Once again our own Dr. Robert Genetski has the honor of being nominated for an award as one of the top speakers in the fields of Economics & Finance. To receive the honor we would like your help. Please take a minute and go to http://www.speaking.com/top5 scroll down to the Economics/Finance area, vote for me, scroll down to the end of the page and fill in your name, email and click submit. Thanks in advance.
Leszek Balcerowizc is not as well known as Michael Jordan, or even Yogi Berra. But his impact is lasting longer than either sports legends. Balcerowizc is the financial MVP of the healthy Polish economy and other EU economies that followed his financial style.
When Poland was freed from the financial and political collapse of the Soviet Union, it was Balcerowicz that instituted tough policies that brought about a rapid financial recovery. It was his policies that enabled Poland to avoid the financial bubbles that hit some countries in the 1990s and everyone in the 2000s, but allowed Poland to thrive when other European economies are stagnating.
It also is a contrast between the PIGS (Portugal, Italy, Greece and Spain versus the BELLs (Bulgaria, Estonia, Latvia and Lithuania). The PIGS are struggling with stagnated economies, high unemployment, too much debt and addicted to too much government spending and hyper-high taxes—all of which are smothering growth. The BELLs are the opposite, but had two advantages. First, the BELLs lived under Communist rule and knew from experience that the “nanny” state does not work. Second, even if they would have gone the PIGS’ route, the EU denied them bailout money, so that they had to go it alone. They had to make the tough economic decisions. They underwent short-term economic pain so that they could eventually recover, which they did dramatically.
Under the financial management of Balcerowicz, Poland underwent “shock therapy” to kill hyperinflation. Balcerowizc forced Poland to make a debt effective ceiling part of their new constitution, thereby permanently handcuffing the free spenders. From 2001-2007, Balcerowicz served as central bank governor in Poland and maintained tight fisted fiscal policies that enabled Poland to avoid the financial run up and bubble of 2007 and the recession of 2009.
This same concept enabled Germany to recover 10 years ago from being the “sick man” of Europe to being healthy today and to be the big dissenter in the EU that wants to follow a policy of enlarging government control, like the US is doing.
Right now, Fed Chairman, Ben Bernanke is printing money and spending more than he prints. We must remember that there are historic precedents for great government spending. Think of the Soviet Union, Mao’s China, Cambodia, and ANY state that proclaimed that government knew more than its own people. As for Bernanke and his policies, our opinion: Bernanke is no Balcerowizc.