Medicine at Crossroads

Human knowledge, understanding and behavior evolve due to experiential references. Our time and its consequential references has foreshadowed the eloquence of one of the greatest nobilities of human endeavors; Medicine.

Medicine lies bleeding at the doorstep of a world caught up in the weight, value and cost. Medicine that once redeemed the health of a human being is now relegated to the swamps of fatigue, walls of worry and opaque windows of haze from where the future is not visible. The restlessness that permeates this once noble and generous profession is gathered and proffered by none other than those that lined it up as the road paved with the best of intentions.

The safety net that was to catch those elderly with fixed incomes has now become the Holy Grail for the politicians and the retirees. No one wants to let go of the rope. No one seems willing to understand the consequences. No one seems to see the crumbling pixels of the image of the future. Is it that we have come so far away from the premise of self-reliance to the desire of dependence that we don’t see the thorns that line the paths to our own future?

What will happen to that water-colored painting when the drenching doubt of solvency rears its ugly head? Would the officers in charge continue to kick the ball down the road and use patchwork of band-aids to cover the abraded wounds of their diseased and dying concept? What will they do? How will they solve this calamity that they keep putting off on some one else’s shoulders? When will “It is not my problem,” end? When will giving “more” to seek a polling-booth advantage give way to a reasoned thought, concerned with the debt on our progeny?

These are serious questions that require a few courageous tough-minded souls to take on and answer. The resolution will not come easy. There will be a lot of crying, criminalizing, vilifying that will go on, because those that are on the ride will be left wanting and those that expected to get on the train will find the doors shut.

If courage is to take hold and determination is to provide a consensus of strength to proceed with the tough road ahead the simplest solution is to make the break now.

Some simple solutions involve, raising premiums for those wealthy seniors who are able to afford, stop enforcing assignments on the physicians and allow fee-for service to find the balance between good care and affordability, stop chastising the physicians and allow the “market-place” to determine the difference between need and want. Somewhere in our citizenry there is a “self,” wanting to have a go at being reliant.

Medicine is at the crossroads between excellence and mediocrity. Choose the right path and generations will prosper and benefit. Choose the wrong path and the whole house of cards will fall upon us all.

The moment of reckoning closes in upon us. Choose wisely.

The following graphs and charts are obtained from the Office of Management and Budget (OMB) and rendered for information.

If it be now, 'tis not to come; if it be not to
come, it will be now; if it be not now, yet it will come—the
readiness is all. --Hamlet

Breast Cancer Energetics

Breast Cancer afflicts over a million women worldwide and just over 200,000 women in the US.  About 40,000 deaths are directly attributed to this disease.

From 2003-2007, the median age at diagnosis for cancer of the breast was 61 years of age³. Approximately 0.0% were diagnosed under age 20; 1.9% between 20 and 34; 10.5% between 35 and 44; 22.6% between 45 and 54; 24.1% between 55 and 64; 19.5% between 65 and 74; 15.8% between 75 and 84; and 5.6% 85+ years of age. The age-adjusted incidence rate was 122.9 per 100,000 women per year. These rates are based on cases diagnosed in 2003-2007 from 17 SEER geographic areas.

Incidence:

The incidence has recently stabilized after a prolonged increase for several years. The thinking is that the hormone replacement therapy used widely in the past may have contributed to that rise. The Join-point analyses shows the following trend based on the SEER data a rising rate of 0.4 through 1975-1990 and a drop -2.2 from 1990-2007. These numbers are of significant value in terms of long-term trends.

Other factors that contributed include worldwide awareness and early diagnosis, self-examination and the use of mammography for early detection. Early detection may have helped the lead-time-bias to diagnose the disease earlier, thus migrating patients into an earlier stage-time. The benefits of early detection have been significant.

Incidence of Breast Cancer

Over the past 30 years, the distribution of breast cancer stages has changed. The diagnosis of ductal carcinoma in situ (DCIS) and very early stage breast cancer (stage I) has increased. Diagnosis of DCIS alone has increased by more than 350%in white women over 50 and more than 400% in African American women over the age of 50 Large increases have been seen in diagnosis of DCIS and stage I breast cancer in women under 50 as well. These changes suggest that higher screening rates and better screening tools allow more breast cancer cases to be caught in early stages when they are most treatable.

Breast Cancer Stage migration over decades

Migrating the diagnosis to an earlier time also leads to down-staged (or found at an earlier stage) disease. Finding the disease in early stage without spread leads to better cure rates. That pattern of falling incidence seems to be moderating now since those patterns of care have been factored in already.

Stage Distribution and 5-year Relative Survival by Stage at Diagnosis for

1999-2006, All Races, Females

Localized (confined to primary site)	%60	5 Yr Survival 98.0%
Regional (spread to regional lymph nodes)	%33	5 Yr Survival 83.6%
Distant (cancer has metastasized)	%5	5 Yr Survival 23.4%
Unknown (un-staged)	%2	5 Yr Survival 57.9%

We concentrate for this discussion on genes as they relate to breast cancer.

It is well known that a strong family history of both vertical (mother to child) and horizontal (sister and sister) transmission of the genetic effect can have an impact on elevating the risks of this disease. Additionally if the disease has occurred in younger family members there is a higher level of suspicion that genetics may be involved in the initiation and promotional processes of the disease. (By initiation is meant the denovo cause of the disease specifically due to genetic mutation and promotion means that the inherent cause may still be undetermined but subsequent genetic mutation, such as, from environmental factors may have caused the disease to blossom).

BRCA gene mutation:

Mary-Claire King PhD

Mary-Claire King, PhD who discovered that humans and chimpanzees share 99% of the genome also discovered the BRCA1 and BRCA2 suppressor genes found on Chromosome 17 as a root cause for about 8-14% of all breast cancers in white women. These two genes are a normal part of the human genome. These two genes are involved in day-to-day regulation of the human genome, picking off any abnormality such as an uncalled for genetic mutation. That is why they are called tumor suppressor genes. They suppress any genetically malfunctioned cellular growth activity. Dr. King found that there were cohorts of individuals in various communities who had a predisposition to dysregulation of these two genes. These individuals were predominantly from the Ashkenazi Jewish background and lived in Long Island, NY and Peru. The genetic malfunction seemed to be within pockets of communities. Further testing has expanded the relative occurrence of these gene malfunctions in the Dutch and Icelandic populations also.

BRCA gene function:

 The BRCA 1 gene functions to repair the double stranded DNA breaks that occur due to damage. It is a part of a protein complex that works its reparative magic when the DNA is wrapped around the histone in the cell’s nucleus. Research has identified hundreds of mutations of the BRCA gene complex that are associated with the breast cancer risk.

BRCA 1 gene coded protein

Women with an mutated BRCA1 or BRCA2 gene have up to an 60% (6 of 10) risk of developing breast cancer by age 90; increased risk of developing ovarian cancer is about 55% for women with BRCA1 mutations and about 25% for women with BRCA2 mutations

BRCA1 and BRCA 2 gene mutations are associated with a 5 times higher risk of breast cancer then the general population. (60% versus 12%). Women with BRCA 1 gene mutation also have higher risks of ovarian cancers and to a lesser extent cervical, and uterine. Those with BRCA 2 gene mutation have higher risk of pancreatic cancer, stomach, gallbladder, bile duct cancer (Interestingly these four cancer arise in close proximity to each other) and melanoma. Men who carry BRCA 1 mutation have a higher risk for male breast cancer, pancreatic cancer, testicular cancer and prostate cancer.

It is important to know that not every individual with the BRCA 1 and 2 mutation will develop breast, ovarian or any other cancer. In addition those individuals with the BRCA mutation with SNPs (single nucleotide polymorphisms) called “snips” may increase the inherent risk further and potentially cause more aggressive types of cancer (The more mutations the DNA uncurs the more aggressive the behavior of that cancer cell).

Other genes that show mutations in hereditary breast and ovarian cancer include TP53 (considered the guardian of the genome and implicated with Li Fraumeni syndrome), PTEN (cell regulatory gene), STK11/LKB1, CDH1(associated with lobular cancer of the breast and stomach cancer), CHEK2 (tumor suppressor gene which limits wayward cell proliferation), ATM (DNA repair gene), MLH1, and MSH2.

Breast Cancer Risk Monitoring is necessary for the following individuals:

1. Two first-degree relatives or three or more first or second-degree family members with breast cancer before age 50.

2. Both breast and ovarian cancer exist in the first or second-degree relative.

3. Women in the family have breast cancer.

4. Ashkenazi Jewish heritage especially with family member with breast or ovarian cancer.

5. A male member in the family with breast cancer. (Male breast cancer is 1% of the total breast cancer prevalence.

6. A first-degree relative with bilateral breast cancer.

7. Individuals with dense breasts have a six-times higher risk.

8. Radiation therapy for Hodgkin or Non-Hodgkin Lymphoma before age 30.

9. Full term pregnancy after age 30

10. Long Menstrual history.

Options that exist for individuals with known BRCA gene mutations:

Surveillance:

1. Monthly self-examination

2. Breast examination by medical professional

3. Mammography

Digital (left) vs Analog Mammography (right)

4. MRI of the breasts

MRI scan of the breast

5. Ultrasonography of the breasts as a supplemental test.

6. Prophylactic Bilateral Mastectomy (removal of both breasts) and Salpingo-oopherectomy Removal of ovaries and the fallopian tubes). 

Risk avoidance:

Avoid the following things:

1. Fatty diet

2. Obesity

3. Smoking

4. Alcohol

5. Hormone replacement therapy

6. Birth Control Pills

Exercise!

7. Sedentary habits

Chemoprevention.

The large P1 study determined that use of Tamoxifen (a Serum Estrogen Modulator) in high-risk individuals for breast cancer had a 50% reduction of that risk by taking the SERM. Physicians will generally assess the risk factors related to a specific patient and determine the need for this preventative measure. The balance between the protective effect and the potential side effects of the medication must always be taken into account and should be discussed with the physician.

Oncotype DX:

Genetics have also helped in decision-making regarding patient care. A DNA micro-array chip of 21 mutated genes (Oncotype DX) can determine the nature of the malignancy, whether it is aggressive or not and thus determine the need for chemotherapy. 

MammaPrint (70 coded genes) vs OncoType DX (21 coded genes)

The assay is indicated in a select group of patients with Stage I and II, lymph node negative and Estrogen Receptor positive disease state. It defines a 10 year projected risk of recurrence and thus tailors treatment for the individual patient. The Oncotype DX has benefited many patients over the past several years and modifications of the same, will further define individualized therapy.

References:

Hall JM et al., "Linkage of early-onset familial breast cancer to chromosome-17q21," Science 1990, 250:1684-9

Ries LAG, Eisner MP and Kosary CL. SEER Cancer Statistics Review, 1973-1998, National Cancer Institute. http://seer.cancer.gov/csr/1973_1998/, 2001.

American Cancer Society. Breast Cancer Facts & Figures 2009-2010, 2009.

Altekruse SF, Kosary CL, Krapcho M, Neyman N, Aminou R, Waldron W, Ruhl J, Howlader N, Tatalovich Z, Cho H, Mariotto A, Eisner MP, Lewis DR, Cronin K, Chen HS, Feuer EJ, Stinchcomb DG, Edwards BK (eds). SEER Cancer Statistics Review, 1975-2007, National Cancer Institute. Bethesda, MD, http://seer.cancer.gov/csr/1975_2007/

Thompson D, Easton DF, the Breast Cancer Linkage Consortium. Cancer incidence in BRCA1 mutation carriers. Journal of the National Cancer Institute 2002; 94(18):1358–1365.

The Breast Cancer Linkage Consortium. Cancer risks in BRCA2 mutation carriers. Journal of the National Cancer Institute 1999; 91(15):1310–1316.

Campeau PM, Foulkes WD, Tischkowitz MD. Hereditary breast cancer: New genetic developments, new therapeutic avenues. Human Genetics 2008; 124(1):31–42.

Walsh T, Casadei S, Coats KH, et al. Spectrum of mutations in BRCA1, BRCA2, CHEK2, and TP53 in families at high risk of breast cancer. Journal of the American Medical Association 2006; 295(12):1379–1388.

Struewing JP, Hartge P, Wacholder S, et al. The risk of cancer associated with specific mutations of BRCA1 and BRCA2 among Ashkenazi Jews. New England Journal of Medicine 1997; 336(20):1401–1408.

U.S. Preventive Services Task Force. Genetic risk assessment and BRCA mutation testing for breast and ovarian cancer susceptibility. Retrieved April 20, 2009, from: http://www.ahrq.gov/clinic/uspstf05/brcagen/brcagenrs.htm.

Kauff ND, Domchek SM, Friebel TM, et al. Risk-reducing salpingo-oophorectomy for the prevention of BRCA1- and BRCA2-associated breast and gynecologic cancer: A multicenter, prospective study. Journal of Clinical Oncology 2008; 26(8):1331–1337.

King MC, Wieand S, Hale K, et al. Tamoxifen and breast cancer incidence among women with inherited mutations in BRCA1 and BRCA2: National Surgical Adjuvant Breast and Bowel Project (NSABP–P1) Breast Cancer Prevention Trial. Journal of the American Medical Association 2001; 286(18):2251–2256.

Gronwald J, Tung N, Foulkes WD, et al. Tamoxifen and contralateral breast cancer in BRCA1 and BRCA2 carriers: An update. International Journal of Cancer 2006; 118(9):2281–2284.

Whittemore AS, Balise RR, Pharoah PDP, et al. Oral contraceptive use and ovarian cancer risk among carriers of BRCA1 or BRCA2 mutations. British Journal of Cancer 2004; 91(11):1911–1915.

Calle EE, Rodriguez C, Walker-Thurmond K, Thun MJ. Overweight, obesity, and mortality from cancer in a prospectively studied cohort of U.S. adults. New England Journal of Medicine 2003; 348(17):1625–1638.

Mazoyer S. (2005). "Genomic rearrangements in the BRCA1 and BRCA2 genes". Hum Mutat. 25 (5): 415–22

A-Multigene-Assay-to-Predict-Recurrence-of-Tamoxifen-Treated-Node-Negative-Breast-Cancer
S Paik, S Shak, G Tang, C Kim, J Baker, M Cronin, FL Baehner, MG Walker, D Watson, T Park, W Hiller, ER Fisher, DL Wickerham, J Bryant, N Wolmark 
N Engl J Med. 2004; 2817-2826

Why Medicine needs Internists

Physician

Our system of medicine has morphed into a specialty based top-down interventional phenomenon. An extremely linear approach to the concept that if a disease occurs then the best possible mitigation strategy is to go to the person who has the expertise in that field. While that may be true in specific terms it is not true in general ones. Yes you would need a cardiology interventionalist to place a stent, 

Stent placement in an artery

or an interventional radiologist to place a catheter into the pancreatic duct, or a urologist experienced in the DaVinci Robot system to do Robotic Prostate surgery,

DaVinci Robotics

 but this is not the need of the majority of people who need guidance and management of their bodies as a whole. A generalist or Internist is the best example to provide that service to understand the realm of an individual patient’s care.

This argument might appear simplistic at the surface level, but there is a deeper and sounder basis to it.

Linear Analytics

The linear, predictable argument goes as described above but the non-linear real-world argument shows there is more at stake in the progress of medicine to have a large progeny of the internists in practice then to have specialists.

Don’t get me wrong, the specialists provide specific and very welcome care to patients. I am one of them. But the thinking of the specialist is morphed and grounded in the belief of care from a single vantage point. This is not to say that a cardiologist does not have concern about a patient’s diabetes or that an oncologist does not have an interest in a lung cancer patient’s emphysema, both those events are important from both perspectives and are taken into account in the management of the patient. But, and here is the big but, the thinking is limited to how it impacts the disease being cared for by the specialist. And there, is the rub.

An internist knows the patient as a whole, has an understanding of all his or her physiological array, the various maladies that have ravaged him or her or for that matter based on the patient’s lifestyle what potentialities are in store. The internist is the “hub” that determines the need for a limited or prolonged “spoke” (specialist) engagement between the two and during that period advises both parties of the relevant information that either might forget or misconstrue. In order for the wheel to turn and travel the bumpy road, all information about its limitations and that of the environment must be at hand to all parties.

From a mathematical point of view, the larger the pool of internists the better the optimized collective wisdom within the field of medicine. Alternatively the fractal nature of the chaotic-disconnected specialist system will ultimately undo the good it is meant to do. Based on the mathematical field of “Reductionism,” a large numbers of physician specialists involved in their tightly regimented fields would provide a limited management of the patient as a whole. (Please read Logic of Failure Blog on this site)

In mathematics a field of “Emergence” seems to signify this outline of the “bottom-up” approach where a collective wisdom of a large body of intellect super-cedes the small yet, isolated pockets of “Super-intellect.” This is not to say that specialists are intellectually superior in anyway. Because they are not, they are optimized and adapted to a finite portion of medical facts. An example would be a school of fish that moves as one without a leader but intuitively changes direction to avoid predation, 

just as a large flock of birds swoops down to perch on a tree with reason known only to the collective body.

 An ant colony is not based on a select few ants with super intelligence but thousands of “average ants” that collectively devise the quality of that complex eco-system of an ant colony. 

In this collective system each internist is available to provide and add to the larger insight and therefore progress. Small pockets, relevant only to themselves, do not enhance quality. 

IBM's WATSON playing Jeopardy

A recent technological “wonder” is an excellent example. IBM created a computer with an enormous number of parallel processing chips loaded on to its memory a large library of information to compete with two “champions” of the TV game called “Jeopardy.” Since “Jeopardy” is not only a game of fact based knowledge, it is also a game that exploits the nuance of the question itself, IBM’s WATSON best them by an “intellectual mile.” This underscores the need for a large body of generalists, with the freedom to express their thoughts, to help allow the field of medicine to flourish and thrive. As much as the collective is important, so too is the freedom of expression.

Medicine needs the Internists to thrive. Medicine needs the collective generalist opinion to grow and by doing so, prosper patient management. Medicine needs its internists for its continuing “Emergence.”

Dynamics away from and to prosperity

I am not an economist. I know by admitting to these five words, some of you have your finger poised to click away from the rest of what follows. Others might have a few invectives ready to fling, “Well then why the &*#$^% should I read the rest," and still others might read just so to validate in their minds the stupidity that I might expose through it all. It will be fodder at those late night parties. And some souls might persist and read it. To all these and other accidental visitors, welcome to my unsophisticated economic planet!

Richard Feynman

Richard Feynman once said in an interview that he took the Martian viewpoint to think. For instance he wondered that as the earth rotates in its daily orb that at twilight hitting the large part of the earth at the same time would find a lot of households employed in the similar game of brushing their teeth. An interesting concept to explore since he was not convinced about cavities and brushing of the teeth. But the premise was the Martian view. So I have decided to take one of those lofty viewpoints regarding the economy.

Imagine you are in a spacecraft waiting for the thrust to overcome the gravitational pull on liftoff.

Let us start with the debacle that was and is. The “Liquidity, Subprime, Housing and Debt crisis.”

Back in the summer of 2006, when everything was endless vista of rosy fortunes. What lay ahead was anyone’s dream. None, save a few ventured into the dour world of what “could be.”  To those we heed in this hour of need. For it was their prescient thinking that heralded this hour of recognition.

In 2007, money was plentiful. The banks awash with loaned capital had but to throw it at anyone with a thought or a premise of potential return. No collaterals were needed, nothing save a signature. As the sub-prime debacle started to unfold and uncollateralized mortgages began to default, the liquidity solidified into a slow freeze. The train of hunched over men in long raincoats could be seen walking home to give the bad news to their families that they had been “let go.” Meanwhile the small boat carrying the true thinkers was coming to dock. One of the thinkers on that boat was Nassim Taleb who wrote “The Black Swan.” This book detailed the growing perfect storm that  would lead to an economic collapse. He was in retrospect right. What followed was the housing crisis where the unsustainable prices  became unsustainable. The “bubble” of there is “only limited land where to build upon,” suddenly became awash with “the land that had unoccupied buildings built upon.” 

Desired Home

The sub-prime disaster was erected on a premise of affordable housing for all, idea that oddly resembles the Affordable Health care for all. The problem in getting to housing for all was human ingenuity of creating derivatives like the CDOs , CLOs and the CDSs. These derivatives in simplistic terms were products composed of multiple mortgages packaged into one. The good, the bad and the ugly all buttoned up in one tiny portfolio. The investors who put up the money based on a false , by any of the several rating agencies who were paid by the product creator. Once the package had been bought by the investors it was repackaged and sold to someone else for a fraction of a profit for the next one and then the next one till the end result was that the initial lending agency nor the investor had no idea who actually was left holding the bag in case of default. 

IMF data on Housing Booms

Meanwhile a lot of ordinary citizens were in a similar game of "flipping homes" for quick capital gains. some of the homeowners and speculators now having lost their jobs were left under a roof, holding the mortgage that they could not afford.  Thus, the housing sector slowed to a crawl and then finally seized motion. Construction companies started laying off large numbers of people, sending unemployment rates through the 10% roof. New hiring stopped as companies took a momentary pause to assess the damage. Other giant economic powerhouses had to unload inventories and workers to maintain solvency. The real unemployment rate ticked upwards into stratospheric territory for a matured highly developed economy. Onwards through the process, new hiring came to a standstill. A large population of workers was busy trying to liquidate unnecessary gizmos they had become fond of during the “wealthy period,” but found no buyers. A large generation of wistful, hunched and depressed folk walked through once bustling departmental malls looking at some fortunate few pursue the dream of acquisition that they had been forced out of. The political bells of "disenfranchisement," rang wild with frenzy roiling the emotions of the depressed lot.

Sometime during that turbulent period a man driving a Cadillac Escalade stopped in front of a pawnshop. His pinstriped suit was wrinkled and his face over grown with stubble. He walked into the shop and removed a Movado Fiero (listed at $4,000) watch 

from his wrist wanting $2,500 to cover his mortgage payment. The shopkeeper had no demand for the watch.  The man looked disappointed and said, “I don’t know what I am going to do,” and walked away. The body of that man was found hours later in the river.

Unemployment lines in the Great Depression

These unfortunate, stuffed envelopes with their resumes, to get jobs but most were too qualified and others were less so. The lost wages of more than 10 percent of the unemployed and an equal number of underemployed lower waged earners resulted in fewer sales of the discretionary products. Companies continued to tighten their belts until there was no income to be squeezed and companies had to shutter their doors. Thus more were evicted from the labor force, licking their chops. Auto makers like GM who could not sustain the union sponsored entitlements had to reorganize. This had a chilling effect on the suppliers to GM and also those workers that lost their employment. Again the government fearing a contagion bailed out GM with billions of taxpayer dollars. It is doubtful that the movers and shakers of the auto industry learned the lesson of fiscal prudence. The Main Streets in Detroit and all across Michigan have seen the worse scenario come alive with shuttered doors of small businesses everywhere.

$787 Billion US Stimulus Package

An artificial stimulus by the United States government of “flow of easy money” was delivered to help stop the dire non-lending practices of the banks and allow resumption of easier lending. The banks, however had other objectives in mind. They wanted to survive the economic disaster. Their easy lending practices had created a large uncollectible debt where their own book value was seeing red. The banks started to hoard the easy federal money so as to shore up their own books. They did not want to be a statistic. The collapse of giants like Lehman Brothers, Bear Sterns and Washington Mutual along with more than 170 small and intermediate sized banks that got chewed up in the process and closed doors, had taught them a lesson or two. To ease the burden on depositors, FDIC jazzed up the printing press and offered protection of up to $100,000 for their savings. The small companies meanwhile continued to languish with no ability to borrow. These small companies could not afford the raw material to produce their product for their customers. People willing to pay 50 cents on the dollar for the products slowly depleted the inventory. The lack of cash and the lean labor force forced large numbers of small businesses to finally succumb to lack of new orders and the stark reality of chapter 7. Part of the stimulus money was used up to bail out businesses that were “Too big to fail.” The government bought out the assets and became shareholders in the process. Given that the government was able to govern the board of directors and to make decision regarding the company’s future outcome, made for an unholy union. The public sector was fully enmeshed and dictating to the private sector. The slow crush of the regulators had started to break the back of the  free-wheeling-self-governing private sector of the United States of America.

The rocket is now climbing out into space and the earth is shrinking in dimension beneath us. The eastern and western shores are visible at the same time and there just now the western shores of Europe come into view.

A similar crisis was brewing in Europe. Countries that had recently been the “darlings” of the money world now stood at the brink of an abyss. First was Iceland that had loaned an exorbitant amount of money as government loan to Ireland and faced with Irish inability to pay back had to declare insolvency. Ireland meanwhile had been resting on the housing bubble that continued to expand and enlarge. The astronomical home prices plus the easy money realized by prospectors with untold gains. Irish construction companies were paying heavily to import workers from Poland on these construction projects. The unfinished ruins now mark the landscape in Ireland. They broadcast the sad testimony of the sudden embarrassment of riches and equally sudden fall from grace. As quickly had the flood of wealth entered the shores of Ireland, it quickly exited. The dreams vanished. The unmoved parked cars in the short-term parking lot at the Dublin airport depicted the sudden exodus of the migrant workers. Times had changed.

Irish Countryside

The economic debacle of Ireland, against all proclamations by the stuffed financial shirts and new age mathematical geniuses, came to pass and herald an age similar to the potato famine with massive migration to other lands of opportunity. This harsh reality will take years to unfold until a product or two become available for sale. Meanwhile, Ireland will lay claim to tourism and hope and pray. Other countries in the throes of fiscal stranglehold are Greece, Portugal and possibly Spain. The PIIGS as they are called all oink to the same beat today. All have debt burdens incurred for rejoicing in their free money. Now the debt holders are calling their debt and there is no where to hide except pay by borrowing some more, or do the most dreaded thing called sovereign default.

Over by the juggernaut of the European Union, Germany seems to prosper on the slimmest of margins. Its workers are tied to the bailouts meted out to Greece, Ireland and Portugal. The thinking continues to be that sovereign defaults will become a contagion and take EU down into a brink of financial collapse or at minimum break the European Union. Some have the belief “if not now- when?”  A better question is how long is the German tax payer going to take it.

There are welts of anger bubbling in the European society from the mass immigration policies of the past. Large population of Algerian and other African and Middle Eastern Immigrants reside in poor housing projects in France, with upwards of 35% of those in the unemployed registers.  That powder keg has an exposed fuse. 

Germany on the other hand has the most to lose for continuing the bailout supports to the other non-productive nations. It is akin to the taxpaying worker paying the unemployed and underemployed non-productive public sector entitlements from their earnings. In global terms that would mean, meting out entitlements to countries with lack of productivity, waste and poor fiscal management. Germany, a country that absorbed its Eastern neighbor in the unification process turned itself into a powerhouse of productivity, now she lies exposed to its band of entitled brothers.

From PIIGS to BRICs! What about China and India, the two nations from the BRIC economically healthy nations? We can deal with them one by one. India first.

A street in India

India is a nation of over 1 billion. They have piggy-backed themselves to the technological revolution with large conglomerates employing thousands of workers. This revolution was spawned due to the outsourcing that benefited the West and India jointly. One side did not want to pay high wages to employ, while the other side paid minimal by Western standards but quite bountifully by Indian standards to work the same job. That lucrative period is at an end. Most companies that had outsourced have limited such use of workforce due to their own balance sheet contraction. Meanwhile the new age technology worker in India, has raised his own demands for better working condition and higher pay. No longer are they happy with having a job, they want equanimity in pay scale and a say about the job status. It seems, prosperity does things to people for better or worse, that ripple through and haunt over time. This will raise the cost of doing business on the Indian shores. To continue the prosperity, India will have to innovate and export, besides having a digital sourced workforce, a product of quality that the rest of the world seeks.  Innovation, will likely breed the future of that nation, should innate fraud and corruption not overtake such goals. To her advantage 50% of India’s population is below the age of 25, thus holds a tremendous potential.

China, the second largest economy in the world recently dethroned Japan for that coveted position. China has seen a boom for all ages. Yet as all things run hot they will turn cold too. Their dependence on the West for desire of their low cost products is losing favor; a) due to the economic turndown there and b) lack of quality control. Correcting such debacles in a state run society can be rapid but faulty, decision makers reckless in their lofty positions mandate changes that may have little to do with the reality. The ensuing change will favor market pressures both on productivity, quality control and eventually on currency-balancing, that will make products on either side of buy and sell, reasonably priced. Unfortunately for the Chinese, the demographics dictate an aging population with a large gender bias from population control policies of the past.

Chinese Workers

During these “interesting-times” as the Chinese are wont to call difficult times, a restructuring of ideology will be undertaken. No more can China afford to revel on the low-priced, substandard quality products of the yesteryears. She has to produce her own quality products. To that effect the Communist Party has recently undertaken a government-sponsored program to offer $10 million to each PhD in science and mathematics to emigrate to China. The thinking goes, “If you cant grow them, buy them.” This reversal of brain drain to the West is employed as a safeguard for the future of the nation. The success of that depends ultimately on the regulatory bounds upon the private sector. An experiment of the public sector enforcing rules on the private sector has transient and limited benefits. (Read: the Eastern European Olympic athletes that excelled and then vanished. Only now in the private sector development the Tennis stars of today are athletes from the Russian states that have been unhampered by the governmental influence. So more than money will entice a nation into excelling).

Economies start and grow with an impetus of real demand. These economies are sustained till the demand is met or the collective desire for the products weaken. Such weaknesses lead to economic collapses (Ireland. Iceland, Greece and Portugal) If countries sustain themselves, blindfolded into a sense of security by politically ambitious people or despots (Tunisia, Egypt, Libya, Bahrain), they will and always pay a price. As will other nations dependent on the needs of the oil produced by outside sources. So where will this new chasm of revolutionary takeovers by the people, yearning for freedom, lead the entire oil enslaved world ? We don’t know yet. 

Global Oil Output 

But there are indications that countries like China and India have economic slow downs too thus leading to diminishing needs for energy. The overall decline in economies will soften the oil shock. Inventory surpluses will regulate the price per barrel lower and that might soften the landing for the matured economies.

So where does that leave us. It is quite simple when you think about it. A country will thrive because of its desires to innovate, develop and create saleable items. Living in the luxury of the past will collapse that historical grandeur (Roman Empire). Rome fell because of expansionistic tendency and abundance of forfeited wealth. 

Hadrian Wall

The Hadrian Wall stands as a testimony to that failure. A country that has softened in the middle with constant needs and desires but without the want to create and develop is surely at the brink of an economic abyss. Equally a government tying the hands of its most productive citizens, will, by virtue of that force destroy its capabilities to produce and prosper. Governments must unencumber its citizens to produce capital for all to enjoy. The US has lived in an Adam Smith world for along time and seen unlimited growth and progress. Now it seems that the train has taken a detour towards a Keyensian philosophy of tying the public sector to the private sector to soften the bumps on the undulating roads of economic uncertainty. Economies are like species, living by the creed of "the survival of the fittest." 

An economy can withstand shocks. But a weathered economy without foundational resources to create new products cannot and will not survive.

So back from the flight in our spaceship, the earth becomes a manageable concept. Doesn’t it? Nations need their governments to unencumber its citizens to create and manage the wealth and provide guidance towards such aims.

Scaled economies blossom by force of demand for products not by entitled citizenry. Invoking such disciplines requires leadership and a dedicated freed promise of a realizable good future.

In the end as in the beginning economics is about barter between parties for product or services. The price is based on supply and demand, nothing more or less. “Create a product sell and reap the benefit.”

The political rhetoric not withstanding, the data on the economic outlook for the United States and especially for the emerging markets is pretty good and on solid grounds. The US is still by far and wide the largest economy in the world. It has the most earnings per capita. It has the third best entrepreneurial spirit behind Denmark and Canada. It is still the most innovative country in the world although the gap is narrowing.

The risk the US faces is the growing public debt to the GDP which as of Q4 of 2010 stood close to 60%. Here it is important to note that economies stop growing or stagnate when the debt increases past 90% of GDP. The case in point being Japan which was recently dethroned as the second largest economy of the world due to its public debt of 180% of GDP. Japan is still reeling from a deflationary shock of almost two decades and faced with an aging population the prospects look bleak.

So all in all as go the economies of the households so do those of the countries. Productivity is the way to prosperity.

(All graph data is obtained from the IMF or the OECD)