A similar phenomenon occurred in the UK, where under fears of "medical unemployment", the British Medical Association argued against increasing medical school places [0].
The attitude persists even today, where the BMA advocates that medical school entries should be limited to the number of specialty training places that follow basic training, so as to avoid the risk of doctors becoming unemployed or under-employed.
As a consequence the UK has a dearth of doctors, and those who are trained are over-worked. The government tries to alleviate the situation somewhat by recruiting from overseas.