Why 75+ Years of American Finance Should Matter to Physician Investors

A Graphic Presentation [1861-1935] with Commentary from the Publisher

By Dr. David Edward Marcinko FACFAS MBA CPHQ CMP™


As our private iMBA Inc clients, ME-P subscribers, textbook and dictionary purchasers, seminar attendees and most ME-P readers know, Ken Arrow is my favorite economist. Why?

About Kenneth J. Arrow, PhD

Well, in 1972, Nobel Laureate Kenneth J. Arrow, PhD shocked Academe’ by identifying health economics as a separate and distinct field. Yet, the seemingly disparate insurance, asset allocation, econometric, statistical and portfolio management principles that he studied have been transparent to most financial professionals and wealth management advisors for years; at least until now.

Nevertheless, to informed cognoscenti, they served as predecessors to the modern healthcare advisory era. In 2004, Arrow was selected as one of eight recipients of the National Medal of Science for his innovative views. And, we envisioned the ME-P at that time to present these increasingly integrated topics to our audience.

Healthcare Economics Today

Today – as 2022 passes – savvy medical professionals, management consultants and financial advisors are realizing that the healthcare industrial complex is in flux; along with the Russian war, domestic inflation and this dynamic may be reflected in the overall flagging economy.

Like many laymen seeking employment, for example, physicians are frantically searching for new ways to improve office revenues and grow personal assets, because of the economic dislocation that is Managed Care, Medi Care and Obama Care [ACA], the depressed business cycle, etc.

Moreover, the largest transfer of wealth in US history is – or was – taking place as our lay elders and mature doctors sell their practices or inherit parents’ estates. Increasingly, the artificial academic boundary between the traditional domestic economy, financial planning and contemporaneous medical practice management is blurring.

I’m Not a Cassandra

Yet, I am no gloom and doom Cassandra like I have been accused, of late. I am not cut from the same cloth as a Jason Zweig, Jeremy Grantham or Nouriel Roubini PhD, for example.

However, I do subscribe to the philosophy of Hope for the Best – Plan for the Worst.

And so dear colleagues, I ask you, “Are the latest swings in the economic, healthcare and financial headlines making you wonder when it will ever stop?”

The short answer is: “It will never stop” because what’s been happening isn’t any “new normal”; it’s just the old normal playing out before a new audience; sans the war.

What audience?

The next-generation of investors, FAs, management consultants and the medical professionals of Health 2.0.

How do I know all this?

History tells me so! Just read this work, and opine otherwise, or reach a different conclusion.

Evidence from the American Financial Scene, circa 1861-1935

The work was created by L. Merle Hostetler in 1936, while he was at Cleveland College of Western Reserve University (now known as Case Western Reserve University). I learned of him while in B-School, back in the day.

At some point after it was printed, he added the years 1936-1938. Mr. Hostetler became a Financial Economist at the Federal Reserve Bank of Cleveland in 1943. In 1953 he was made Director of Research. He resigned from the Bank in 1962 to work for Union Commerce Bank in Cleveland. He died in 1990.

The volume appears to be self published and consists of a chart, approximately 85′ long, fan-folded into 40 pages with additional years attached to the last page. It also includes a “topical index” to the chart and some questions of technical interest which can be answered by the chart.

Link: http://fraser.stlouisfed.org/75years


And so, as with Sir John Templeton’s [whose son is an MD] four most dangerous words in investing (It’s different this time), Hostetler effectively illustrates that it wasn’t so different in his era, and maybe—just maybe—it isn’t so different today for all these conjoined fields.


Your thoughts and comments on this ME-P are appreciated. While not exactly a “sacred cow,” there is a current theory that investors will experience higher volatility and lower global returns for the foreseeable future.

In fact, it has gained widespread acceptance, from the above noted Cassandra’s and others, as problems in Europe persist and threats of a double-dip recession loom. But, how true is this notion; really?

Is Hostetler correct, or not; and why?

Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

Our Other Print Books and Related Information Sources:


“Insurance & Risk Management Strategies for Doctors” https://tinyurl.com/ydx9kd93

“Fiduciary Financial Planning for Physicians” https://tinyurl.com/y7f5pnox

“Business of Medical Practice 2.0” https://tinyurl.com/yb3x6wr8


“Financial Management Strategies for Hospitals” https://tinyurl.com/yagu567d

“Operational Strategies for Clinics and Hospitals” https://tinyurl.com/y9avbrq5

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12 Responses

  1. Can you say Double-Dip Recession?

    Well done, Dr. Marcinko. More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.


    In an ominous sign for America’s economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.



  2. Hussman Warns of ‘Goat Rodeo’ for Markets With 25% Losses

    [Manager who called 2007 market top foresees brutal half-year ahead; market has not cooperated with his most recent predictions]

    Dr. Marcinko,

    John Hussman, the PhD portfolio manager, just warned that today’s low earnings yields and high financial advisor bullishness “is associated almost exclusively with steeply negative outcomes.”




  3. How (and How Not) to Jumpstart an Economy
    [A New Book]

    The author of a new and related book about the stimulus and domestic economics and histoy – Money Well Spent? – draws lessons for what the government can do now to create jobs.


    Ann Miller RN MHA


  4. Macro-Economics Update

    Positive news emerged from two of the global economy’s most-troubled precinct this week. First there was the US housing market and then the Greek debt negotiations.

    More specifically, January results showed that home sales extended their favorable trend in the deeply depressed sector, while European negotiators hammered out an agreement on a second bailout plan for Greece, subject to approvals.

    Any thoughts?

    Dr. David Edward Marcinko MBA


  5. Can you see the domestic stock market crash comming?

    Did you know that early in the year, the stock market often briefly pulls back. Yep!
    It happened in 2010 and 2011. It happened in the years before the 2008 financial “flash-crash.”

    And, some economists suggest it will happen again this year; perhaps quite soon.
    Any thoughts?

    Dr. David Edward Marcinko MBA


  6. This may be the week stocks fall back to Earth

    Dr. Marcinko – Some pundits think the S&P, now at the highest point since before Lehman’s collapse, is due for correction.


    So, you might be right!



  7. Early March 2012

    Domestic economic reports released this week reflected a stable or growing economy, with the durable-goods report being the exception.

    Fourth-quarter gross domestic product (GDP) was revised upward, as manufacturing activity remained sustained while both business and consumer sentiment improved.

    Any thoughts?

    Dr. David Edward Marcinko MBA CMP™


  8. Weekly Update:

    The barrage of upbeat economic reports out this week showed that the economy is continuing to expand. Solid jobs growth, increased productivity, an explosion in auto and federal student loans, and continued expansion in the service industry all bolstered recovery hopes

    Dr. David Edward Marcinko MBA CMP™

    Former, American Society of Health Economists (ASHE) member
    Former, American Health Information Management Association (AHIMA) member
    Former, Healthcare Information and Management Systems Society (HIMSS) member


  9. This Week

    News on the housing market was a hot property this week, though results were mixed. While home sales and starts declined last month, their improvement over the last few years seems to show that the housing market—the core of the last financial crisis—may be digging itself out of a 7-year hole.

    Meanwhile, an important gauge of future economic activity rose for the 5th consecutive month.

    Dr. David Edward Marcinko MBA CMP™
    Former, American Society of Health Economists (ASHE) member


  10. Update

    The U.S. economy grew at a slower pace in the first quarter of 2012 than in the previous quarter, according to the closely watched gross domestic product (GDP) report.

    Other economic data supported the view that the recovery continues to advance at a modest but uneven pace.

    Dr. David Edward Marcinko MBA CMP™


  11. Doctor Gloom and Doom

    Dr. M – Your are, and have been, wrong about a depression/recession.

    Why? – The market has been booming all year. The Dow Jones Industrial Average ($INDU) has popped back above 14,000. Small-capitalization stocks just hit a new all-time high, and mom, pop and physician-investors have been jumping back into the market.

    Dr. Greene


  12. Dr. Greene,

    No one knows where the stock market will go for sure.

    But, at a near 8% unemployment rate, $4 a gallon gasoline, persistent inflation in housing rents and health care costs, higher taxes, stagnant wages, and the fact that six million fewer Americans are working full-time vs. the 2007 high — even as the population has swelled by 12.3 million over that time — the market seems frothy and does not look good to me.

    So, it sure looks like we are set up for a fall soonest … can you say recession!
    Then, GOMER [Get Out of My [fiscal] Emergency Room].

    Dr. David Edward Marcinko MBA CMP™
    Former, American Society of Health Economists (ASHE) member


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