happy occasion in the future. So, having the magic number of 1.5%, let's work with it. By the way, that's net, net -- net of inflation , net of taxes.
Inflation is supposed to be targeted by the Federal Reserve at 2% per year. It wouldn't be wise to count on that, but taken at face value, I can still break even if the nominal portfolio growth rate averages 3.5%, a conservative figure net of taxes. Remember however, you have to pay taxes on any taxable investment expenses. If you sell appreciated stock to have cash for portfolio re-balancing, you probably must pay capital gains taxes, if you take a lot of dividend income you will have to pay standard income taxes on it, if you get a new investment advisor who charges a lot you will probably have to pay him extra for his alleged expertise. In other words, if you get careless in your investment choices, you could find it will require an increased average growth rate, possibly one that is impossible to achieve. But that's your problem, which in my case is 1.5% plus actual inflation, plus investment carelessness about advisors and taxes. Or personal carelessness about housing costs, travel, fancy automobiles, or fancy friends. it means I could achieve a more likely growth rate of 4.5% a year, keep it up until I'm a hundred, and still be approximately where I am today. It seems achievable.
In fact, as you grow older it is less important to preserve every bit of your assets for the inheritance tax bite on the day you happen to die; particularly since inheritance taxes can go as high as 50%, and you can tell yourself you are spending fifty-cent dollars. Estate tax issues are not today's topic, however. For retirement planning, you could take the ancient advice to "spend your last dollar on the day you die." To entertain this illusion for a moment, you can see how much extra you could afford to spend, by dividing your assets by your life expectancy. You can consider that your safety net, but many people would have to consider it a reality, so this is the rough calculation. If you can't afford to retire on that amount, you probably can't afford to retire. This last calculation gets pretty inaccurate unless you are within five, or at most ten, years of retirement.
So all you need for scaring yourself, or sinking back into complacency, is to calculate that growth factor. Please remember the assumptions you made, in compiling it. Essentially, you total up a year's expenses and a year's income; and subtract to determine how much you are saving, or drawing down your reserves. It seems best to list all of the expenses and income on scratch paper, since at first you will want to go over the whole list to see if the year you picked was truly representative. The first step is to purify the list of one-time or odd-ball expenses and income. The second step is to pick out the expenses which are truly frivolous, which you would quickly eliminate in an emergency of some sort; what are the core expenses, what is truly frivolous, and what is desirable but expendable in a pinch. On the income side, there are pensions and annuities which assure you of cash flow, no matter what. There may be a job you plan to quit, or a pension which won't start for a few years. These are the tools you can use, but the main thing is to get that number, the amount could easily be saving, or the amount you must draw down your assets. Notice that we are essentially ignoring how much your assets happen to be, disregarding whether they happen to be a lucky high number, or an ominously small one. Your goal is to see how much you are either adding to them or subtracting from them; the purpose is to try to project where that will go in the future. In addition, you might also project the gain in your portfolio, but it would require several years to be certain about that, and for now we can get along without it.
Now, project that net gain (or loss) to your hundredth birthday. You may live longer than that, but it isn't likely; and you might live less than that, but you won't care if there is money left over for your estate. You might use a computer program to do it, but computers work by a process of "iteration", which means doing the same calculation, over and over again. For this simple purpose, it will suffice to do it with a pencil and paper, because the chances are good that you can project some future events which will interrupt the smooth flow of estimating one year's income from investment, and adding it to the running total. You soon get to 100, even using the crudest arithmetic, and you soon arrive at the net annual gain or loss in your portfolio at age 100, assuming the present rate of growth. If you do this for a few years, your projection will get more and more precise. You now take this number and re-calculate it with a differing growth rate of the portfolio. Start with 6%, and calculate up and down, 8%, then 4%, then 10%, then 2%, then 12%, etc. You vary the growth rate in a systematic way, and watch to see what growth rate of your portfolio will leave you at age 100, with exactly what you have, today. That's the magic number you want to get, the gross break-even growth rate. If it's a positive number, it tells you what growth you have to achieve in your portfolio, and if it's a negative number, it tells you how much you could afford to squander, you lucky person, over and above your present standard of living.
But now you have to see what could upset your applecart, like inflation. Our Federal Reserve has an announced target of 2% inflation, per year. If that happens, which I rather doubt, I need to add 2% to my 1.5%, getting a "real" target of 3.5% growth in my portfolio per year. That's an approximation of how much my portfolio has to grow, just to stay where it is. In my opinion it's achievable, but events may prove otherwise. Investments which promise less than 3.5% are for me not likely to seem safe, they are losers. Investments which pay more than 3.5% are likely to generate funds I cannot live to spend, so they will only generate inheritance costs approaching 50%. So in that happy case, I could consider giving some away, to my heirs, or charities, or whatnot. On the other hand, some young fellow who is projected to need a portfolio growth of 20%, had better consider getting an extra job, or cutting down his expenses--because the history of investments shows that 20% is either totally unachievable, or else involves so much risk that you better not gamble on it.
There's one other thing you can do if you are old, or sick. You can divide what you have by the number of years in your life expectancy, and spend it down. The goal is to spend the last dollar on the last day of your life. I hope everyone understands how unlikely you are to pull that stunt off, but sometimes it has to be considered. Somewhat more realistic is to adjust your life expectancy in this calculation, from 100 down to whatever age seems more likely. And maybe you have to reduce your lifestyle. Otherwise, your best salvation is not from an investment advisor, but from a social worker.
Try it out. Estimate your required net portfolio growth rate, and then add in "what if". What if the stock market collapses, what if inflation goes to 25%, what if social security gets reduced or increased, what if you suddenly acquire a new dependent. The older you are, and the longer you accumulate your own personal financial data, the more accurate the calculation will be. But at any age and in almost any financial circumstances, fixing your attention on that single number will be a North Star, to navigate by.
John Maynard Keynes is said to have invented the discipline of macroeconomics about 1930 when he wrote a book "The General Theory of Employment, Interest, and Money". That he was brilliant had been established for decades, that he was invariably correct has been debated. In the final chapter of The General Theoryhe concluded that protracted low-interest rates would ultimately lead to a disappearance of the coupon-clipping rentier class. That is, that money would become so cheap that no one would pay to rent it.
Keynes know he could not predict wars and other shocking events, so he ventured no opinion about the timing of this cataclysm, but it is clear that signs of it are appearing sooner than he expected. The causes of this acceleration are mainly medical, including both a lengthening of longevity and an increase in the cost of achieving it. The best sign of a connection for non-economists lies in the transformation of implicit goals of the rentier class (undesirable) into prolonged retirement (desirable, possibly even unachievable.)
To every economist' surprise, inflation has not yet made an appearance, and inflation itself has made a reverse transformation, from confidently expected, to mysteriously missing from view. Von Hindenburg and Adolph Hitler may yet exchange positions of general esteem. But no matter how hard it tries, it appears as though the Federal Reserve cannot raise interest rates above 2% by inflating the currency. That's both a surprise and a discovery, that economics doesn't work in quite the way we thought.
A recent puzzlement has also arisen in the new instrument called a hedge fund. The purpose of this asset class appears to be to conceal the tax status of these assets until the last possible moment before the sale to a new owner. One may accept the division between "two and ten" as a permissible arrangement between buyer and seller, although it seems rather expensive. But the lock-in period seems to have the purpose of concealing its true nature from the taxman. While it is true that sales of Canadian forests may justify a long investment period, most hedge funds now exceed one year's compulsory lockup, and permit shifting of tax status for long periods of time without any obvious tax-based purpose.
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.
