Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Poland's economic experiment based on Thomas Piketty

bloomberg.com

Post reply on HN
Print view View original

61–70 of 88 posts

Re: Poland's economic experiment based on Thomas Piketty

#61

Post by knuththetruth »

zombieprocesses wrote: post #50
ucaetano wrote: post #11

> 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 provid…

> Sad to read this. Most LatAm leftist governments tried the same formula over the past 2 decades, with disastrous consequences. Korea, Taiwan, Japan and china tried it with spectacular results. Also, latin america is a especial situation because they are within the US sphere of influence. Their economic situation is far more complex because of it. > exactly like the one in Argentina and Brazil. Brazil and especially…

Yeah, it's quite interesting how the parent skirts over all the history of US involvement in Latin American during the Cold War, while at the same time ignoring any inconvenient counterexamples.

Re: Poland's economic experiment based on Thomas Piketty

#62

Post by dv_dt »

ucaetano wrote: post #49
dv_dt wrote: post #48

Earlier quoted context omitted.

If you're borrowing at a fixed interest rate (or buying outright), you're also locking in price for housing against future rent increases.. and, currently in CA, against uncontrolled property tax increases too. It doesn't really prevent you from moving to another job, one could always rent out the owned property and rent in your new location. (Though if the area you own in has crashed in prices that's a more difficul…

> If you're borrowing at a fixed interest rate (or buying outright), you're also locking in price for housing against future rent increases.. and, currently in CA, against uncontrolled property tax increases too. Again, that's irrelevant from a financial perspective. The rates are priced to account for the risk of increase, and in this case the markets are liquid and competitive enough to allow correct market pricing…

> Again, that's irrelevant from a financial perspective. The rates are priced to account for the risk of increase, and in this case the markets are liquid and competitive enough to allow correct market pricing.

The markets can be irrational for longer than you can stay solvent. You can pull out silly tropes like some concept of "correct market pricing". Which means "correct" according to some group of concerns vs some other group of concerns. Rarely do we get to directly design markets, and designed changes often go vastly wrong with unintended side effects.

It's not irrelevant from a life stability perspective if you get priced out of your domicile for rent increases, vs keeping it for an owned property. People can individually value that stability or not, but it's a real consideration.

There is also large overhead in not choosing the time that one wants to move if rents increase uncontrollably.

Re: Poland's economic experiment based on Thomas Piketty

#63

Post by ucaetano »

dv_dt wrote: post #62
ucaetano wrote: post #49

Earlier quoted context omitted.

> If you're borrowing at a fixed interest rate (or buying outright), you're also locking in price for housing against future rent increases.. and, currently in CA, against uncontrolled property tax increases too. Again, that's irrelevant from a financial perspective. The rates are priced to account for the risk of increase, and in this case the markets are liquid and competitive enough to allow correct market pricing…

> Again, that's irrelevant from a financial perspective. The rates are priced to account for the risk of increase, and in this case the markets are liquid and competitive enough to allow correct market pricing. The markets can be irrational for longer than you can stay solvent. You can pull out silly tropes like some concept of "correct market pricing". Which means "correct" according to some group of concerns vs som…

> The markets can be irrational for longer than you can stay solvent.

Cute quote, now show me the data.

> You can pull out silly tropes like some concept of "correct market pricing". Which means "correct" according to some group of concerns vs some other group of concerns. Rarely do we get to directly design markets, and designed changes often go vastly wrong with unintended side effects.

Correct market prices are the cost plus risk-adjusted returns. Essentially, the point at which economic profits are zero.

> It's not irrelevant from a life stability perspective if you get priced out of your domicile for rent increases, vs keeping it for an owned property. People can individually value that stability or not, but it's a real consideration.

That only happens if there is an artificial constraint in supply, generated by NIMBY policies.

> here is also large overhead in not choosing the time that one wants to move if rents increase uncontrollably.

Again, with freedom to build, prices won't move like that.

Re: Poland's economic experiment based on Thomas Piketty

#64

Post by ucaetano »

asdsa5325 wrote: post #56
ucaetano wrote: post #21

Earlier quoted context omitted.

> Care to explain? Sure! Caveat: please ignore taxes, emotional value and a few other country-specific details. When you're buying a home, you're doing 3 independent things: 1) Borrowing money (optional) 2) Making a capital investment into an illiquid, immovable asset 3) Renting an asset that you own to yourself for you own usage Give how much little money you have (compared to a company) and how your earnings and sp…

(2) is where your argument falls apart. Everyone wants to buy houses nowadays- it's not illiquid. In large cities, most houses only stay on the market for a few days. Buying houses with cash is becoming increasingly common also.

> (2) is where your argument falls apart. Everyone wants to buy houses nowadays- it's not illiquid.

It is illiquid. How long do you think it takes to sell a house?

The median home takes 60+ days to sell.

Don't let your limited view shape how you see the world. The world isn't the Bay Area or similar locations.

Re: Poland's economic experiment based on Thomas Piketty

#65

Post by ucaetano »

bobthechef wrote: post #51
ucaetano wrote: post #21

Earlier quoted context omitted.

> Care to explain? Sure! Caveat: please ignore taxes, emotional value and a few other country-specific details. When you're buying a home, you're doing 3 independent things: 1) Borrowing money (optional) 2) Making a capital investment into an illiquid, immovable asset 3) Renting an asset that you own to yourself for you own usage Give how much little money you have (compared to a company) and how your earnings and sp…

I couldn't help but notice that you didn't address anything I wrote. You also ask me to ignore important factors like property tax which, frankly, can make owning land unprofitable for landlords if people move away. Also, an economics stripped of human beings and divorced from the social and the political is not economics, just some Procrustean nonsense cooked up in an armchair. Economies exist to serve their partici…

> You also ask me to ignore important factors like property tax

Property tax is highly variable from location to location. But if you give me an example of property tax, I can tell you which makes more sense.

> an economics stripped of human beings and divorced from the social and the political is not economics, just some Procrustean nonsense cooked up in an armchair

Sure, and if I don't like the law of gravity, it should be abolished!

> immobility is a problem only when there is a scarcity of jobs

Which in the long term is everywhere.

> Appealing to "better allocation" and "adaptation" as ways to defend mobility is, again, the result of having adopted some kind of dehumanized economics that treats people like units of goods in a distribution chain. Mobility is really not the thing you should be most worried about.

You argument boils down to: "I don't like what you're saying, you're mean". I don't care, that's how life works. Not liking it won't change it.

> Second, it's not an either/or proposition. We can have renters and owners. Renting can cater to those who are mobile. But when a market is dominated by renters, then your market is fucked (see above).

Sure, that's the ideal market. Don't provide any incentives to owning or renting, and let people decide freely.

Re: Poland's economic experiment based on Thomas Piketty

#66

Post by classicsnoot »

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…

I would honestly like to know how clarifying the historical accuracy of claims is somehow denying the Holocaust. Your comment has been flagged so it is obvious the Cowards of Dang's Round Table have decided your invective inspired to much vitriol for their liking, but I think your self imposed mental illness should be given over to the light, not pushed into the shadows to fester in the minds of the inadvertently as well as willfully ignorant.

Polish history is fraught with calumny and misunderstanding. Sometimes they are apathetic, anti-Semitic fools, other times they are reasonable and intelligent hosts of a hard pressed diaspora population. None of this has any bearing on the fact that the Poles are in a three-way tie for most fcked up by WWII. IMO they were hurt the most. On top of the travails of WWII they were then thrust into the Soviet sphere. I know this will seem like a reprehensible statement, but if you want to learn about a group fuked by their neighbors and shunned by the world with their history erased and their culture besmirched internationally, it is the the children of Rejtan, not Judah. Consider that both groups lost roughly the same numbers (gross total) but one group gained a Homeland as well as an upward trajectory that apparently has no ceiling while the other was doomed to the orbit of the worst political and social experiment in recorded history.

So, I say to you: before you vomit up some BS you acquired on r/postcapitalism look into the deep history of a person, place, or people when they seem to act atypically or illogically. Sometimes the history can illuminate.

If you think my remonstration is misplaced or my recounting of history sloppy or inaccurate, I'd love to carry on a deeper conversation.

... assuming I'm not shadow banned for thoughtcrimes ;)

Re: Poland's economic experiment based on Thomas Piketty

#67

Post by classicsnoot »

nkkollaw wrote: post #58
bobthechef wrote: post #22

Earlier quoted context omitted.

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 li…

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 scapego…

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.

Re: Poland's economic experiment based on Thomas Piketty

#68

Post by jwilk »

genericthrow wrote: post #53

"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…

How come a bank is worse than a socks drawer?

Re: Poland's economic experiment based on Thomas Piketty

#69

Post by ucaetano »

zombieprocesses wrote: post #50
ucaetano wrote: post #11

> 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 provid…

> Sad to read this. Most LatAm leftist governments tried the same formula over the past 2 decades, with disastrous consequences. Korea, Taiwan, Japan and china tried it with spectacular results. Also, latin america is a especial situation because they are within the US sphere of influence. Their economic situation is far more complex because of it. > exactly like the one in Argentina and Brazil. Brazil and especially…

> Brazil and especially argentina's financial problems were a result of international borrowing, not domestic borrowing.

Patently false. The public debt in Brazil has been almost entirely internal for the past 10 years. Should I show you a chart to settle it?

> Korea, Taiwan, Japan and china tried it with spectacular results.

Quite the opposite, actually. They received massive inflows of foreign investment, and very high domestic savings rate.

That's the difference you're not seeing: the Asian countries you mentioned have a history of very high savings rate, this generates a stock of capital that the government and companies can borrow at low costs to develop. Poland (and the LatAm countries I mentioned) have very low or negative savings rate, and almost no capital stock, so any increase in borrowing by the government has to be met with foreign capital or it will cause inflation and higher interest rates.

Re: Poland's economic experiment based on Thomas Piketty

#70

Post by ucaetano »

mrwebmaster wrote: post #60
ucaetano wrote: post #11

> 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 provid…

What disaster do you see in Argentina? During the last years It cancelled all of it's debt with the IMF (in one payment, and this debt was generated many years ago) and also with the Paris Club. It's Central Bank is in relative good position. A monetary issue is the high inflation rate, but I wouldn't call it an "economic disaster" since unemployment is relatively low, if we compare it with historical levels or with…

https://www.economist.com/news/briefing/21596582-one-hundred...

https://www.economist.com/news/americas/21704824-battle-over...

https://www.economist.com/blogs/americasview/2014/06/argenti...

Almost a decade of average zero growth, declining quality of life, crumbling infrastructure. It is sad to see the state of destruction the country was left in after Christina left.

Post reply on HN