Miracle on Wall Street by Steven Vaughn MD, PhD

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Bow your heads when you read this. Bifocal-wearers are exempt, of course.

We have seen the miracle. We should count ourselves lucky. Most generations never see an astonishing economic miracle such as this. Halley’s Comet circles by, it comes and goes – but these sorts of miracles are rare even to the various centuries.

This is a true economic miracle. It has lasting power, not like the many fads and illusions that streak by, like the American Housing Bubble. Read Charles Mackay’s Extraordinary Popular Delusions if you are entertained by public financial foolishness.

Nothing in memory has existed like this, and even the children today will not see another again, should they live to be elders. They will tell their grandchildren of the economic miracle of back in the day.

Rarely has a major business sector grown with such vital energy for so long. If you can remember back to the years far before the Millennium, this sector grew and grew.  Since long ago, it has grown at 12% annualized, like a heartbeat. For those who cannot handle such heady numbers of growth, that’s doubling your investment every six years.

Is it the Chinese economy? No, even China has only made 8% at fits and starts. This sector left China behind in the dust.

What is it? The Japanese postwar miracle, the Marshall Plan after WWII? Steve Goldberg says no, and no, in Kiplinger’s. For 60 years, Japan went from bankrupt to First World at a growth rate of 3.2 percent – small change. West Germany alone ran at 9-10% for about seven years right after the War; always growing but never that fast.

Think big. The years from the Civil War to 1900 showed an incredible manufacturing and financial boom that turned the Old America into Modern America; we are still living fat off those days of boom industrialization, which in turn allowed the Marshall Plan and the Miracle of Japan. The surplus cash from American productivity was plowed into the defeated postwar countries, under the idea that poor enemies can become rich friends. Been there, got the shirt.

Booms this big trail cultural explosions – is that a hint? Ah, it’s IT, computers, big data, right? We all remember what “computers” were like in the late 1980’s – a laughable stone-age device compared to what we have, unh-no?

It’s not Tech. It’s bigger than Tech.

It’s…..healthcare.

All the myriad elements that come under the umbrella of healthcare – Big Pharma, Biotech, and Corporate Medicine – have been booming with a screaming white heat for twenty-five years. Don’t believe me, believe Steve Goldberg of Kiplingers.

For 25 years, Healthcare has grown at the blistering rate of 12% annualized, year-in, year out. That’s not the peak, but the average.

Ponder the math. The Rule of 72 (look it up) says that 12% growth doubles your money ever six years. That’s been an uninterrupted four doubling periods. 8¢ invested in 1990 gets you $1.00 today. If you kept it in your pocket, it would be worth 4¢ today.

Nothing grows like this. Nothing. Ever. These yields are probably what successful cocaine importers make. So where’s the party?

1960 West Germany was a scads funner place than 1946 Occupied Germany, and Japan also – not so much rat in the stew. And by the 1980’s, these folks were out-innovating the Americans in cars and consumer goods.

You have to struggle to explain to today’s teens exactly what the World Before Internet was – how it looked, felt, smelled; how business could even be done by papers and punchcards.

Something feels unreal – and it is, to some degree, unreal. It’s a paper boom. Other genuine expansions are characterized by the massive improvement in productivity. On the other hand, the fads ring hollow. Yes, the tulip had come to Holland, and cool tulips were all the rage; but not worth their weight in diamonds, as a few strains were priced. Million-dollar McMansions in the Nevada Desert? Suspicious.

A huge part of the Medical Miracle has been the orderly transfer of wealth from Main Street to Wall Street. As long as one measures the value of things by the Dow Sector averages, the changes in healthcare are wonderful – but just going to slow. Hurry it up!

Before some boo-bird opines that this is just lefty-talk, remember that we are the ones who decided to measure things by Wall Street metrics, not Main Street Metrics. The whiz-bangers of New American Healthcare pretend that Business School Concepts have just come to the primitive tribe with its witch-doctors. Management is a new concept in Healthcare, they reassure themselves and everybody.

Except not. Industrial and scientific management techniques are actually pretty old, maybe a century or so; and turning the clinic into an assembly line has been tried – and it fails, over and over again. But this time, it has the force of coercion behind it – not exactly a libertarian cheerleading slogan.

Huge profits can be made by the Wal-Martization of healthcare. Again, Wal-Mart is terrific at many things – determining the lowest price tolerable to the seller, for the least-quality item acceptable to the consumer. Oranges, patio furniture, it works fine. Wal-Mart is driven by Main Street, not Wall Street.

The myth is of little PA offices in every WalMart providing prescriptions that, interestingly enough, can be filled right there in the WalMart pharmacy. That works for antibiotics for the flu and baby’s ear infection. Not so good on acute infective endocarditis or fetal distress.

But the Miracle on Wall Street has not delivered much unto Main Street. The ACA has brought us “mandatory freedom of choice.” Still, over half the personal bankruptcies on Main Street are due to medical catastrophes; and most of those bankrupts had health insurance. That’s not different.

The people who run the show in the great picture point to 12% x 25 years and ask – who’s gonna stop this? Not the Government – the Health Care Miracle has “lifted the economy out of recession.” It’s paying taxes for our bankrupt Federal system – which borrows from China to funnel dollars right back in to Healthcare. When the trains are running on time, nobody’s going to ask where they go, and why they always rattle back empty.

The pickins haven’t been so good for Wall Street for a long time, anyway. Without Tech and Healthcare, the Street would be sunk in a spiraling depression, with the loss of civilian industry and production. Except for Tech and Healthcare, what do people ‘do’ anymore? All that is left is the Oversight Industry to create makework jobs of auditing, and preparing for auditing, and generating reams of rules, no matter if anything actually gets done.

What will happen when there is nothing left to oversee, when the last motor grinds to a halt, when the last doctor walks off to retirement, when the last piece of GiantData is filed? When they discover that GiantData is futile if it leads to nothing, that JCAHO cannot audit empty clinics anymore?

A fading society is actually defined better by its vaunted ‘successes’ than its unspoken failures. And the Healthcare Sector boom, now a quarter-century old, may well tire and fade in an even more ugly fashion than it has during its “boom times.”

What is our culture speaking of during the boom times? The clash of medieval empires. “Panem,” a country consisting of the wealthy Capitol and twelve districts in varying states of poverty. Strange doings in Azeroth. If we are doing so well at home, why do we race to dystopic fantasy worlds that portray control and futility?

Such fascination with ritual and magic and other worlds is not a commonly seen attraction in flourishing societies. In those that are fragmenting and trickling back into dust, yes. When we seek deep metaphors that describe our future, it is not the thrill of Biotech in the here and now – it is the strange and fantastical far, far away that makes our lives make sense.

That is the culture of the boom times. If things are so splendid, why to we act so strangely about it?

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  4 comments for “Miracle on Wall Street by Steven Vaughn MD, PhD

  1. Dave Mittman, PA, DFAAPA
    June 16, 2015 at 3:15 pm

    The knock on PAs and the insinuation that we don’t know what we are doing is B.S.
    Keep alienating the only friends you have and wondering why no one can stand beside you.
    I know-you are the only ones who know anything…..
    Unfair.
    Dave

    • Steve Vaughn
      June 17, 2015 at 12:27 am

      No, go right ahead. If you see your future as working in Wal-Mart, be the best you can be!

  2. Perry
    June 15, 2015 at 11:20 am

    ” Now, we slide towards a world of mediocre-at-best, snitching and b*ching, pull down thy neighbor. Why?”

    Why? Because it’s easy. We don’t have to work that hard anymore. We will be taken care of by Big Brother. The only problem is, the one that holds the $$$ determines what we will get. So, if we don’t like what we get, we shouldn’t complain.

  3. Steve Vaughn
    June 15, 2015 at 9:10 am

    PS: Sorry! Some of the points at the end are mashed and blurry. They don’t pop off the page, but rather just smolder ineffectively like bad popcorn kernels. The overarching point is that we Americans have given up control over the big picture. We are well-trained to order off the menu, and get what we get. We used to think big, about what we wanted to future to be – and we blew away the other civilizations on Earth. Read Carl Sandberg. Read Whitman. Americans! Impossibly big. We build a wide nation and gird it with steel – we reach to the sky with skyscrapers. Leap into the air! Fly to the Moon! Talk loud, not from arrogance, but from our own vitality. Is there inequity? We can mow that down with more opportunity – for all! Fight wars – across the globe – and win! And be charitable to the losers. That old Red Threat – they watched us for a while, and then simply quit! Americans – the people who could do anything! Now, we slide towards a world of mediocre-at-best, snitching and b*ching, pull down thy neighbor. Why?

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