
Poland's economic experiment based on Thomas Piketty - behoove
https://www.bloomberg.com/view/articles/2018-02-23/poland-s-economic-experiment-starring-thomas-piketty
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ucaetano
> That means a pause in privatization, which Morawiecki says contributed up to
> 14 billion zlotys a year to the budget, a preference for domestic over
> foreign borrowing (the share of Poland's debt owned by foreigners is down to
> 50 percent from about 60 percent three years ago) and a reliance on state
> enterprises to increase investment because private companies are too small
> and not boldly expansionist enough to provide the desired boost.

Sad to read this. Most LatAm leftist governments tried the same formula over
the past 2 decades, with disastrous consequences. Focusing public borrowing on
the domestic market means that the government will compete with households and
businesses for capital, which have a much harder time raising capital
internationally.

This will make it much harder (and raise interests) for households and
businesses to secure capital for new investments (especially when the domestic
savings rate is so low), restricting supply growth and possibly leading either
to inflation or to an increase in imports.

That, coupled with a low or nill savings rate, an over-reliance on government
for retirements and a low retirement age, means an economic disaster, exactly
like the one in Argentina and Brazil.

~~~
conanbatt
Domestic borrowing is a guarantee of inflation, because the incentive to
dilute the debt is too great to not use.

~~~
drak0n1c
Japan has incredibly high levels of domestic borrowing, but has long suffered
deflation. What factors make Japan the exception?

~~~
ucaetano
Japan is a developed country (low capital requirements) with a huge stock of
capital which it has exported around the world. It can borrow plenty
internally before there is a shortage of capital. It has $1.3 trillion in
foreign reserves.

Poland is a developing country (high capital requirements) with no accumulated
capital and negative savings, its foreign reserves are 10% of Japan's.

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genericthrow
"The problem with Poles is they don't want to save," Borowski says.

In 2001 so called 'Belka's Tax' was imposed, which is annulling the capital
gains tax (19% or something). This makes any placing to actually lose money
(even more if you count inflation in). So saving money in sock's drawer is out
of question because of inflation, in banks it's even worse, that's been going
on for 17 years. How we're suppose to save then?

~~~
foobar2020
It's 19% of the capital gains, not of the invested money. The parent comment
makes it seem like the tax is absurd. Here's a list of countries that
implement this tax, including Poland:

[https://en.wikipedia.org/wiki/Capital_gains_tax](https://en.wikipedia.org/wiki/Capital_gains_tax)

You _can_ save and invest in Poland.

~~~
genericthrow
Right, I might phrased it imprecisely. Anyway let me show you screenshot from
my bank taken today (sorry it's for some reason only in polish):
[https://imgur.com/a/ISthS](https://imgur.com/a/ISthS)

so putting 10k PLN (2k EUR) for 24 months in, you'll gain 50 EUR and small
text at the bottom says it's BEFORE taxation! Average gross wage depends on
region, but it's around 1k EUR per month. I cannot find median, values but
it's much lower, most people here don't have two cents to rub together not to
mention to put twice the average salary for 24 months to get 50 EUR

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ed_balls
> That has meant a negative household saving rate, compared with Germany's 10
> percent of disposable income.

Isn't it because majority of Germans rent and majority of Poles buy?

~~~
ucaetano
> Isn't it because majority of Germans rent and majority of Poles buy?

No. Economically, it doesn't make a difference. Although renting is better to
society as a whole.

~~~
baq
I never understood that. I keep hearing about landlords ultimately sucking all
the earnings of the society that lives on the land they own (see the Bay Area
for an example, where a mattress in a wardrobe costs you $1k or whatever).

~~~
Analemma_
It's complicated, there are pros and cons of each. The fewer landlords you
have the better, but at the same time, situations like the United States--
where half the country has gigantic mortgages and relies critically on their
home being an always-appreciating asset-- isn't great either. Economists have
argued about this forever and there's no clear right answer.

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freech
This is protectionism for capitalists. At the end, capital competes for labor
and less foreign capital means domestic capitalists have to pay less.

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Hasknewbie
I can see that Bloomberg is still bloomberging:

First paragraph:

>> "Poland: reasonable strategy roiled by leftist impulses."

The current government is a far right Catholic party that has just enacted a
law partly denying the Holocaust (somewhat related to this, one of their
senator sparked a scandal by posting actual Nazi propaganda online), and the
country may have its EU voting right suspended due to the administration's
attacks against the judiciary. But yeah the most important thing is that one
of their economical policy happens to be left-leaning.

On the economist Thomas Piketty:

>> "Last month, the anti-capitalist economist wrote about ..."

Piketty is left-leaning, not "anti-capitalist".

Caption of a Piketty photograph:

>> "Only academic. Until now."

Piketty has been a (prominent) advisor for politicians on the French left for
at least a decade.

You go Bloomberg "News". You keep doing you.

~~~
the_nozzle
Pump your breaks there kid - the only thing that is being denied is that
occupied Poland had anything to do with the installment of the holocaust by
the Germans (they were next in line to the chimney). As much as I don't like
the asshats from PiS, I do understand where they are coming from, after seeing
"Polish concentration camps" in the western press on a monthly basis. To your
other point - most of the polish judiciary has roots in the communist
prosecution apparatus and is actively shielding all of the assholes that had a
soft landing after the "toppling" of the communist government. Fuck'em.

~~~
nkkollaw
> most of the polish judiciary has roots in the communist prosecution
> apparatus and is actively shielding all of the assholes that had a soft
> landing after the "toppling" of the communist government

I was under the impression that most of the people that were working as judges
during the Soviet occupation are now dead or retired..?

~~~
bobthechef
He didn't say they were all judges. He said they had roots in the Communist
establishment (his focus is on the deeply embedded secret police, but it goes
beyond that). You also have Communist/post-Communist dynasties and clans where
power is inherited and shared through ties and nepotistic practices stemming
from the Communist period.

It's nice to think that the fall of Communism automatically led to the
wholesale liquidation of the Communist establishment, but that's fabular, and
after you think about it, quite a silly thing to expect. It would be
disastrous to simply remove them without having prepared to replace them. When
a certain establishment had been running the state for half a century, with
all its ties and knowledge and competencies, you couldn't just expel them all
just like that. They and they alone have been running the state for almost 50
years! (Especially given that the pre-War elites were either exterminated by
the Nazis and the Soviets, or fled the country, or whatever, but outsiders
unless they joined the ranks of the People's Republic).

So, unless you manage this transition somehow with the end goal of reducing if
not disrupting the continuation of that corrupt establishment[0], an
establishment known for profiting for its own selfish gains[1] and trained by
Moscow to function as essentially colonial puppets of foreign interest, you
still have a problem.

[0] Not everyone in that establishment was corrupt, of course.

[1] Hence the actual way in which state assets were privatized, often for
funny money to foreign owners, sometimes for liquidation and removing domestic
sources of competition, and in ways where former party apparatchiks and the
like profited from their sale.

~~~
nkkollaw
Would you compare the change from being part of the USSR to a republic to a
change of government from Monarchy to republic? I think you just start over.

I'm not Polish so I don't know the situation exactly, but it's also been 30
years. I live in Poland and I see nothing even remotely resembling communism
(besides the ugly Soviet buildings they haven't demolished yet). I think the
government is using this as a scapegoat to push their agenda, but that's just
an impression.

~~~
classicsnoot
Poland was a part of the Eastern Bloc, not the USSR.

It is incredibly naive to think that a regime change somehow means all of the
social and status networks just magically change. That is as silly as
believing that a change in President == a change in bureaucracy.

I dream of living in Poland, or Czechia, someday. I know it isn't perfect, but
it seems honest.

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mrybczyn
Article written by Russian banker living in Germany. Can't possibly be biased.

~~~
dang
Could you please read
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)
and follow those rules when posting here? They include: "Please don't post
shallow dismissals, especially of other people's work." Doing that dumbs this
place down, and we're hoping for better.

