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Poland's economic experiment based on Thomas Piketty

bloomberg.com

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Re: Poland's economic experiment based on Thomas Piketty

#11

Post by 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.

Re: Poland's economic experiment based on Thomas Piketty

#12

Post by ucaetano »

ed_balls wrote: post #2

> 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?

> 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.

Re: Poland's economic experiment based on Thomas Piketty

#13

Post by nkkollaw »

the_nozzle wrote: post #7
Hasknewbie wrote: post #3

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 administr…

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 judi…

> 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..?

Re: Poland's economic experiment based on Thomas Piketty

#14

Post by baq »

ucaetano wrote: post #12
ed_balls wrote: post #2

> 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?

> 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.

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).

Re: Poland's economic experiment based on Thomas Piketty

#16

Post by epistasis »

baq wrote: post #14
ucaetano wrote: post #12

Earlier quoted context omitted.

> 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.

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).

Charging rent doesn't necessarily have to be rent-seeking. The Bay Area suffers from a severe and self inflicted housing shortage, meaning that landlords and property owners are actively rent seeking by not letting housing change to match demand.

Re: Poland's economic experiment based on Thomas Piketty

#17

Post by bobthechef »

ucaetano wrote: post #12
ed_balls wrote: post #2

> 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?

> 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.

> renting is better to society as a whole.

Care to explain?

I would say that widespread renting is actually quite terrible. It means that property is kept in the hands of class of landowners (and when wealth is concentrated, this also tends to concentrate power); that instead of investing one's income, renters are basically paying off the owner's mortgage; that generally, people prefer to own, and so widespread renting is a sign of being unable to participate in the real estate market; that it generally is associated with a rentier economy.

So, no, I do not think renting is better. At all.

Re: Poland's economic experiment based on Thomas Piketty

#18

Post by [deleted] »

ucaetano wrote: post #12
ed_balls wrote: post #2

> 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?

> 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.

[deleted]

Re: Poland's economic experiment based on Thomas Piketty

#19

Post by the_nozzle »

nkkollaw wrote: post #13
the_nozzle wrote: post #7

Earlier quoted context omitted.

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 judi…

> 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..?

Most of the supreme court judges still hail from the old system (not sure of the average age but it's got to be around 70). Communism/socialism was in a slow decline when they started their careers, but that does not change the fact that they swore their fealty to the communist party.

Re: Poland's economic experiment based on Thomas Piketty

#20

Post by Analemma_ »

baq wrote: post #14
ucaetano wrote: post #12

Earlier quoted context omitted.

> 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.

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).

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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