Galerianki, sponsorówki

The non-Polish readers are likely to find the title of the post confusing, since both words used there are neologisms in Polish. The former is a combination of the word galeria [handlowa] and the –anka suffix. Galeria handlowa translates into English as “a shopping mall”, whereas –anka in the old-fashioned Polish was added into girl’s surname to emphasise she is still a maid. Hence, after the short processing, galerianka is “a [female] child of shopping malls”, or as the up-to-date net dictionaries offer “a mall girl”.

The phenomenon itself is not new, but it was x-rayed and highlighted anew in the film “Galerianki”, by Katarzyna Rosłaniec, released and generously awarded this year. Some critics have torn the film to pieces, as it’s not a work of art actually, but in this particular case the message is more important than a form. The debuting director gives her audience an insight into the world of teenage (aged approximately 13 – 16) girls who hang around the shopping malls, looking for men, who’d buy them new stuff in return for… sex.

“It’s all because of poverty”, I heard from my friend, who also had watched the film. The characters of the film don’t come from really poor families, their households are far from affluence, but their families make ends meet. The heart of the problem lies in and outside their homes. They grow up in broken families, where the relationships between family members are very poor, everyone pursues their own interests, nobody cares much about the children, who are left alone with their mounting problems. The second factor is the rampant consumerism – teenage prostitutes fall victim to the vision of the world, where the social position is determined by the clothes you wear, handset you call from and a car of your boyfriend. Pathological is such order and the film implicitly points it up. The “veteran” mall girls are ugly, clothes their sponsors buy them are more than kitschy, their white boots and belts stand for the type of fashion typical for a disco-polo tańcbuda somewhere beyond Białystok. Their sleazy beauty, revolting outfits, greyness of their real world (from what I’ve read on forums the depiction of a middle school is very accurate – much has changed since 2003!), contrasted with the riot of colours glittering from the displays in the shopping malls. The film would have lost its educational value, if it hadn’t had a tragic ending. The failure of love is not unexpected in this, no longer innocent, yet devoid of inhibitions, world.

A sponsorówka = a girl who has a (steady) sponsor, is a few years older than a Galerianka (the age usually ranges from 19 to 25), who hails from a provincial town or rural area and has come to a big city to study. Soon it turns out costs of living are prohibitive or she aspires to higher standard of living, better clothes, cosmetics. Money doesn’t grow in trees so she’s looking for an asset which could bring some decent revenues and finds… her own body.

Is it another phenomenon? Age and purpose of their prostitution are not the only features that distinguish them from mall girls. They have a steady partner, by and large a well-off, mild-mannered, well-read, businesslike male, who in return for an intimate relation will provide them with an accommodation, pay the university fees, buy books or ask out for a dinner. In typical prostitution, prostitutes have to serve every client, in sponsorship deals, they can pick and choose. A mall girl as a rule takes pride in their attractiveness and resourcefulness that allow her to make profits on her body, a sponsorówka is mature enough to conceal her disgraceful activity. Her family and friends are never meant to find out about what and with whom she does.

Where’s the thin boundary between prostitution and… And what? According to the narrower definition, prostitution is having sex in exchange for money, the wider one covers all acts and practises related to sexual activity for hire. An average Galerianka wouldn’t call herself (in her peculiar language) a slut. Aside from her way of reasoning which implies what she dabbles in reflects upon her resourcefulness, she might claim she doesn’t do it for money.

So what is the prostitution? Any sex acts committed with a view to obtain any material benefit from it, doesn’t matter if it’s cash, flat to live in, new tacky boots, promotion at work or anything else. In the light of the definition above, both galerianki and sponsorówki are prostitutes. If there’s any commonly morally unacceptable practice to be mistaken for prostitution, it can be sleeping around, for pleasure, fun, or any other, non-material reasons. What is noteworthy in this particular respect is that a man, who often changes sexual partners is frequently called “macho” and a promiscuous woman is a “whore” – still I see some room for improvement in equal opportunities.

The quirky student who runs this blog could argue the sociological analysis of the problems discussed is classical, not Keynesian and some of the readers would rack their brains trying to figure out what he has meant. Everyone who puts the problem of prostitution focuses on the prostitutes, but few researchers try to find out more about the men who are their clients. The transaction on this particular market are entered into, because demand meets supply. The main question then boils down to a chicken or egg dilemma. Are the men paying for sex, because there are girls ready to get paid for having sex, or are the girls ready to hire their bodies because they know there are men ready to pay for it? Rare were the studies of psychological profiles of men, who were clients of escort agencies. And the ones who sponsor students? A typical sponsor is a wealthy, married or unmarried (there’s no regularity), well-educated man in his thirties or forties, who can afford to have pleasure of shagging a young piece of arse without obligations. But who are those creatures who prefer mall girls? Has anybody been interested in their mental health? Has it occurred to anyone that they can also pose a social problem?

Christmas songs

May they serve as an antidote to the pulp (Last Christmas, All I want for Christmas, Merry Christmas everyone, and the likes) played by the radio.

I didn’t know how to sort them, so I put them in a chronological order. All three are older than me…

“The power of love” by Frankie goes to Hollywood, 1982. The lyrics have probably little to do with Christmas, but the video does.



“2000 Miles” by The Pretenders, 1983. Once I heard this song played in Poland, it’s actually not very popular beyond the borders of United Kingdom. If you know what 2000 miles stand for and who’ll be back in Christmas time, you’re on a home straight. The official video, removed like many other clips from YouTube, can be found here.



“Do they know it’s Christmas” by Band Aid, 1984. The only really popular, but with a ear-catching beat and recorded in the good, hardly ever sung by drunk women.



Dear readers,

May your days be merry and bright
And may all your Christmases be white!

Durability

I have to apologise to everyone, whom I misled by writing on Polandian that my Christmas lights were produced in 1972. I don’t know why that date has lingered in my memory and I was truly surprised to turn up there were manufactured in March 1977 by Spółdzielnia inwalidów w Szczecinie (EN: The disabled cooperative in Szczecin). My grandparents bought them the same year to decorate their first man-made Christmas tree, then it was passed on to my parents and since I could remember, they have always lit our Christmas tree, this will be their 33rd Christmas.

All goods manufactured in socialist Poland are now thought to be tawdry, but from my experience the issue seems to be a bit more complicated. In fact, they weren’t technologically advanced, tended to break down often (not as a rule) and had a very poor design (overwhelming austerity). Some of them in terms of durability still surpass their equivalents currently available.


These days if you buy Christmas lights you surely don’t wonder if they will serve you for over thirty years. Neither did my grandparents, but they lived in a system of unchanging shortage of goods. In the insufficient socialist economy it just sometimes paid off to stall a customer with a product so that they didn’t hassle the ailing manufacturer for the next one. In the affluence of the market economy the producers want the customers to come back for more soon, what in turn has a bearing on the durability. When my grandparents bought those lights, they were hard-gained, today we simply go to the shop and buy whatever we want. More and more often what we purchase is a shoddy Chinese knockdown, which usually lacks durability. Whenever your stuff conks out, you replace it with a new one and thus produce waste. Do you think when one bulb in the string of Chinese lights burns out you can replace it and use the lights on? Of course not, when the weakest link breaks you can only discard the whole chain. In my set of 1977 lights I still have four spare bulbs, so if even one of the bulbs burns out, they only trouble is to find the blown out one and change it. Facing such a challenge, many people give in and buy new lights, cause they’re too lazy to do the arduous job.

In this maze of manufacturers’ policies, consumer is faced with many difficult choices and many unknowns. Let’s consider a purchase of a pair of shoes and assume we know that pair A, which costs 50 zlotys, will be worn out after a year and pair B, for which we’d have to pay 200 zlotys will be worn out after five years. Consumer beware! Which pair is more expensive? At first glance pair B, but when we work out the ‘annual walking cost’, we’ll get for pair A: AWC=50/1=50, and for pair B: 200/5=40. So the yearly cost of wearing the ‘B shoes’ is lower, so it’s cost-effective to buy the more expensive pair of shoes. But what if you the price of ‘A shoes’ is reduced to 40 zlotys? Here I see two approaches. Firstly it depends on your preferences: some people like to change their stuff often, some get attached to their belongings, secondly there’s the transaction cost aspect – to get to the shop and buy shoes you have to spend your precious time, pay for fare or fuel to your car, etc. In the light of the second approach, it is advisable to buy the more durable shoes.

In the real life it’s not that easy. We are unable to predict the durability of the things we buy. Once my father bought a pair of shoes for fifteen zlotys in Auchan supermarket and he used them on a daily basis for five years until they fell apart. Another time he bought a pair of socks, also for fifteen zlotys and they shrank by half in the first washing (in the temperature of forty degrees). One of the hints we are offered are the brands. To some extent they reflect the quality, but bear in mind that a part of the price we pay has to offset marketing costs, exclusive interior of the outlet, our prestige from having a brand-name item is also included in price. Personally, I find the quality of the product I buy more important than a label and I am ready to pay more for the reliability and durability, but not necessarily for the brand.

Manufacturers themselves are not sinless. In September my Epson printer blocked itself out of the blue. Its lights began to flash and it informed about an unknown error. I switched the device off and on and it sent me a message, which read: “Some of the parts inside the printer have used up. For further information please contact Epson service centre.” How funny, all of the sudden the damned machine refuses to work and so what to do then? I copied the message which had popped up and pasted it into google. After less than a minute the problem cleared up. As it transpired, Epson printers are designed to block itself after their page count reaches a certain value (14370 printed pages for my Stylus C62). A hapless user of such a printer has basically two options to choose from. Either to go to the service centre and fork out about 100 zlotys for unlocking their printer, or to dispose of the still good printer, buy a new one (here there’s a risk that the customer may turn to another supplier) and produce a few kilograms of electronic waste which still could be in use. A quick look on the forums unveiled a third option and I went for it. I downloaded (don’t ask if legally) a service application and unlocked the printer on my own. I still use it, page count exceed 15000 (though the counter in the service application shows only 700), it will be replaced soon by an all-in-one (PL: urządzenie wielofunkcyjne), but both printer and scanner will be sold for a song via allegro to the people for whom they may come in useful. The Epson’s policy is profitable for the company, but from my customer’s point of view urging a customer to replace a device in full working order is nothing but wheedling out money. And the durability of their devices is a divisive issue. Are 15000 pages a lot? For someone who prints ten or twenty pages per month it would take years to reach such page count, but an ink-jet printer used in a small office could stop working after less than a year. Is a warranty effective then?

I’d be ready to pay more for a more durable and reliable device, but my propensity is constrained by technical progress. The new all-in-one will offer me better quality of printouts, higher speed of printing, higher scanning resolution, more ink-efficient cartridges and some other useful functions. This justifies replacement, when you need an enhanced device. But fortunately Christmas lights do not turn obsolete and probably my kit from PRL-era will have served me for at least fifty years.

Four down, one to go...

It’s the right time to give off some optimism and there’s a concrete reason behind it. The term of current president of Poland will end exactly in a year. And like many Poles I believe this is bound to happen, especially after Janusz Palikot has filled me with confidence, saying that “voters have their heads screwed in”.

Meanwhile Mr Kaczyński is encountering the interminable problem of friends, or rather lack of any. Nobody knows why, but all prominent economists in this country steer clear of the presidential palace and the head of state himself. But those are not the experts who are reluctant to advise the president, that is Lech Kaczyński, who is biased against them and unwilling to take them on. For the first time this became a burning issue, when the president had to appoint a central bank governor. After a long-lasting anguish be finally selected Sławomir Skrzypek (sorry, but this guy doesn’t even have his entry in English wiki!), whose qualifications for this position have been… Well there could have been some other eligible candidates…

The history has repeated itself recently. This time the president had to point three (out of nine, the remaining six are appointed by the houses of Polish parliament) members of the Monetary Policy Council and he was in a fix… Eventually he selected:

Zyta Gilowska, until 2005 a member of Civic Platform, then joined Law and Justice and took office of finance minister in the cabinets of Kazimierz Marcinkiewicz and Jarosław Kaczyński. By running a pro-cyclical fiscal policy (just recall cutting the social benefit premium in 2007), she greatly contributed to the current public finance deficit. Her motto: “It’s running well, so let’s add fuel to the fire.” Views on monetary policy: unknown, but inferring from her past moves, I suppose she’s likely to put forward cuts of interest rates to stimulate the booming economy.

Wojciech Roszkowski, politician, member of Law and Justice, currently deputy to the European Parliament, a graduate of Warsaw School of Planning and Statistics, specialises in economic history. (Any) knowledge or views on monetary policy: kept in the dark

Adam Glapiński (this chap’s biography doesn’t occupy space on English wikipedia servers as well), a dedicated friend of the president and one of his economic advisors. His field of studies in the history of economic thought, in which he lectures at my school. His rousing lectures are tinged with digressions on the current economic order of my beautiful country. The most often repeated waspish remark is that the independent Poland after 1989 is just a “PRL in disguise”.

The new makeup of MPC is… Hard to pick a right word… Crippled?

Three years left?

If you believe in the Mayan prophecy of the imminent end of the world, you’ll probably nod. The 2012 fad is visible all over the world, if you tap “2012” into your google, the results are likely to be divided into three groups: Euro 2012 (the imminent organisational disaster is within the realms of possibility), London 2012 and Doomsday 2012. The one projected to occur in three years is the last we will survive, unless some new manuscripts are found.

Do I believe in this funny theory? No, though there was a time when I was fascinated with it. Is there any reason why? In my humble opinion the end of the world will strike humanity out of the blue. Too much has been spoken about, too many people know about, mostly after the film “Doomsday 2012” was released.

For no apparent reason if people live in affluence the like to devise new problems. Such is the case with year 2012. There’s no other need to worry, so let’s instigate fear of end of the world. Some, like Patrick Geryl try to capitalise on the fear. The main author of doomsday theory is now organising a group of people who will survive the disaster and restore the human kind on Earth. This for me looks like a big scam. This guy might take away the money from those people who trust him and enslave them or set up a sect or something…

Absolutely normal winter

Only the media and other sensation-hunters try to make a mountain out of a small hill. The temperature of minus fourteen degrees in December is more or less as normal as plus thirty in June. How have I calculated it? It’s simple. Mean December temperature in Warsaw is around -0,5C, mean June temperature is something like, +16,5C. Moreover the day-to-night ratio is roughly 2 in June and roughly 0,5 in December. This is important because it shows the time when the earth absorbs and gives off heat. That is why I compare the night-time lows in December and daytime highs in June. Add and or subtract 13,5 degrees and you’ll get respectively thirty or minus fourteen. My reasoning and calculations are a bit approximate as monthly amplitudes of extreme temperatures are bigger in the winter, but daily ones in the summer.

Nevertheless, media spread panic, when nothing unusual has happened and the audience have followed up with the winter madness. Yesterday in Warsaw I passed a group of teenage girls who claimed they didn’t remember such frosty winter. For those who have a short memory I prepared a quick reminder. The last days haven’t been the coldest this year, the temperature in Warsaw dropped to minus twenty two degrees on 6 January 2009 (seven Celsius degrees colder than these days), those girls should also remember 23 January 2006, when the temperature in the capital of Poland went down to minus thirty degrees. The different story is that the few past December accustomed us to the mild weather. The last cold December was in 2002 and the weather was very similar to the current one. The grumblers should blame themselves. There’s no other solution for freezing cold than to wrap up. Most of those elegant shoes or fashionable thin overcoats are not suitable for temperature of minus fifteen and heavy snow.

The media coverage snowed us with the reports of heavy winter attack. In simple words winter did polish off Warsaw on Thursday. I left home at 6:25 in the morning to get to school before 8:00 and I managed. Ul. Puławska was covered with typical slush (thanks for Micheal Dembinski for giving an idea on how to translate Polish word breja, it seems to be quite suitable, as the snow poured with salt or grit begins to melt), but cars were moving forward smoothly and so the bus did. It would have been amazing if the heating hadn’t broken down so students were freezing in the lecture rooms, but in general it was a good day because I won lots of gadgets in E&Y contest. I left school at 15:00 and a quarter later I stood in the middle of the crowd on Wilanowska bus terminus. As it turned out later, buses didn’t come, because had got stuck on the jammed Puławska. The first old Ikarus arrived from Woronicza depot. The ride home took only thirty five minutes (surprisingly short). From what I’ve seen or heard traffic in Warsaw was snarled up everywhere from dawn to the late evening.

On Friday the situation got better after the snow had ceased to fall. In the morning Puławska in Piaseczno was still covered with after-snow mud, but Warsaw managed to clear its street during the night. Warsaw managed clear its roads and the border of the capital, normally invisible was clearly marked by the dirty roads. Below Al. Niepodległości next to the post office where I popped in to send the next item from my allegro sale.


And a pavement along the street, still under the snow and slippery is an exception. All arteries and byways in Warsaw were black.


Nowa Iwiczna seems to prove to be an uncivilised suburb compared to Warsaw. Below my street around midday and then at dusk. Mixture of grit and snow lingers.



I took a few other snaps, however the camera was a bit reluctant to work in the cold and dark and in spite of my attempt to take sharp photos, it didn’t work out. Finally it told me about the shutter error and switched off. After removing memory card and batteries and overnight “drying” it ran fine today.

I decided to make extensive use of the Saturday afternoon and stroll through Nowa Iwiczna and Stara Iwiczna and carry out a road clearance inspection.

Below: the main street of Nowa Iwiczna (ul. Krasickiego), covered with a driven mud


The main street of Stara Iwiczna (ul. Słoneczna) doesn’t look much better


The layer of slush on my street remains intact.


And the coal train siding. Looks in use, but unfortunately I didn’t spot any train, even though the odds were higher (the lower the temperature is, the more trains have to carry coal to the power plant)


Despite the cold, media hogwash and commuting horror I try to look at the bright side of winter. Yesterday, after skies cleared up in the morning, the snow-capped landscape lit by the sun looked wonderfully.

Below: a view towards Puławska,


Pine trees swathed in the snow, as seen from the ground floor bathroom window,


A view from my room – back of the garden and neighbours’ plots


And a frozen pond in Mysiadło (don’t worry if you can’t see any pond…)


I’m identifying another problem – we haven’t had white Christmas in Warsaw since 2002 and your hopes for it may be dashed. We’re going to have a typical “Christmas thaw” this year, so I decided to secure white Christmas in advance and hoarded some snow in the garden (below).


The bigger snowdrift is rather unlikely to melt quickly.

Meanwhile the global leaders who gathered in Copenhagen had to endure the cold spell. The climate summit is perceived to be a failure, but I’m one of those who are pleased with such an outcome. The global warming is a fact. Whenever a frost wave, like the current one comes, I can read posts on weather forums like “and now try to tell me there’s a global warming”. Temperatures are rising in general, but it doesn’t mean we aren’t going to have extremely cold temperatures. But the link between mankind’s activity and warming is not confirmed. I believe it is more a natural phenomenon and our contribution to it is tiny. It used to be warmer on Earth. Why is Greenland called Greenland? Maybe because when it was discovered it was green, only later, when the climate cooled, it got iced. We should cut down on the carbon dioxide emission, but to reduce air pollution, to save forests which produce oxygen, to waste less and produce less waste. Global warming is a political issue, which involves colossal sums of money – and because big money is at stake, there will be no honest discussion on it.

Footloose

LipDUB from SGH

Uplifting, devastating

Today I’ll let you take in a blend of praising, grumbling and dissomething.

I was delighted to read the report published on Wyborcza.biz, in which Maciej Samsik, journalist of Wyborcza’s business column, x-rays commercials, mostly those of banks, shark loans, financial advisors and telecom operators. Such actions are essential in the education and in the civic society, cause people should be aware of the pitfalls of advertised “bargains” and all “catches” in the suspiciously beneficial contracts. I hold it dear and would love to see more such analyses.

The opposite feelings in me were evoked by the real estate guide by TVN Warszawa. Their report on residential area of Nowa Iwiczna is full of factual errors and misrepresentations. Many of the shots in the footage do not actually show Nowa Iwiczna, bus service 739 does not run through Nowa Iwiczna, its nearest stop is half a mile away from the boundary of the village and distance from the nearest public facilities are much higher than given in the video. And the language, both the voice of the lector and the very content of the report are stilted. Dabbling in translating has sensitised to me that ugly style of Polish – clumsy syntax, bombastic, but trite collocations and illogical sentences are asking for being polished up. I got worked up and posted a comment on journalists’ dependability and erudition.

Ludność wzrosła poprzez budowę nowych osiedli i chęć mieszkania na obrzeżach Warszawy.

This is the most appalling example. In English, a population can rise, but in Polish we use “liczba ludności” and in the context of a small village, it is better to use “liczba mieszkańców”. The corrected sentence will read: Liczba mieszkańców wzrosła na skutek budowy nowych osiedli i mody na mieszkanie na obrzeżach Warszawy.

The poorly written texts lie the core of translators’ ordeal. If the source writing is crappy, the target one is more likely to sound badly. Unless a translator cares and does the editing job. This sentence might also illustrate what many translators grapple with, when they are translating from Polish into English. Polish language gives its user a large dose of freedom when it comes to syntax, German has very strict rules, English lies in the middle, but somewhat closer to German. The fact that it has a correct syntax and lots of constructions is used stylistic devises is often omitted in the teaching process, just like another issue of “natural flow”. The basic problem of the sentence I’m taking into pieces is posed by illogical links. It sounds very dubiously that the rising population is the effect of the new development. Those building were put up because there had been the demand on houses or flats in NI.

A Pole could translate the original sentence without taking any pains to produce anything up-to-standard:

The population grew through the construction of new estates and the willingness to live in the suburbs of Warsaw.

It would be also possible to translate the sentence edited by the author of this blog:

The number of residents rose, as a result of the construction of new estates and the fashion for living in the suburbs of Warsaw.

This also sound poorly, “of” appears three times in one sentence and it surely lacks natural flow, not to mention the syntactic trap.

I came up with two, rather decent translations.

1) Newly built estates and the trend to settle down in the city outskirts have brought about a rise in the number of residents.

2) Springing up development and the suburb-living fad have led to a rise in the number of residents.

It took me around a quarter to get to grips with one sentence, still the biggest flaw is the link between newly built estates and the number of residents. Some elements of those two sentences may be combined to reach a better outcome. If you have any suggestions on how to improve this translation, I will welcome your advice. But fifteen minutes? I think I wouldn’t make a living on translation working in such sluggish pace.

And why the hell haven’t the mentioned clogged up Puławska and commuting nightmare that has become a part of living here?!

The Wednesday afternoon brought the news that Ben Bernanke, the governor of Fed had been awarded the prestigious Time’s Man of the Year title. He is credited with averting a total collapse of financial markets, but the prize reflects only on his past accomplishments and leaves out the ramifications of the current US central bank policy. Economy will sooner or later bear the brunt of excessively low interest rates and quantitative easing. Those who benefit from such policy are the government, which finances and will pay its debts cheaper and financial industry, which uses cheap money to speculate. The ordinary people will sooner or later damn him, like they did with Alan Greenspan (look at the amount of criticism towards him in his wikipedia biography note), if not for the next crisis, then for the inflation tax they will have to pay.

The evil of keeping the interest rates low

Just as it has been done for the past year…

Easy come, easy go. Our approach to many things depends on the price we had, have, or will have to pay for them. Human life is (considered) priceless, but the respect to material goods is highly correlated with their value. If we buy a brand new car, we polish it every weekend and park it very carefully so that we don’t scratch it. If you are an owner of a new car, this scratch probably breaks your heart, buy if what you possess is a clapped-out banger, you usually don’t care. This does not apply to everyone, may the author of this blog serve as an example.

The respect for items is in my theory conditioned on the replacement costs, including transaction costs, in more simple words, the crucial criteria are price and availability or effort that has to be made to procure a certain good.

The natural economy is the thing of the past. In the contemporary world, money is used to value goods, fix prices and serves as a legal tender. But in the light of my theory, can you figure out, what the respect for money is contingent on? The most common perception, often instilled in children during the upbringing process is that the more people respect money, the harder they had to work to earn it. In terms of life this can be seen as golden rule, especially when we see the guys (called “politicians”), whose livelihood is spending someone else’s money. In economics, things tangle up a bit, but the phenomenon of ‘price approach’ remains applicable.

Can money have its price? How is this price fixed? In the market economy, price is usually driven by the market forces, so when the supply and demand meet, a certain amount (quantity) of a certain good is sold at a certain price. But hang on! Two questions slip into our reasoning. Firstly, how can the money be valued, is a 100 zł note worth more or less than 100 zł, or maybe as much as the paper it is printed on? And secondly, how do supply and demand on money can look?

The first questions is followed by two answers. The first is based on the existence of exchange rates – money as a currency of one country can be valued in another currency, but that’s not what I’m going to deal with today. In the second and final answer, we assume the money is a specific good, which can be neither sold nor bought, but can be lent and borrowed. Hence, the price of money is the interest rate.

And the “supply and demand” matter. Every student who has completed the basic course of macroeconomics should know the supply of money is controlled by the central bank, which runs monetary policy, either directly, by setting money supply, or indirectly, by setting interest rates. A demand on money is in turn generated by private persons, legal entities and governments and is basically conditioned on its price. So when the cost of money is brought down, demand on it automatically rises. So I’m responsible only for the demand… I cannot just print money at home, go to the shops and use the notes as a legal tender – this is a crime. Central banks, as the current practises of Federal Reserve or Bank of England show, can print as much money as they want and it is not a crime – how funny!

Look at the history: low interest rates in Japan fuelled stock bubble, which later on caused a financial meltdown and the decade of stagnation. Why had it happened? People ahd borrowed money cheaply and invested it in shares, as long as their valuations were on the rise they borrowed even more, hoping the trend would continue. But the moment when the growth potential reached its limits has come, and those people and businesses that had their money in stocks were left with little capital and debts they had to pay off. So instead of spending money on consumption, they had to return it to their creditors, who also had lost as a result of numerous write-offs.

At the beginning of twenty-first century, Alan Greenspan as a Fed governor hit upon a mould-breaking idea that every American should afford to buy a house (as Mr Greenspan declares on pages 229 and 230 in his book “Age of Turbulence”, I quote the original edition), no matter how poor they were (the second part of the sentence is where the author calls a spade a spade). To that end (and some others actually), Fed shaved federal funds rate to only one per cent and kept it down for a few years, until 2006. Availability of cheap subprime mortgages combined with low interest rates, high gains on property and stock markets and new inventions of financial engineering whetted the appetite for risk and blew up sizeable bubbles. When they burst it was too late. In his book, released in 2007, Mr Greenspan admits he had seen the bubble rising, however he claims an average family could move to a posh house and improve their standard of living thanks to his policy. Many of those families found their houses foreclosed, when the rising inflation made Fed jack up the interest rates and adjustable-rate mortgage repayments became they burdens many households could not carry.

A year ago, in an unprecedented move, Fed once again slashed the interest rates almost to zero. The action was intended to ease the pain of financial markets and to boost customers’ confidence. The latter was somehow propped up, but rather by expansionary fiscal policy, not by better access to consumer loans. American customers after they had been taught a hard-knock lesson are still reluctant to spend and borrow. The distressed markets, in particular banks gave a warm welcome to the liquidity injection the were granted. In a short term this move prevented a knock-on effect and ultimate collapse of financial system. After a few months it turned out that big investment banks used the cheap cash for aggressive speculation on stock, gold, crude oil, or copper markets. At the end of the year their balance sheets grow robust and bankers once again grant themselves generous bonuses. The real economy, though in recovery, still does not keep up with the markets.

Interest rates are going to remain low, so the ecstasy on financial markets will continue. Then the inflation will drive the rates higher and the next bubble will be punctured. Why is it so likely to happen? It is in the interest of US government to see the higher inflation which would decrease the real amount of its debt…

Hey, how about Poland? Unlike United States and most of EU countries Poland has not been troubled by deflation and therefore had to keep its interest rates higher in nominal terms. But in real terms our benchmark rate fluctuates around zero (the rate is currently 3,50%, whereas inflation in the recent months has been between 3% and 4%, but beware, this calculation, though commonly used is flawed, because the interest rate refers to the future period and inflation to the past).

Whenever somebody speaks about the factors that have contributed to positive economic growth in Poland, they accentuate two of them: consumer confidence and depreciation of złoty. I cannot deny their role, but hardly anyone mentions the monetary policy run during the boom. Unlike the Baltic States, Poland has not fallen into the indebtness trap. The burden of debts has not clamp down on our development, which, a bit stifled in the years of boom, now turns out to be sustainable. We owe our success not to government of Law Justice, nor to the current cabinet of Donald Tusk, but to the restrictions on denominated loans and other, imposed by our financial supervisory body and to higher than postulated by some “illiterate economists” interest rates, which tightened the credit criteria and prevented the growth of domestic subprime loan market.

To sum up, I see four main reasons, why the interest rates should be kept relatively high.

1) The influence of consumer stances. When the loans are more available (more people can afford them when they have pay not much more than they had borrowed), consumers tend to spend more and more recklessly and find it harder to estimate, what they can afford. Meanwhile their propensity to save declines, because depositors are given lower interest rates in the banks.

2) Flawed investment projects. When the interest rate is low, more business venture become viable, because for a lower interest rate on the borrowed capital, the net present value of the project is more likely to be above zero. Those enterprises turn out to be very vulnerable to any external factors that can hamper their business.

3) Inflation. Dariusz Filar, currently the member of the Monetary Policy Council has put forward a rule that the benchmark rate should be set around two percentage points above the inflation rate. In the present circumstances it should be raised to 5,25% and nobody would agree on it, but in the long term I see it as a sound principle of money value protection. Once the inflation spirals out of control it is hard to pull it down, the effects of the therapy are severe and those who lose the most are usually the poorest.

4) Risk management. When a year ago I paid almost all my savings into a 12M deposit I was bid a decent interest rate of 8,5 per cent and it did not occur to me to seek any other investments when I was given a fixed-income deposit with honest interest. But if I had been given the interest rate of 1,25 per cent on the same deposit, would I have been so eager to leave my money in the safe haven? Probably not, because the secure profits would be tiny and I would be more keen to invest that money in a risky securities. That it what has happened this year – being faced with low interest rates big market players took the chance and earned ten times more than the author of this blog!

Nightmare of the past – episode 28

We have plenty of phrases to describe what happened twenty eight years ago: Wojna Polsko – Jaruzelska (Polish vs. Jaruzelski war), Dzień, w którym Jaruzelski wypowiedział wojnę Polakom (The day Jaruzelski declared war to Poles), or maybe simply Stan wojenny (Martial Law).

Each year, around 13 December the topic of martial law is revived, victims are commemorated, opponents stage demonstrations in front of general’s house in Warsaw. Each year historians, journalists and ordinary people ask if it really had to happen.

My take on this is that we will never find out the truth on the backstage of the martial law. Probably Polish society will be divided in its views on martial law.
Those who claim it could have been prevented point out that Jaruzelski and his henchmen (the biggest part was played by Czesław Kiszczak) were preparing their crackdown on Solidarity since August 1980 and the risk of Soviet intervention in late 1981 was diminutive. They also argue the CPSU leaders were reluctant to offer military help to Poland, as the Soviet economy was on its knees, war in Afghanistan stirred up more troubles than expected and they were afraid of the reactions on the international political arena.
The supporters of the imposition of martial law remind that Brezhnev doctrine was still in force and the threat of Soviet invasion was real. Moreover, they say solving the problem with our own hands was lesser of two evils and if Warsaw Pact armies had trespassed onto the territory of Poland, death toll would have been much higher.

This year, the Institute of National Remembrance published in its bulletin the alleged evidence that general Jaruzelski had been asking or even insisting on [military] help from the Soviets (the article is available only in Polish, the quality of English-language releases from IPN leaves a lot to be desired). I took the trouble to read the short paper, which consists of introduction and the record of conversation between Jaruzelski and Soviet general Kulikov, which took place four days before martial law was declared. In the introduction professor Dudek from IPN asserts Wojciech Jaruzelski declared martial law in spite of Soviets’ refusal to cross the borders of Poland. Meanwhile in the document Mr Kulikov mentions the operation “Shield-81” (a plan of Warsaw Pact military intervention in Poland, known also as ZAPAD-81), though he hopes Polish army will put down the counterrevolution.

Documents, though patchy and from dodgy source (I would like to point up that for no apparent reason documents drawn up by Russians and Secret Service Officers are the most reliable source of information for IPN. For sure Russians, who have always hated Poland and wanted my country to be subjugated to theirs, had always clear intentions and Esbecja officers were morally impeccable and always told and wrote the truth!) show Jaruzelski’s determination to clamp down on Solidarity movement and his fear that Polish army forces would not be up to the task of restoring the law and order of socialism. Historians argue Jaruzelski can be accused of treason on the basis of those documents, the general asserts the notes had been fabricated, former president and former PZPR member Aleksander Kwaśniewski says what Jaruzelski did was a well-thought-out stratagem aimed to outwit comrades from USRR. This is a step too far, but I have another supposition. Jaruzelski tried to sound Soviet military leaders out. Bearing in mind his war experiences and the fact he had been in charge of Polish military units which had taken part in the military operation in Czechoslovakia in 1968, I conclude he must have been afraid of the implications of military support from allies.

In 1981 Jaruzelski found himself between the devil (opposition in Poland) and the deep blue sea (Soviet comrades). The choice he made is controversial but cannot be judged easily – he might have tried to save the domination of communist party in Poland (what he actually succeeded in), it have might have been an adroit coup d’etat, or it could have been the measure taken to prevent a bigger tragedy – the words from general’s speech sound still enigmatic to me.

I was born six years after the incidents I describe had taken place, so I cannot remember those events, that is why apart from reading and listening to the accounts of martial law I am provided by the media, I asked my parents and grandparents how they had felt before and after 13 December. Like millions of Poles, neither affiliated with the party, nor keen to join the opposition, the feared the Russian invasion. No wonder, they had heard about what had happened in Hungary in 1956, remembered well disgraceful operation in Czechoslovakia in 1968 and knew that our potential to put up resistance against Warsaw Pact forces would be much stronger than in the other countries of Soviet Bloc. Even in the Polish army anti-soviet moods prevailed. Those who served there only in the minority were the ones who had voluntarily reported, on account of their desire to defend the socialist homeland, most of the soldiers were called up and if the push had come to the shove they would have started a rebellion.

But the fear of Russian intervention was not the worst. What really filled them with dread was the possibility of CIVIL WAR. Almost nobody mentions that aspect today, everybody focuses on military problems. According to their descriptions of those days, never, after WW2 had the Polish society been so divided as then. The majority backed Solidarity, this part of the nation was numerous and well-organised, the minority followed the line of the party. There were the splinter groups stemming from the Solidarity, whose members wanted to solve the problem of communist power in a very radical way. The chant:

A na drzewach zamiast liści,
wisieć będą komuniści.

(On the trees, instead of leaves,
those to hang will be communists.)

best summarised their intentions of overthrowing the system. On the other side Polish army would not hesitate to put down the counterrevolution. After twenty eight years it is still beyond my comprehension that Poles wanted to kill one another. According to what I have heard directly from many people, Poland was on the verge of fratricidal carnage and it, in their view, justified the martial law. I deeply condemn both parties that stood on the opposite sides of the barricade. Radical anti-communists’ ideas were based on primeval, though kind of natural instincts of getting their own back on their oppressors – but slaughter is not a civilised way of handling conflicts (look at the example of Romania – it probably must have happened, but their tyrant had been much more cruel than our leaders, but is there anything to be proud of?). And the determination of party or military authorities to hold on to their privileges under the system was reprehensible as well…

As an economist I cannot leave out another facet of the problem, also omitted by historians. Those from IPN claim Jaruzelski intimidated Poles with a “vision of cold and hunger”. Indeed in 1981 Polish economy was in the state of collapse, firstly because of all the flaws of socialist concept of extensive development had already come to the light, secondly because it had been paralysed by ongoing strikes. All the current economic liberals would bridle at the economic postulates of Solidarity, which boiled down to a few demands: work less, earn more and maintain the social security offered by the socialism. Their approach in the tough political and economic circumstances is still hard to assess. Soviet Union was unwilling to offer us military help, but cutting off economic aid would cost them much less…

The defenders of general Jaruzelski say martial law paved the way to democratisation and round table sessions, his adversaries state it suppressed our aspirations for independence. My opinion is somewhere in the middle. Before Gorbachev came to power in 1985 chances to secede from the Warsaw Pact and Socialist Bloc without running the risk of military intervention and economic breakdown were tiny. What paved the way for round table session were perestroika in USSR and economic decay of socialism. When the system was at the end of its tether, leaders of People’s Poland decided to share the responsibility for the country with the opposition, at least this is how I see it.

The further we go from the socialism, the more myths arouse. The social support for Jaruzelski’s decision is gradually falling and what is characteristic is that the older the surveyed are, the bigger the per cent of general’s supporters is. The older remember those days better and are more aware of historical situation, the younger, who were either too young to understand what had happened or so young that they were born after 1981, tend to be regard the martial law as a crime. I wonder to what extent the older have been manipulated by the communist propaganda and how the younger are manipulated by the one-sided picture created by Institute of National Remembrance, which has a monopoly for dealing with the modern history of Poland.

History is a part of our identity. I find it highly alarming when the young people asked by a TV journalist on street about the martial law declare they know very little about it. The remembrance of those events and victims of those days should be nurtured. But the whole debate over the martial law which is conducted every year does not move Poland forward. Mr Kurtyka will not build motorways, Mr Gontarczyk (Polish chief expert in decrying former presidents) will not solve the problems of higher education system, Mr Dudek will not simplify Polish tax code. But their merits in undermining the social trust and spreading hatred are indisputable. I partly blame them, whenever I see the youngsters, born like me in the late eighties, who chant the song bringing on hanging communist on the trees. They, who have never been persecuted, imprisoned for their political views, beaten by the milicja during the street demonstration, those who have never experienced shortfall of goods or lack of future prospects find it very easy to air their views in a free and independent country. In my perception, they are eaten up with hatred. History may judge Jaruzelski, but have the youngsters right to do that?

I can only recommend the English website prepared by the IPN. Unbiased and with decent content, but as usually done by amateurs – for sure they have not consulted any native English speaker before publishing it – the mistakes are typical for inexperienced translators (I know something about it from my own experience and mistakes I used to make and sometimes still make – see the problems they have had with word order for instance).

I appreciate it, if some of you shared your recollections of 13 December 1981. What were you doing? What did you feel? And please don’t write: “I hate that guy, he took away my Teleranek”.