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Pretending that the crisis is a good thing, that is. Last weekend’s “High Heels” (Gazeta Wyborcza’s ladies’ supplement) has a subhead on page 37 (above an interview with Karolina Korwin-Piotrowska, a teevee journo) that reads “This crisis has its good sides. Perhaps we will start eating bread again and I won’t have to constantly hear ‘hey, let’s go for some sushi’.”

I’ve solved the economic crisis. After months of study and intensive thought I’ve finally cracked it. To be fair, I arrived at my earth-righting conclusion by standing on the shoulders of giants. I’ve been reading the newspapers, turning over in my mind the pronouncements of the experts, sifting through the policy initiatives of the finest political minds on the planet and tallying the melodious discourses of our leaders. The solution is this: we must all buy more cars. That will keep car manufacturers in business, which will keep people in jobs, which will mean they can afford to buy cars. Or wash each other’s linen – whatever.

Here’s a report from the Irish national broadcaster’s news site which may be beyond parody but by jingo that isn’t going to stop me. For those unfamiliar with the subject, two pieces of background information: (1) the Irish economy has hit a brick wall (2) “Tánaiste” is the Irish name for the post of deputy prime minister.

Govt made very good decisions - Tánaiste

(The government is great, says government)

Saturday, 28 March 2009 15:16

Tánaiste Mary Coughlan has said the Government made very good decisions about how to invest our money in recent years.

(Token Fianna Fail woman Mary Coughlan has said she gambled our money wisely in recent years.)

Minister Coughlan defended how the Government handled the economy during an interview with Marian Finucance on RTÉ radio.

(Coughlan was being grilled by Smoky Finucane on the radio when she complimented herself.)

She admitted that there was an over reliance on the construction industry and said the country took its eye off the ball and was over exuberant.

(She admitted being in the pocket of a handful of building barons and blamed everybody else for her carelessness and champagne-tent insouciance)

However she said we did not blow the boom because we paid off our debt, invested in pensions and provided new services.

(However, not all of our short term winnings were wasted: Bobo Justus got his dues without having to work us over with the oranges, the “legitimate” financial industry also got paid and a few people got meals on wheels or new blackboards or what-have-you.)

The Minister for Enterprise Trade and Employment also said competitiveness is hugely important and she is looking at ways we can reduce costs and attract more investment here.

(Coughlan, who is also the minister for outsourcing and laying off people, said that for Irish business to succeed, Irish workers must earn less, and that she is looking at ways of attracting back the mercurial investment capital that has stood us in such good stead in these hard times.)

However she said we are not a low cost economy and that is not necessarily where the Irish people want to be.

(However, she reiterated that workers earn too much and that is not necessarily where capital wants to be.)

Well, perhaps the Times Online misquoted him:

‘Dermot Ahern, the [Irish] Justice Minister, said: “Legislation is in place to bring to justice those who may have played hard and fast with the financial security of this country”.’

There’s nothing wrong with playing hard and fast. What Ahern should have said was “fast and loose” but since the border between legal and illegal banking practice is so thin as to be meaningless – well, it’s a mistake anyone – and certainly a politician – could have made.

The government assigned me to a pension fund (the one that was stung by Bernie Madoff) run by one of the big banks here. In their very first letter to me, an unwilling and forced customer, the managers of my money write: “In the attached prospectus you will find the conditions of your membership.” Oh good. Perhaps if I break their rules they’ll kick me out. From the prospectus I find that I am now an investor in several banks, a television station, a newspaper, a stockbroking firm, a developer and God knows what kind of other shady businesses. Mostly, though, I am an investor in government bonds. So to recap: the state takes money off me and (via an expensive and privately owned firm) lends that money to itself to be repaid to me with interest at some later date. That interest comes from the taxes paid by me. The state could just take the money off me in the form of pension contributions and pay it back to me later but that would cut out the middleman.

When the zloty was strong a lot of people took out mortgages denominated in other currencies, especially the Swiss franc. In a so-broad-as-to-be-meaningless sense any loan is a gamble of course, but this seems to be a double hazard: (1) I will be able to pay off the loan and (2) the zloty will not fall in value against the Swiss franc. Well it did fall and some are now seeing mortgage repayments fifty per cent higher than they bargained on six months ago, and loans worth more than their houses. These people are bad gamblers and so far no one is suggesting that they simply renege on their loans and give the banks the finger.

Of course not: tearing up contracts like that just wouldn’t be cricket. As Blihr points out, one of the state’s main raisons d’etre is to guarantee contracts. But amazingly, Poland’s deputy prime minister is talking about tearing up the contracts signed between businesses and banks regarding foreign currency options. When capitalists, as opposed to would-be home-owners, gamble on a strong zloty things look very different.

What’s fun about the crisis is watching the experts scramble to explain things they obviously don’t understand. The same experts who didn’t see this coming are now spouting off about how long it will last. It’s funny also to see blind faith in the voodoo power of magic words make a comeback. Tusk announced yesterday that if the zloty sinks in value to 20 euro cents Poland will defend it. But it’s not “intervention” and please don’t use that word, he says. After all, the government is not about intervention. Another funny one, which unfortunately I can’t find on the internet editions of Gazeta Wyborcza, was the opinion expressed by some experts that actually intervening in the currency markets would be a bad idea but talking about intervening – that would be fine, just what the zloty needs.

The government is interv– errr, defending the zloty by cashing in all the euros it has from the EU on the money markets rather than in the central bank (if this sounds like gibberish to you perhaps you should consider a career in economics). A good idea, surely? Those euros are worth a lot of zloties these days. But basically this is currency speculation and speculation, we are being told, is the problem causing the zloty’s weakness. It’s good when we do it but bad when others do it.

More entertainment: a mini-Madoff has been found.

How do you present arguments for and against something while making sure it’s plain the reader should be for? One way to do it is to present the arguments against as being, in fact, opinions held by, for example, politicians. This is a method that Dean Baker has drawn attention to on numerous occasions. For example, you write “Democrats argue that X is the case” when it is an incontrovertible and even uncontroversial fact that X is the case. Like magic, X is now no more than a party position, an opinion, an option.

October 28^th’s Gazeta Wyborcza presents arguments for and against the euro in much the same way (although they also resort to using obviously rubbish arguments against). There are ten arguments in favour and seven against. In four of the seven arguments against, the authority referred to is Aleksandra Natalli-Świat, the deputy head of the parliamentary opposition. For example, the second argument against is: “Before we can enter the eurozone we have to meet many requirements, including reducing inflation, which will require higher interest rates, which in turn means slower economic growth – says deputy chief of PiS Aleksandra Natalli-Świat.” As far as I know it is a fact that Poland must reduce inflation to join the eurozone. This is done by raising interest rates, which makes money expensive, which means slower growth. Aleksandra Double-Barrelled Świat has nothing to do with it. Could they not have got an independent economist to verify or disprove this claim? Another argument against the euro is given a big wet French kiss of death by being associated with the League of Polish Families (LPR), which used to run this country and which few if any readers of GW can have even a shred of sympathy for.

Another argument against is discredited by association with the clearly exaggerated fears of another PiS figure, who said that prices in Cyprus had risen by 30% because of sellers rounding up. “Official data do not show such a rise in prices,” the newspaper says. So why mention the 30% at all? In order to be able to say “we looked at the official data” without actually telling readers what that official data said. Did the official data show a 3% rise in prices? A 29.9% rise? Who knows? Not the readers of Gazeta Wyborcza anyway.

There really is no such thing as a cloud without a silver lining. The crisis is now being used as a stick to beat Poles into accepting the euro as their national currency. “Look at Slovakia,” they say. They do not say: Slovakia’s central bank has surrendered its say in how to deal with the unfolding events. Cut interest rates? Raise them? That’s decided by that well known Slovak nationalist, Jean-Claude Trichet. Gazeta Wyborcza, inevitably, is at the forefront of the pro-euro movement. Yesterday they published an interview with one Radosław Bodys of Merrill Lynch headlined “The euro will move us from the Hungarian league to the Slovakian.” Now, I don’t want to be negative and all, but a Merrill Lynch expert? Aren’t they the same experts that, well, you know what banking experts have done to us recently.

Elsewhere, opinion polls show the majority of Icelanders now want in to the EU. The banking experts so comprehensively screwed up their economy that it’s hardly surprising. Maybe Naomi Klein was right.

Polish workers (among others) are required by law to play the stock market with at least part of their pension savings. I hardly need to go into what has happened to the stock markets of late. Gazeta Wyborcza had a cheerful lead story on Thursday: The Shares Slump is Devouring Pensioners (a very free translation of “Bessa zżera emerytom”). It turns out that half of the gains made by the so-called “open pension funds” since they set up shop in 1999 have disappeared in the last few weeks (GW corrected their earlier report that 100% of the gains had been wiped out). It’s a complicated and dull subject – unless you are a woman facing retirement next year. In that case, I would imagine, it is gripping to say the least. By some quirk of sexism, demographics, life expectancy, incompetence and blind adherence to free-marketeering ideology, women (but only old ones) will come off worst, though the situation is not all that bad, as a part of pensions benefits are and will continue to be paid out by the boring old state body, ZUS (also notoriously inefficient, lest I be accused of bias). Still, real people will see real reductions in their real pensions starting in a few months because of the crisis (that’s what they’re calling it here: the crisis. Have another vodka.) GW’s article is accompanied by a commentary from the pen of Dominika Wielowieyska. In a sudden rush of good citizenship I have decided to provide here an interlinear translation into English of the reassuring words of wisdom from the ramparts of Gazeta Wyborcza:

Nasze składki w OFE są po części inwestowane na giełdzie.

Our pitiful savings are gambled on the geegees.

W 2007 r. fundusze chwaliły się, że pomnożyły nam pieniądze o kilkadziesiąt procent.

In 2007 the tipsters boasted that they had made us a tidy cash profit.

Dziś z powodu bessy kilkadziesiąt procent zmalało o połowę!

Now, as a result of a losing streak, I could really use three squares and a cot.

Już w przyszłym roku pierwsze osoby dostaną emeryturę, której część - na razie nikła - pochodzi z OFE.

This is going to be one tough winter.

Ich emerytura będzie o kilkanaście złotych niższa, niż wydawało się kilka miesięcy temu.

Your pension’s going to shrink by 10, maybe 20 zloties a month.

Niby niedużo, ale dla ubogich liczy się każdy grosz.

It’s no big deal but when you’re a deadbeat every penny counts.

A dla nas wszystkich liczy się poczucie emerytalnego bezpieczeństwa - podczas turbulencji bezcenne.
And we all need chumps to keep putting their dole money on horses.

Winne są trzy ostatnie rządy SLD, PiS i PO - ich skandaliczne zaniechanie.

It’s all the fault of the last three hot tips: Hallo Dundee, Fancy Lady and Santa’s Little Helper.

Do tej pory nie ma bowiem ustawy o funduszach bezpiecznych, w których towarzystwa lokowałyby nasze pieniądze, gdy do emerytury zostało nam niewiele lat. Fundusze bezpieczne - bo nie mogłyby inwestować w papiery ryzykowne, np. akcje.

If only the government had listened to us when we were proposing our 100% failsafe, foolproof, guaranteed, waterproof System, available to the discerning turf connoisseur on recept of cheque or postal order.

Wybierałyby obligacje skarbowe.

If they had listened to their One True Turf Source, they would only have picked Sure Things, and not donkeys.

Chroniłyby nasze oszczędności przed giełdową sinusoidą.
This would have protected your savings from the eventuality of it coming up mud.

“Gazeta” kilkakrotnie wzywała do ich utworzenia.

We often called for betting on form and breeding, And the man that did that could never be burst.

Bo twórcy reformy słusznie założyli, że na giełdzie zarabia się w długiej perspektywie, najlepiej kilkudziesięciu lat.

The tote investors and the bookies take the long view that the house never loses.

Jednak to założenie nie zdejmuje z rządzących obowiązku chronienia ludzi przed momentem, gdy giełdowa huśtawka jest najniżej.

But we know how to beat the odds and profit by laying off long shots against each-way bets at off-course bookies and exploiting the resulting vig differential.
Niech się politycy wytłumaczą, dlaczego o to nie zadbali.

It’s time the politicians adapted our patented, guaranteed System.

Niech parlament szybko naprawi ten błąd, by chronić kolejne pokolenia oszczędzające w OFE na starość.

Parlament should send a cheque or postal order to Gazeta Wyborcza without delay to learn the secrets of the turf trade that guarantee a retirement in clover.