Kaczyński's ignorance, deceit or folly?

I chanced across an interview with opposition leader Jarosław Kaczyński in Monday's Polska The Times, and found myself angered by two paragraphs about the economy, which I feel I need to comment. Here's the original Polish text, below:

Sytuacja w kraju jest w niewielkim tylko stopniu związanym z kryzysem międzynarodowym. Stan naszej gospodarki to jest efekt wyjątkowo złego sposobu rządzenia. Tak fatalnego, jak po roku 1989, jeszcze w Polsce nie było.

I'll translate as faithfully as possible into English (please offer improvements if you feel they are needed)...

"The situation in the country is only to a small degree linked to the international crisis. The condition of our economy is the result of extremely poor governance. So awful, as has not been seen in Poland since 1989."

What I find galling in this quote is the selectiveness of memory, the poor understanding of cause and effect in economics, and above all - the crass populism of the fellow.

Having sat through dozens of macroeconomic presentations by renowned economists, I can tell Mr Kaczyński that it would be a complete oddball, an absolute outlier - a crank indeed - who would categorically state that Poland's current economic slowdown has little to do with the global financial crisis. Though Poland's large domestic market insulates its economy better than smaller countries with a larger share of GDP generated by exports, Polish manufacturing sector is strongly dependent on the condition of European markets.

If we look at a country that Mr Kaczyński considers to be properly governed - Hungary - we will see that economic conditions are worse than in Poland. (Latest published data used; unemployment measure here is from Eurostat, which strips out the economically active who claim jobless benefits and is more comparable between the two countries.)

	GDP growth	Unemployment	Inflation
Poland	+1.1% (Q4 2012)	10.6% (Feb '13, Eurostat)	2.1% (Mar '13)
Hungary	-4.7% (Q4 2012)	11.2% (Jan '13, Eurostat)	4.0% (Feb '13)

The situation in Poland is indeed the worst it's been for many years, but certainly not the worst since 1989. Let's track these three key indicators to previous low points in Poland's post-transformation economic history...

	GDP growth	Unemployment	Inflation
Q1 2013	+1.1% (Q4 2012)	10.6% (Feb '13, Eurostat)	2.1% (Mar '13)
Q3 2002	+1.6% (Q3 2002)	20.2% (Aug '02, Eurostat)	2.8% (Aug '02, Eurostat)
Q1 1991	-7.0% (Q4 '91, GUS)	12.2% (Dec '91,GUS)	60.4% (Dec '91, GUS)

Things have, on aggregate been far worse. As to charges of macroeconomic mismanagement - yes, there's now little doubt that that Poland's independent monetary policy committee had been too hawkish in bumping up base rates in 2011-2012, jacking them up by 125 basis points from January 2011 to May 2012 (high water mark: 4.75%). By how much a more dove-like approach to monetary policy might have boosted GDP growth is a moot point - BUT THE IMPORTANT THING IS THAT POLAND HAS AN INDEPENDENT CENTRAL BANK - unlike Hungary.

The economic situation is not comfortable. The current government has squandered many chances to use its popular mandate to make necessary reforms to the way the Polish state and administration functions. From poor infrastructure (despite last year's frantic pre-Euro dash) to inefficient government offices, things could have been done better.

But I doubt if PiS in power would have seen things through any better. The friends of the Big State, rozdawnictwo (redistribution) and micro-management of matters economic, PiS in power today would be falling over themselves to blame the global economic crisis for people's woes, much as their ideological brethren in Budapest are doing.

This time last year:
The British electrical plug and socket reigns supreme

This time two years ago:
Easter, and the end of Lent

This time three years ago:
That Icelandic volcano (anyone remember what it was called?)

This time four years ago:
Views of Historic Toruń

This time five years ago:
One swallow does not a summer make