Friendly, neighborhood doctor

Working in a hospital I get a interesting, and largely unique, perspective on how they operate and how the people who work in them think.  One of the more interesting things I have encountered is the phenomenon of the “poor MD”.  I was in my lab when I overheard two physicians, in the hallway, talking about how poor they were!  They were bemoaning the fact that their student loans had exited the grace period and now the payments were coming due.  At the time I just thought it was two guys who were just pissing and moaning and it did not mean anything.  Later, I heard a surgeon saying the same thing.  This time this MD was talking to me so I pressed her on the matter.  She really did believe that the “money was leaving the profession”.  Those who know me know this would not be allowed to stand so I called her out on it.  I have the ability to give someone a look that clearly indicates that I believe they uttering the dumbest thing I have heard in quite a while.  The presence of this look initiated a session of stammering and hedging on her part.  As it turns out the money is good.  As it turns out the work is mind numbingly boring at times.  As she speaks I’m doing some math in my head:  she makes in two months what I make in a year and she makes in a day what the population of 33% of the planet makes in year (that’s over 2 billion people).  What it came down to was that she expected something different.  I thought that maybe she was just having a bad day until I ran into a much better example.  I was talking with a male MD about something and he mentioned how poor he was.  “Again?”, I thought.  MDs seemed to be obsessed with their student loans and they treat them like bogymen (I’ll come back to the student loan issue below).  Same story as the female but with one little twist.  The female MD drove a beat-up Celica, the male drove a shinny, new Porsche.  Unfortunately for both of us, he left before I got a chance to compliment him on his titanium balls (though I have been referring to his car as a “penis-mobile” ever since–it annoys him, makes me laugh).

Freddy Kruger of student loans

So exactly how bad is the student loan situation for MDs?  The usual advice from financial advisers who aren’t named “Suze Orman” is borrow about twice the starting salary of the job you are likely to get with your education.  In my case my total student loan debit will be around $35,000.  My starting salary as tenure-track assistant professor (the starting salaries for industry are usually a bit higher) will be about $40,000-45,000 in Charlotte dollars (2009).  That is a ratio of  0.875-0.77.  I do not complain about my student loan debt except to bemoan the fact that some universities, Ph.D. students have $0 debt from their graduate education (but I have made my bed).  Let us compare.  According to the AMA, the average total student loan debt for a newly graduated MD is $154,607.  The median starting salary of a post resident MD is $143,000.  A less than back breaking ratio of 0.92 (which incidentally is a better debt-to-income ratio than I have).  Also, this means that even if MD salaries were cut in half by the upcoming “health care reforms”, they would still have a manageable level of student loan debt.  They would not be able to live the plush lives they do now but that is not such a bad thing.  But in the end that’s really the issue.  I have yet to encounter an MD who convincingly makes the case that they became a physician for anything other than the money (with a close tie for second being the “cool factor” and lifetime employee regardless of your competence).  In the end, MDs take advantage of an artificially created shortage of physicians to bolster their own salaries and even though the vast majority of physicians are not members of the AMA they still are more than willing to profit off the situation and offer no challenge to the draconian regulations the AMA is allowed to impose in order to start a medical school and I have yet to hear any MD group advocating for the enhanced importation of foreign doctors.  In the end, it is not the student loans which scare physicians and MD wanna-bes, it is the thought that the salary may not be there one day.  They are right to be afraid, their salaries will fall as they have been overcharging for many decades now.  They should count themselves lucky that consumers patients are not asking for a refund.

Among the many casualties of the Obama Administration’s auto “bailout” plan, one may very well be the thing that allowed uneducated Americans, which still represents the overwhelming majority of Americans, to achieve a middle class lifestyle, namely the American labor union. If GM is forced into bankruptcy and Chrysler is sold off on the cheap to Fiat (which Obama is forcing down the throat of Chrysler) one of the net results will be the eradication of the union contracts. These contracts were weak to begin with and the UAW has been making concessions at a break neck pace. It is unlikely that a bankruptcy judge is going to take pity on the union. Despite the fact that the union has already conceded on wages, health care (for current workers), layoffs, raises and outsourcing the only prize left is the legacy health care costs for retired workers and pensions. These workers will largely suffer when the GM pension program falls on the Pension Benefit Guaranty Corporation and their health care plans (which are similar to the plans received by government employees) will be jettisoned for the substandard insurance that the majority of the private sector suffers under.  If you think I am being hyperbolic, then figure $2 million dollars (a fair estimate of what is billed when one receives treatment for cancer) and calculate how much money you will have to pay out of pocket. Do not forget to factor in what your premium will skyrocket to when your insurance comes up for renewal, assuming the insurance company does not drop you entirely.

Once the union rolls over or is forced over, exactly why would anyone join a union?  The whole point of a union is to ensure that management does not run ruff shot over the workers.  But with union membership declining and union jobs dwindling the ability of a union to fulfill its promise (a fair wage and safe working conditions) is all the more difficult.  Unfortunately, this is a feedback loop which ends when the union no longer exists.

Can someone explain to me what the difference is between GM and AIG?

It seems to me that:

1. Both companies were run into the ground by incompetent management who were motivated by greed rather than the good of the company.
2. Both companies can only survive by the largess of the American taxpayer.
3. The failure of either company would have a disastrous effect on the U.S. economy (so we are told).

It appears that if your business is finance then the bailout gravy-train comes fast and with all the goodies.  If you actually make something then the bailout gravy-train comes slow and chunky.