Thanks for Explaining! – Twisted Light

The Bunsen Burner has an interesting story about using twisted light to transfer data. For the technically astute, they had the following statement in the story:

Previously it was revealed that beams with different orbital angular momentum (OAM) states — different degrees of spin — could be used to carry more data, and this new milestone builds on that idea, said researchers.

So if you were not familiar with the concept of orbital angular momentum (OAM), now you know what it is. It is just a technical term for different degrees of spin. Whatever that is. I guess that spin is a term people are more comfortable with, since many science-oriented layman will have seen the term, (maybe since it is discussed in A Brief History of Time.) No one knows what it is, but they take it as an explanation for a yet more obscure concept.

EU vs. Rating Agencies ?

Zerohedge has this shock headline: “Europe Launches Ban On All Policy Criticism By Scrapping Use Of Rating Agencies“. The story is reported “via Bloomberg”, but without a link. Zerohedge seems to like shocking headlines, so this is a great story for them, but it is really too shocking to be credible.

Since there was no link to Bloomberg, I asked google for help. I found a few other economics bloggers who picked up the story, but they were all quoting zerohedge. Bloomberg did not have a story with the reported headline.

It was pretty clear that the headline was misreported. I found the following story by Bloomberg: EU Lawmakers Seek to Scrap Credit-Ratings Rotation Plan. It is on the same topic of rating agencies, and a lot more realistic, but not the same headline. Then I found this comment on the Bloomberg story:

“EU Lawmakers Approve Amendment to Scrap Use of Credit Ratings
What a missleading headline. They aren’t scrapping ratings at all, only the rotational requirement. Keep on spinning bloomberg.”

So apparently the story was posted originally with an irrelevant and completely incorrect headline, and picked up by zerohedge without reading the story. Many people are so disturbed about EU monetary policy – and it is definitely disturbing – that they automatically accept any story on the subject.

In this case, the report did not fit at all with the sort of policies that the EU implements as part of their economic mismanagement. The EU, being very bureaucratic and with a strong belief in central control, creates too many regulations and regulatory bodies, not too few. If the EU had a problem with rating agencies (and they probably do), they would never simply disregard them. They would instead create a new EU rating agency, under the auspices of the IMF or similar body, which would work directly with the European Central Bank. They would absorb the rating industry into the EU, not try to push it out. So even when we recognize that the EU cannot be trusted on financial responsibility, there was still no way to believe the report that they were going to stop paying attention to rating agencies.

Little Cheer as Stocks Rise Sharply

The Wall Street Journal had this entertaining combination on their sidebar today:

As a casual observer it is easy to see why there would be some short-term excitement, even though this is hardly good news for the economy. The crash of the eurozone was just pushed off for a while, as its failing health becomes more serious. Stocks will rise as the immediate result of this transfer is good news for the Spanish economy, and for the wider EU, but investors are rightly nervous – there is no good news for the longer term. There are two reasons why the Spanish loan is good news for the short-term. First, the loan will carry Spain for a while, forestalling a failure of its banking system (and probably, of its government), which is definitely good news for now. More importantly, this loan was arranged quickly and with minimal fuss. Spain and the EU worked it out quietly, unlike the Greek bailouts which were accompanied by a lot of difficult bargaining and political issues. Many people seem to think the threat to the EU and the euro is caused by its bickering on terms of its loans and bailouts, and not because it is a flawed system. If only everyone could work nicely together, and give people money when they need it, the system would be entirely stable. (Isn’t that the logical basis for all socialism?) And now with Spain the EU has shown they can do it, and arrange a loan quickly and cleanly. This is truly very good news for anyone who supports a socialist Europe.

Israeli Energy Independence Increases Conflict?

I guess that whatever happens, if Israel is involved, it must mean more conflict. That was my first thought on seeing this headline, Israel’s Undersea Gas Bonanza May Spur Mideastern Strife – Bloomberg. Energy independence should be a big step towards lowering strife, especially given how often the pipeline from Egypt to Israel gets blown up (10 times last year, according to the article.) The article actually turned out to be an interesting discussion of the implications of finding an oil field which crosses international boundaries or disputed territory. (Lebanon did initially claim that one oil field enters its territory, but it seems that it was not a relevant claim.) So why is this theoretical future challenge news? The writer is a professor of the practice of international affairs. The article is a report of her student’s suggestions for resolving the problem of conflicting claims of underwater oil fields. It turns out it is not entirely theoretical. As she points out, this situation has occurred before. Her students suggested two possible outcomes – either the resources are shared without prejudice to the underlying issues, or development is blocked. Not surprisingly, these are the two outcomes seen in real life. She must teach well. (Or else, there are only two possible outcomes.) She does not address a third possibility, that Israel will continue to extract oil in contested fields without resolving the issue. It is strange she does not mention this possibility, as it is really the only one that fits her headline, which suggests that the discovery of oil will lead to increased strife. So which of her two possible outcomes leads to greater strife in the middle east? Obviously cooperation of any sort lowers strife, so I guess her headline is suggesting that development will be frozen by the refusal of neighboring countries to work out a way to share the resources. But that is only a continuation of the current stale mate. I guess the only reason she mentioned strife was to get reader’s attention, and I guess it worked.

Obamacare and the Poor

The Cato blog had this short piece the other day saying that Obamacare will actually hurt the poor. The basic argument is that Obamacare will cause the collapse of the insurance system, leaving everyone without coverage.

This argument is wrong if we consider a poor person with no insurance and a medical emergency. He will always gain from being able to buy into insurance at that point. Even if the value of medical insurance is significantly lower than it is today, accepting the most negative libertarian prognosis of Obamacare, it will always be better than no insurance. Even if you believe the medical insurance market will collapse entirely, as it might, the argument is irrelevant. There will either be a government-run universal insurance, or the current insurance market will be resurrected, but the relevant topic of free entry regardless of existing conditions will be moot.

Obamacare will hurt the entire society by lowering the quality and availability of medical care. Poor people will be hurt by Obamacare because it will make it more affordable to be poor, and less affordable to be self-sufficient. In the aggregate long-term view, almost everyone will be hurt. In the immediate and specific application of Obamacare, the poor will be helped.

Proponents of welfare focus only on specifics and ignore the larger implications of their policies. They do not consider how welfare may lead more people to be poor. They are not interested in the cosmic questions of why things are the way they are. Instead they only ask, given someone is poor, will he benefit from welfare in the immediate term, and the answer is always yes. Opponents of government-run welfare recognize that many people would not have been poor in the first place had there not been a generous safety net, and that helping someone in the short term will often keep them poor in the long term.