The Wall Street Journal has a look at how the economic meltdown is affecting Eastern Europe:

The Baltics and Balkans succumbed to the same bubblenomics as house-happy Central California or Iceland. Double-digit growth in Latvia, Lithuania and Estonia was fueled by debt and short-term capital inflows. Now these gains are being reclaimed, with GDP slated to fall by double digits in the Baltic states this year. The scene of the crash looks familiar. Residential mortgage debt as a share of GDP in Latvia and Estonia climbed, respectively, to 33.7% and 36.3% -- worryingly high because a lot is denominated in foreign currency, though still not as high as Iceland's 121%.

The government in Latvia, a regional banking hub, fell last week after the IMF imposed austerity measures. Standard & Poor's downgraded its debt to junk; Romania is the other noninvestment grade member of the European Union. In Russia, Vladimir Putin spooked investors with his assault on property rights, and the collapse in oil prices did the rest last year. The Moscow stock market fell further than any other in the world, straining companies that borrowed heavily overseas. For now, Russia has deep enough reserves to avoid a repeat of its 1998 default-devaluation.

Ukraine isn't as fortunate. It suffered when prices for its chief export (steel) fell while its chief energy input (natural gas) rose. Though a vibrant democracy, Ukraine isn't blessed with a mature political class able to put its economy on stable footing. The IMF has stepped in there, as it has in Hungary.

Elsewhere more virtuous behavior has partially shielded countries with stronger fundamentals. The Czech Republic and Poland avoided the worst of easy-money mania and attracted capital for direct investment, often in export industries, that can't flee at the first hint of trouble. Their economies have made the transition from communism to a market economy built on the rule of law.

It is also worth mentioning that these things are happening all over the world, and it is becoming increasingly hard to pin all the economic malaise on one person, such as George Bush or Bill Clinton. A politician can control an economy about as easily as a river, although Obama certainly seems intent on digging a whole new channel and changing the flow if he can get Congress to go along with it. He would be wise to realize the limitations of top-down control on any market.