Ray Harvey

The dynamic Doctor Mariela Resendes (M.D.) is a private practitioner who spent her previous 5 years as the Managing Partner/CEO of the largest Radiology practice in the San Joaquin Valley of California, CMI Radiology Group. Just recently, she wrote an irrefutable and scathing essay on the coming healthcare disaster that Barack Obama and his clownish administration have just unleashed. I reprint it here in full:

As a practicing doctor in California it troubles me that those with the ability to influence health care legislation have either been politically motivated to remain silent, or strikingly inarticulate when it comes to voicing the major issues patients and taxpayers will face with the new health care bill. My own, long-held view has been that any reform should be of the free market variety.

In that sense, I’m increasingly scared as I learn more about what’s inside the health legislation passed by Congress not long ago. Despite the rising level of unhappiness with what has transpired, it dismays me that the general public, like me, is not fully aware of the financial tsunami that is on the way for patients, insurers and hospitals thanks to this legislation, not to mention the irregular way in which it was passed.

In the newspapers we all read that the legislation was passed via reconciliation. Most people do not understand what this represented. What Congress did was to pass this legislation under the Congressional Budget Act of 1984, which allows a loophole to avoid a 60 vote filibuster in laws which refer to changes in revenue and spending amounts; i.e. budgetary issues.

The legislation which Congress passed certainly does affect the budget, but clearly the bill’s intent wasn’t budgetary; rather it concerned dramatic changes for a large portion of our economy: health care. Given the bill’s intent, one can only hope that the upcoming elections bring greater ideological balance so that what promises to be damaging can at the very least be amended.

“Obamacare”, as it is colloquially termed, is financially a disaster for doctors, hospitals, insurers, and will ultimately be a disaster for our nation’s budget. It is also unfortunate for patients needing care.

Obamacare’s proponents tout the legislation’s cost controls, along with expansion of coverage for those who currently do not have insurance. The policy wonks seek cost containment and “efficient” use of resources. More realistically, cost containment could only be achieved if access to care were rationed.

Rationing in mind, Rahm Emmanuel’s brother published a very well received paper in the New England Journal Of Medicine about efficient or optimal deployment of resources in health care. The upshot is that a young man is worth spending a lot of money on, a young child much less, and for seniors, pretty much nothing; all in a calculated return on investment model.

For physicians, Obamacare initially offered promises of tort reform, as well as promises to reverse the Medicare cuts that made it so difficult for physicians to practice. Neither is in the final legislation. As a result, doctors will continue to practice defensive medicine, and for doing so will face 20%+ cuts in their Medicare payments.

Physicians in primary care will initially see an income boost from 2011-2014, thus encouraging them to take on indigent patients the system needs to absorb. Unfortunately, starting in 2014, the payments per patient will fall for primary care doctors too.

Specialists will receive a financial hit right from the beginning. The goal here is to have less in the way of specialists, and more general practitioners. On its face this will drive more doctors into early retirement.

As for the physicians that choose to continue practicing, they’ll have difficulty staying afloat financially, and many will seek employment opportunities similar to those of “foundation” practices (such as those seen in states like California where hospitals can’t employ physicians), or hospital owned practices in other states.

The explicit goal here is to slow the move toward private practice. Doctors in foundation types of practices act more like union or shift-workers, and less like professionals. Their productivity tends to be lower than in traditional private practices; ergo more doctors are needed for a similar number of patients. Considering a scenario of rising physician retirement alongside a large increase in the number of patients, it is unclear how treatment and diagnosis will occur in a timely fashion.

Hospitals are similarly not going to fare well, and many will simply go under. Previously, hospitals took in higher payments from privately insured patients in order to care for those who couldn’t pay, or for those covered by Medicaid. At the same time, hospitals which had a higher number of indigent patients also received what is called disproportionate share funds from state and federal governments. Rural hospitals in particular received extra funds.

But with Washington’s new mandate, the expectation is that all of the previous non-paying patients will now pay for themselves such that subsidies for indigent-care will be eliminated. Unfortunately, this will occur in concert with reduced inflows from privately insured patients whose costs will be reduced to Medicaid levels.

In short, the money from the increased volume of “paying” patients is not enough to counter the loss of disproportionate funds and decreased classic private insurance payments. The net result will be a deficit for many hospitals. They will not be able to keep their doors open if they sustain persistent losses, which is what is expected.

Many insurance companies will be squeezed out of existence thanks to rules that will bar them from denying coverage for pre-existing conditions. And unlike the federal government they won’t be able to operate in the red forever. The end result points to a single-payer system run out of Washington.

Looking ahead, it is increasingly apparent that by 2020 we will have severe cuts in service thanks to rising retirement among doctors, a decrease in the number of private insurers, and a reduction in the number of hospitals due to federal mandates that fail to marry costs with services. The end result will be rationing and delay of elective procedures, denial of expensive but effective treatments a la England, and most likely a single-payer system the likes of which is seen in other, less advanced health care systems around the world.

Here is more on how our healthcare crisis began.

And here is the real solution.

In the Concise Guide To Economics, author and economist Jim Cox correctly explains that the Multiplier is one of the major components of Keynesian policy. For those who still don’t know, Keynesian economics — named after the disastrously incorrect John Maynard Keynes — are what Barack Obama as well as George W. Bush (et al) espouse in full.

The following explanation of the Multiplier Theory, though exceptionally clear and cogent, gets a bit technical, but please read through it. It is short, and it is also crucial that everyone understands the degree to which economic illiteracy grips the political leaders who have power over us.

The multiplier effect can be defined as the greater resulting income generated from an initial increase in spending. (For example, an increase in spending of $100 will generate a total increase in income received of $500 as the initial income is respent by each succeeding recipient–these figures are based on an assumption that each income receiver spends 80% of his additional income and saves 20%, the formula being Multiplier = 1 / % Change in Saving.)

Fundamentally, the multiplier is theory run amok, as Henry Hazlitt has explained in The Failure of the New Economics:

If a community’s income, by definition, is equal to what it consumes plus what it invests, and if that community spends nine-tenths of its income on consumption and invests one-tenth, then its income must be ten times as great as its investment. If it spends nineteen-twentieths on consumption and invests one-twentieth, then its income must be twenty times as great as its investment….And so ad infinitum. These things are true simply because they are different ways of saying the same thing. The ordinary man in the street would understand this. But suppose you have a subtle man, trained in mathematics. He will then see that, given the fraction of the community’s income that goes into investment, the income itself can mathematically be called a “function” of that fraction. If investment is one-tenth of income, income will be ten times investment, etc. Then, by some wild leap, this “functional” and purely formal or terminological relationship is confused with a causal relationship. Next the causal relationship is stood on its head and the amazing conclusion emerges that the greater the proportion of income spent, and the smaller the fraction that represents investment, the more this investment must “multiply” itself to create the total income! p. 139

A bizarre but necessary implication of this theory is that a community which spends 100% of its income (and thus saves 0%) will have an infinite increase in its income–sure beats working!

A further reductio ad absurdum is provided by Hazlitt:

Let Y equal the income of the whole community. Let R equal your (the reader’s) income. Let V equal the income of everybody else. Then we find that V is a completely stable function of Y; whereas your income is the active, volatile, uncertain element in social income. Let us say the income arrived at is:

V = .99999 Y

Then, Y = .99999 Y + R

.00001 Y = R

Y = 100,000 R

Thus we see that your own personal multiplier is far more powerful than the investment multiplier, it is only necessary for the government to print a certain number of dollars and give them to you. Your spending will prime the pump for an increase in the national income 100,000 times as great as the amount of your spending itself. pp. 150 -151

The multiplier is based on a faulty theory of causation and is therefore in actuality nonexistent. Keynesians today will often admit to this but cling to their multiplier by citing the fact that it has a regional effect. Without them saying so explicitly, what this means is that if income is taken from citizens of Georgia and spent in Massachusetts it will benefit the Massachusetts economy(!).

The multiplier is an elaborate attempt to obfuscate the issues to excuse government spending. It and Keynesian theory are nothing more than an elaborate version of any monetary crank’s call for inflation; Keynes managed to dredge up the fallacies of the 17th century’s mercantilist views only to relabel them as the “new economics”!

(Link)

The following questions were submitted to me some time ago by Mr. Maxwell Hoaglund, of Slagheap magazine, which unfortunately closed its doors before this penetrating Q & A appeared. I publish it here with Mr. Hoaglund’s full knowledge and permission.

Q: Congratulations on the success of your novel More and More unto the Perfect Day. Where can we read an excerpt?

Ray Harvey: At my website.
[Editor's note: You can also hear an excerpt here:

Q: If your finger isn't typing, where is it?

Ray Harvey: It's on the pulse of the people.

Q: Are you really a bartender?

Ray Harvey: Yes.

Q: What is your signature cocktail?

Ray Harvey: The Harvey Fingerbanger.

Q: It sounds fantastic.

Ray Harvey: You have no idea.

Q: What all's in it?

Ray Harvey: Two parts finger, three parts banger. The rest is secret.

Q: Working in the food and beverage industry -- has it made you into a foodie?

Ray Harvey: Perish the thought!

Q: Do you have dietary restrictions? Vegetarian? Vegan?

Ray Harvey: No, no, no. Not that which goeth into a man can defile him but only that which cometh out; for out of the abundance of the heart, the mouth speaketh. Gourmandizing of any kind is one of the surest signs of stupidity. The food snobbery of the vegan or the food snobbery of the vegetarian or the food snobbery of the organic-only cult, no matter how shabbily dressed, is every bit as beastly as the food snobbery of the rich and famous.

Q: As an anti-environmentalist --

Ray Harvey: I'm not primarily an "anti-environmentalist." I'm primarily an anti-statist. Environmentalism is just one of many species of the genus Statism, nothing more, nothing less.

Q: As an anti-statist, are you stalking your victims? If so, doesn't your tendency to shoot from the hip startle them?

Ray Harvey: On the contrary, it lulls them into a false sense of security.

Q: Your article on Postmodernism, including the comments, created a small sensation in our office. What, may I ask, is reality? Can you prove existence?

Ray: Reality is existence. And existence is that which exists. Reality is that which is. The only alternative to existence is non-existence. But non-existence does not exist. There is only existence. In the words of Victor Hugo: "There is no nothing." Regarding whether we can prove existence: yes. Proof, by virtue of what it is, assumes existence. How so? Existence must necessarily come before proof, because of what proof actually is: i.e. the preponderance of evidence which admits no other alternative. Evidence means that something exists. The very proof of existence is existence itself, to which there is only one alternative: non-existence. But non-existence does not exist. Only existence exists.

Q: Where do thoughts go when one is not thinking?

Ray Harvey: Where does the wind go when it's calm? Said Voltaire.

Q: Who or what have been your biggest literary influences?

Ray Harvey: Karl Shapiro, Dostoevsky, Blood Meridian and Suttree [by Cormac McCarthy], Nine Stories [by J.D. Salinger].

Q: More than once, you’ve been accused of declaiming, as you’ve also been accused of ribaldry.

Ray Harvey: Paraphrasing Nabokov, Conventions and cliches, particularly of the sexual variety, breed remarkably fast: the blotchy buttock, the bulbous breast, the baggy balls, phony moans of bliss, the endless talky-talky of dick this, ass that, vagina this, oral that — it’s worse than primitive; it’s boring. The lack of style in these discussions of various copulation techniques is enough to wilt the most tremendous of boners.

Q: What is the real difference between Democrats and Republicans?

Ray Harvey: There is no real difference; the difference is purely superficial. Death by taxation, or death by so-called tradition; death by property expropriation, or death by middleclass morality. Both are anti-freedom.

Q: I see –

Ray Harvey: But I’d like to say a little more about that: if you’re going to call yourself liberal, or if your going to call yourself conservative, fine. At the very least, though, have the decency to refrain from calling yourself a proponent of freedom. Freedom is one thing and one thing only.

Q: Yes?

Ray Harvey: That absence of compulsion. Freedom does not does not guarantee wealth; it does not guarantee success. It simply means that you are left alone. Freedom means no entitlements, no minimum guarantees, no help (or hindrance) at all, no public education, no “free” health care, no drinking laws, no illegalization of drugs, and so on.

Q: What exactly do you mean?

Ray Harvey: I mean that everyone believes in freedom — until everyone finds out what freedom actually means. Then no one believes in it. Freedom does not mean “freedom until it comes to legalizing drugs.” Nor does it mean “freedom until it comes to doing away with speed limits.” It does not mean “freedom until it comes to recycling.” It does not mean “freedom until it comes to a woman’s right to decide what happens to her own body, and what lives off that body.” Freedom does not mean “freedom until liquor stores are open on Sunday.” It does not mean “freedom until it comes to no drinking-age laws.” Freedom doesn’t mean “freedom until a war breaks out, at which time you can lawfully be drafted.” None of that is freedom.

Q: What is justice?

Ray Harvey: Justice is the legal recognition of the fact that each and every human being, regardless of race, sex, sexual orientation, color, class, or creed, is individuated and sovereign, and no human or government institution may therefore infringe upon another’s property or person.

Q: Why is justice important?

Ray Harvey: The path of the just is as a shining light, which shines more and more unto the perfect day. But what is the alternative? Only injustice. We are each born free. Freedom is a birthright.

Q: Gordon Gano once said “Happiness is a word for amateurs.” Do you think that’s true?

Ray Harvey: No, I do not.

Q: What is happiness? A chocolate turtle?

Ray Harvey: Yes.

Q: Would it be fair to say that you see life as a funny but cruel joke?

Ray Harvey: No, it wouldn’t fair. That question has the unmistakable shimmer of inanity. Life is neither inherently silly, nor inherently angst-ridden. The only alternative to life is death. And death is what gives life meaning in the sense that death is what life constantly strives against. But it’s not the other way around: from the perspective of the dead, life obviously doesn’t carry any particular relevance. I think you may be confusing me with the walleyed Existentialist Jean Paul Sartre, or one of his ventriloquist dolls.

Q: Where is The Good located?

Ray Harvey: The Good ultimately resides inside the human brain, which is conceptual by nature and operates (therefore) by means of choice. There can be no good nor evil if there is no choice. Thought is not automatic. Thought requires effort; it requires an act of will. Quoting the psychologist Rollo May: “When we analyze will with all the tools that modern psychology brings us, we shall find ourselves pushed back to the level of attention or inattention as the seat of will. The effort which goes into the exercise of will is really effort of attention; the strain in willing is the effort to keep the consciousness clear, i.e. the strain of keeping attention focused.” That is where The Good resides. That is ultimately the source of all good and all bad behavior: the choice to pay attention or not. The rest is just an elaboration on this.

Read the previous interview here.