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Romney got his facts wrong on Polish economy, government role

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Aug. 1, 2012, 10:46 a.m. | World — by Associated Press

U.S. Republican presidential candidate, former Massachusetts Gov. Mitt Romney speaks with Polish World War II veterans after laying a wreath at the Warsaw 1944 Uprising monument in Warsaw, Poland, Tuesday, July 31, 2012. (AP Photo/Alik Keplicz)
© AP

Associated Press

Associated Press

Republican presidential challenger Mitt Romney hailed Poland's economy Tuesday as something akin to a Republican dream: a place of small government, individual empowerment and free enterprise.

While it's true that Poland is one of Europe's fastest-growing economies and boasts dynamic entrepreneurs, Romney's depiction of Poland as a place of small government is debatable. Even 23 years after throwing off a communist command economy, the Polish government continues to have a strong presence in people's lives: it gives women $300 for each baby they have, doubling that sum for poor families; it fully funds state university educations; and it guarantees health care to all its 38 million citizens.

And while Poland's economic growth has certainly been impressive in recent years, this is partly the result of economic redistribution in the form of subsidies that have been flowing in from the European Union since it joined the bloc in 2004.

"Rather than heeding the false promise of a government-dominated economy, Poland sought to stimulate innovation, attract investment, expand trade, and live within its means," Romney said in a speech in Warsaw. "Your success today is a reminder that the principles of free enterprise can propel an economy and transform a society."

His comments appeared to be an indirect criticism of President Barack Obama's handling of the economy as it struggles to recover from one of the worst recessions in decades.

Romney hasn't yet described his own economic program in detail, but he has generally advocated lower taxes, free markets, less regulation and balancing the federal budget. He has also been highly critical of the government economic stimulus program under which Obama poured money into the economy in an effort to revive it from a deep recession.

He criticizes the new U.S. federal law aimed at increasing the number of people with health insurance, saying such policy decisions shouldn't be dictated by Washington, but left up to individual states.

In Warsaw, Romney heaped praise on Poland, saying that it "empowered the individual, lifted the heavy hand of government, and became the fastest-growing economy in all of Europe."

Poland is indeed one of the fastest growing economies in Europe, with growth of 4.3 percent last year and projected growth of around 3 percent this year — enviable numbers in an ailing Europe where some countries are in recession and many others are stagnant. Business people have also taken to capitalism, with small and medium businesses flourishing around the country.

But the government's role is bigger than in the U.S. According to International Monetary Fund statistics, total government expenditure as a percentage of GDP was about 44 percent last year — compared to 41 percent in the United States.

Romney is on target when he notes that Poland has been living within its means — more or less, anyway. Last year, for example, state debt was 55 percent of GDP, making Warsaw look virtuous compared to many other European countries — or even the United States, whose debt was 103 percent of GDP, according to the IMF.

The government of Prime Minister Donald Tusk is struggling to bring down debt further, mindful of the predicament that Greece and other countries are now in, and recent cost-cutting reforms have won the praises of the rating agencies.

But his depiction of Poland as a haven for innovation and investment is certainly exaggerated. Just attend a meeting of the U.S. Chamber of Commerce in Warsaw or another business group, and the complaints are many: red tape makes it hard to start new businesses, a rigid labor code makes it difficult to fire ineffective employees, corruption and a slow court system can make it hard to enforce contracts.

Some also say that while their companies benefit from a skilled work force, the legacy of communism is still felt in a fear of risk-taking that hurts innovation.

Most Americans would also not trade in their standard of living for Poland's. Growth has been dynamic in part because the country started off from such a low point after throwing off communism. Romney did not mention that unemployment is 12.4 percent or that wages are low. GDP per capita last year in Poland was $20,600 compared to $49,000 in the U.S., according to U.S. government data.

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Gera is AP's chief correspondent in Poland and has covered the country since 2004.

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IvanovPetrovSidorov Aug. 1, 2012, 1:17 p.m.    

Why am I not surprised by this? This typifies like nothing else what Le Care said about the Americans in his latest book A Most Wanted Man - is that the Americans have ignorance as an excuse for bungling around the world.

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kpxoxol Aug. 3, 2012, 6:10 p.m.    

Yet one more proof that the US plutocracy are compete morons.

The "undemocratic" Russia have far better economy growth compared to Poland since super leader Putin organization genius and patriotism shine in the Russia politics.

Russia economy rose from default caused by the US-led Yeltsin cleptoracy to #7 in the World - ahead of UK and France.

Russia GDP grew 4.3% in 2011 and according to IMF estimates is going to grow 4% in 2012 (what means probably another 4.5.. 5% because IMF predicted 3.5% growth for Russia in 2011)

The Russia personal income RISES every year while the west is STAGNANT. Russia personal income is 3 TIMES higher compared to Ukraine and 4 TIMES higher compared to Gruzia - the US banana republic countries,.

The Russia public DEBT is measly 7.8% of the GDP, insignificant compared to the BROKE and SINKING west.

Russia unemployment in 2011 was 6.6% - much lower compared to the EU, US and their banana republics.

Romney is full of shit, heh, heh, heh :D

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