Remember all the fanfare over the U.S. sending Abrams tanks to Ukraine? Supposedly in time for the much vaunted Spring Offensive?
That didn’t happen. Evidently the usual Biden Administration competency was in play. But now the allotment of M1A1 Abrams tanks (not the M1A2s previously discussed) are finally ready to be shipped over.
The first batch of Abrams tanks that the U.S. is providing to Ukraine was approved for shipment over the weekend, and the tanks remain on track to arrive in Ukraine by early Fall, Army Acquisition Chief Doug Bush told reporters on Monday.
“The last of the set was officially accepted by the U.S. government or the production facility over the weekend. So they are done,” said Bush. The 31 Abrams tanks destined for Ukraine – older M1A1 variants – had been undergoing refurbishment and preparation for shipment for months.
Though the tanks are ready, they still have to be shipped overseas and sent to Ukraine, “along with all of the things that go with them – ammunition, spare parts, fuel equipment, repair facilities,” Bush said. “So it’s not just the tanks.”
The goal, said Bush, remains to get the Abrams tanks to the unit level by “early Fall.” He did not give a specific date or even month. Last month, Politico reported that the tanks would arrive on the battlefield in September.
Helping Ukraine repel Russia’s illegal war of territorial aggression has frequently been cited as a top priority by members of the Biden Administration,a cause in whose over $46 billion in military aid has been sent. Given that the UK’s Challenger 2 tanks arrived in Ukraine in March, it would seem like the Biden Administration hasn’t treated their pledge of Abrams tanks with any urgency.
To be sure, several U.S. weapon systems (HIMARS, Patriot, Excalibur and various drones) have proven absolutely vital in letting Ukraine resist the Russian invasion. But for something the U.S. defense establishment, and just about all our NATO allies, view as a top priority, the Pentagon as been quite sluggish at getting them tanks. A cynic might wonder if it’s because, being drawn from existing stocks, sending them M1A1s doesn’t grease enough Beltway Bandit palms.
Given how long it will take to train Ukrainians on them, maybe they’ll be available for the 2024 Spring Offensive…
No indication yet that this was a Ukrainian rocket attack, drone attack, or even partisan sabotage. But it sounds militarily significant.
Local officials in Russia say an explosion at an optical plant in the city of Sergiyev Posad, about 70 kilometers outside Moscow, killed one person and injured at least 43 people on August 9.
Five of the injured are in intensive care with serious burns or head injuries, according to the city administration’s Telegram account. Some of the 43 people admitted to a regional hospital have shrapnel injuries, it said.
Officials at the city’s central hospital said that a woman had succumbed to wounds sustained in the blast.
Independent Telegram channel Baza shared images of a tall cloud of smoke and identified the site as the Zagorsk Optical and Mechanical Plant, which produces night-vision and other optical devices for the military.
Russian officials later confirmed the location.
Russian news agency TASS has quoted the emergency services as rejecting assertions on social media that the cause of the blast was a drone attack.
That speculation has been fueled by months of remote attacks in Russia that Moscow blames on Kyiv along with Russian reports it “thwarted” two fresh drone attacks near Moscow overnight.
TASS said the blast happened where pyrotechnics were being kept and destroyed a 1,600-square-meter warehouse.
An unexplained fire damaged the same Zagorsk plant in June 2022.
Seemed to blow up real good:
You can’t trust TASS, and it’s entirely possible that it’s your standard negligent Russian military industrial accident. But why would you store pyrotechnics next to an optics factory?
Of all the weapons China is developing, gyrocopters rank very low among those I’m worried about. In truth, I wasn’t even aware they had them until this video popped up in my feed:
The gyrocopter, AKA the autogyro, was a funky forerunner to the helicopter with unpowered rotor blades combined with a propeller to provide lift.
They can fly, but they can’t hover.
China has one in service called the Hunting Eagle Strike gyrocopter.
“What in God’s good name is really going on here? What explains this
seemingly bizarre decision by China to start using gyrocopters in their otherwise modern Army?”
One theory is they’re not for actual combat with other nations, but for carrying out police actions like riot control, murdering Tibetans, murdering protesting students, etc.
There’s also the possibility that it might be useful in border skirmishes with India in the Himalayas.
They also mention Taiwan, but I find that use case really, really doubtful, unless it’s part of the “everything to the coast” kitchen sink invasion plan.
Cost is cheap, though: Only $5,500 a pop.
They have anti-tank missiles, but I have my doubts as to their efficacy on modern western tanks.
The fly low and slow enough that anti-aircraft systems have trouble with them.
All that said, I can’t really see terribly many use cases for this that aren’t better fulfilled by drones.
While I can construct some edge-cases where a gyrocopter might be better at the same price point (grid search in the mountains), but in just about all cases, a drone, a helicopter or an airplane is going to be superior.
Dr. Gal Luft, the “missing witness” from the Biden corruption investigation, told the NY Post last week that he was arrested in Cyprus to stop him from testifying in front of the House Oversight Committee that the Biden family received payments from individuals linked to Chinese military intelligence, and that they had an FBI mole who shared classified information with the Biden benefactors from the China-controlled energy company CEFC.
“I told the DOJ that Hunter was associated with a very senior retired FBI official who had a distinct physical characteristic—he had one eye,” Luft said.
That FBI official is widely believed to be former FBI Director Louis Freeh, who gave $100,000 to a trust for two of then-Vice President Joe Biden’s grandchildren in 2016 shortly before telling Hunter, “I would be delighted to do future work with you.”
Now, Biden’s DOJ has charged Luft with failing to register under the Foreign Agents Act (FARA), as well as Iranian sanctions violations. He’s alleged to have conspired with others to act in China’s interest, including recruiting and paying a former high ranking U.S. government official to support policies beneficial to China.
Democrats are turning the federal justice apparatus into banana republic keystone cops to hide their own crimes.
Speaking of Hunter: “How reckless Hunter Biden photographed himself driving at 172mph while behind the wheel of his Porsche en route to a days-long Vegas bender with prostitutes and pictured himself smoking CRACK while behind the wheel.” No doubt left-wingers will crow about how Hunter is “living his best life.” (Hat tip: Ed Driscoll at Instapundit.)
Federal judge blocks Biden’s censorship schemes. “Terry Doughty, a Louisiana federal judge, issued a preliminary injunction Tuesday blocking certain federal agencies and officials, including the FBI and the Department of Health and Human Services, from communicating with social-media platforms.” Good.
“When I decided to stand up on behalf of disadvantaged children in support of school choice, my Democrat colleagues didn’t stand by me,” [Georgia State House Rep. Mesha] Mainor explained of her decision in a statement to Fox News Digital. “They crucified me. When I decided to stand up in support of safe communities and refused to support efforts to defund the police, they didn’t back me. They abandoned me.”
“For far too long, the Democrat Party has gotten away with using and abusing the black community,” she added. “For decades, the Democrat Party has received the support of more than 90% of the black community. And what do we have to show for it? I represent a solidly blue district in the city of Atlanta. This isn’t a political decision for me. It’s a moral one.”
Remember how Turkey was blocking Sweden’s membership in NATO? Well, they’ve now flipped to backing Sweden’s membership.
Turkey’s President Recep Tayyip Erdogan has agreed to support Sweden’s bid to join Nato, the military alliance’s chief Jens Stoltenberg says.
He said the Turkish leader would forward Sweden’s bid to parliament in Ankara and “ensure ratification”.
Meanwhile, Swedish Prime Minister Ulf Kristersson said: “I am very happy, it is a good day for Sweden.”
Turkey had previously spent months blocking Sweden’s application, accusing it of hosting Kurdish militants.
As one of Nato’s 31 members, Turkey has a veto over any new country joining the group.
Reacting to the news, US President Joe Biden said he welcomed the commitment by President Erdogan to proceed with “swift ratification”.
“I stand ready to work with President Erdogan and Turkey on enhancing defence and deterrence in the Euro-Atlantic area. I look forward to welcoming Prime Minister Kristersson and Sweden as our 32nd Nato ally,” a White House statement said.
German Foreign Minister Annalena Baerbock tweeted: “At 32, we’re all safer together.” British Prime Minister Rishi Sunak said Sweden joining would “make us all safer”.
Mr Stoltenberg announced the agreement late on Monday following talks between the Turkish and Swedish leaders in the Lithuanian capital Vilnius.
The Nato chief described it as a “historic step”, but stressed that a “clear date” could not be given for when Sweden would join the military alliance – as this relied on the Turkish parliament.
Sweden and its eastern neighbour Finland, both long considered as militarily neutral, announced their intention to join Nato in May last year, several months after Russia launched its full-scale invasion of Ukraine. Finland formally joined in April.
Why the sudden turnaround on Sweden’s membership?
For one thing, they’re getting F-16s out of the deal. For another, Erdogan is pushing for EU membership again, and needs all the friends he can get if he wants to stop Turkey’s disasterous economic slide. Turkey is hemorrhaging foreign currency reserves thanks to Erdogan’s SuperGenius economic move of lowering interest rates to flight inflation, so maybe a promise of closer ties to Europe might staunch the bleeding a little.
It could also be Turkey’s age-old enmity with Russia coming to the fore. Or maybe Russia’s poor performance has finally led Erdogan to conclude that Russia is the “weak horse.”
But it’s not just Sweden: Erdogan also indicated approval for Ukraine joining NATO as well. “‘There is no doubt that Ukraine deserves membership of NATO,’ Erdogan told a joint press conference with the Ukrainian president in Istanbul early on Saturday, adding that the two sides should go back to peace talks.”
NATO leaders said on Tuesday that Ukraine should be able to join the military alliance at some point in the future but they stopped short of offering Kyiv an immediate invitation, angering Ukrainian President Volodymyr Zelenskiy.
The leaders were meeting at a summit in the Lithuanian capital Vilnius as Ukrainian troops struggled to make significant gains in a counteroffensive against the Russian invasion forces occupying parts of the country.
The leaders said in a declaration: “Ukraine’s future is in NATO”. But they offered no timeline for the process.
“We will be in a position to extend an invitation to Ukraine to join the alliance when allies agree and conditions are met,” the declaration said, without specifying the conditions Ukraine needs to meet.
I’m sure one of the conditions is “Not having Russia occupying large parts of your country.”
Russia’s illegal war of territorial aggression has made the alliance more united than any time since the end of the Cold War. Clearly it’s in every NATO member’s interest to let Russia dash 50 years worth of Russo-Soviet miltech against the rock of Ukraine, so expect members of the alliance to keep feeding Ukraine’s armed forces for the immediate future.
But having a direct military conflict with a nuclear-armed Russia isn’t on anyone member’s preference card, no matter how badly NATO armies would maul their Russian counterparts. So don’t expect NATO membership for Ukraine until the Russo-Ukrainian War concludes.
The Europhilic, farmer-oppressing, climate cult-believing government of The Netherlands has fallen over immigration policies.
The Dutch government collapsed on Friday after failing to reach a deal on restricting immigration, which will trigger new elections in the fall.
The crisis was triggered by a push by Prime Minister Mark Rutte’s conservative VVD party to limit the flow of illegal immigrants to the Netherlands, which two of his four-party government coalition refused to support.
“It’s no secret that the coalition partners have differing opinions about immigration policy. Today we unfortunately have to conclude that those differences have become insurmountable. Therefore I will tender the resignation of the entire cabinet to the king,” Mr. Rutte said in a televised news conference.
Tensions came to a head this week, when Mr. Rutte demanded support for a proposal to limit entrance of children of war refugees who are already in the Netherlands and to make families wait at least two years before they can be united.
This latest proposal went too far for the small Christian Union and liberal D66, causing a stalemate.
Mr. Rutte’s coalition will stay on as a caretaker government until a new administration is formed after new elections, a process which in the fractured Dutch political landscape usually takes months.
News agency ANP, citing the national elections committee, said elections would not be held before mid-November.
Opposition parties in the Netherlands were pleased with the fall of the Rutte IV Cabinet. BBB frontwoman Caroline van der Plas tweeted a photo of herself smiling asking others to show the face they made when they heard the news.
“Goodbye Rutte, Kaag and the rest!” writes PVV leader Geert Wilders. He said he has requested a parliamentary debate.
PvdD leader Esther Ouwehand hopes for “the definitive end of the Rutte era.” She said, “Unprecedented that the prime minister created a new crisis in an attempt to save his own skin.”
Rutte’s government is the one that tried to seize land from farmers to prevent them from farming as part of their global warming/anti-meat/land seizure agenda. That government deserved to fall. Actually, what it deserved was having angry farmers armed with torches and hay rakes track members down in the streets and thrash them within an inch of their lives, but the Dutch haven’t been much in the revolution business since 1648.
From this remove, it would be nice if the elections could pave the way for a BBB/PVV Euroskeptic coalition focused on property rights, abandoning insane climate change mandates, restricting Islamist immigration, and protecting free markets and free speech. But European politics seldom proceeds along such (to us) logical lines.
I’ve covered Peter Zeihan videos on China’s crashing demographics before. We already knew China was “the fastest aging society in human history, with the largest sex imbalance in human history.” Now he’s dug into new some new data.
It’s much worse than he thought.
“We’ve gotten some new data out of the Chinese that has made it way to the U.N, and so the updates have allowed us to update our assessment, and oh my God, it’s bad.”
“Here is the new data, and as you can see, the number of children who are under age 5 has just collapsed, and they’re now roughly twice as many that are age 15 as age 5.”
“What happened back in 2017, well before Covid, is that we had a sudden collapse in the birth rate, roughly 40% over the next five years among the Chinese, the ethnic Han population, and more than 50 percent among a lot of the minorities. And that is before Covid, which saw anecdotally the birth rate drops considerably more.”
“We’re never going to get good data on death rate, or at least not anytime soon, because the Chinese, when they did the reopening, just stopped collecting the data on deaths and Covid and everything because they didn’t want the world to know how many Chinese died, so they don’t know.”
And if you look at the data from the Shanghai Academy of Science, it’s even worse than the official state numbers.
“China aged past the point of demographic no return over 20 years, ago and it wasn’t just this year that India became the world’s most populous country, that probably happened roughly a decade ago. And it wasn’t in 2018 that the average Chinese aged past the average American, that was probably roughly in 2007 or 2008.”
“This is not a country that is in demographic decay, this is a country that is in the advanced stages of demographic collapse. And this is going to be the final decade that China can exist as a modern industrialized nation state, because it simply isn’t going to have the people to even try.”
“Labor costs you’re having now or as low as they’re ever going to be. Consumption is as high as it’s ever going to be.”
“So even before you consider the political complications or issues with operating environment or energy access or geopolitical risk or regulational risk, the numbers just aren’t there anymore so you have to ask yourself why you’re still there.”
Add to that the fact that China economy is probably overstated by 60%, and it looks like China’s brief days in the sun are already over.
Finland’s newly elected parliament on Tuesday voted in favour of National Coalition Party leader Petteri Orpo to become prime minister, as widely expected, ushering in a right-wing government and ending Social Democrat Sanna Marin’s rule.
Orpo will lead a coalition of the conservative NCP, the nationalist Finns, the minority-language Swedish People’s Party and the Christian Democrats, which together won a majority of parliamentary seats in the April 2 election.
The new finance minister will be Riikka Purra, head of the eurosceptic Finns Party, while the NCP’s deputy leader Elina Valtonen will become foreign minister when the government takes office later on Tuesday.
“I warmly thank you for the confidence you’ve shown me,” Orpo told parliament shortly after the vote.
A self-styled fiscal conservative, Orpo campaigned on a promise to reduce the government’s budget deficit by cutting spending while also reducing taxes and seeking to boost private sector job creation.
The new coalition also shifts immigration policy to the right, aiming to cut refugee quotas, raise the bar for work-based visas and make it more difficult for foreigners to obtain citizenship, key priorities for the Finns Party.
Orpo is hardly a bomb-thrower, with previous stints on the boards of the European Investment Bank and the European Stability Mechanism, which are embedded very deep inside the EU’s deep state. Nor will Finland’s new coalition be mistaken for the second coming of Ronald Reagan.
But time and time again we’re told that the EU policies (just like Social Justice policies in the U.S.) are popular, while time and time again EU member states elect government that oppose many of those policies, especially those favoring unlimited Muslim immigration into member countries.
Finally, those who assert that Euroskeptacism goes hand in hand with appeasing Russia will find that they’re mistaken, as Orpo backed Ukraine and Finland joining NATO.
For Finland Russia’s proximity is a key geostrategic fact, and the war in Ukraine indicates how the problems associated with Russia’s aggressive behaviour have materialized. Russia is defining its interests in a way that threatens peace in Europe and creates insecurity in others. During the past decade, there have been uprisings in several of Russia’s neighbors, which the Kremlin has sought to violently suppress. Russia seeks a new sphere of influence and wants to halt the democratic development of other countries. Not NATO, but the people’s will to decide for themselves seems to be a threat to Putin’s regime.
Finland’s new government, like the old, is firmly in the NATO camp. Funny how fighting the Soviet Union/Russia repeatedly throughout the 20th Century will do that…
More Biden corruption comes to light, California gets even more crazy, and two former European Prime Ministers step out of the spotlight in different ways.
House Oversight Chairman James Comer revealed Thursday that he expects there is evidence of at least $20-$30 million being made in illegal payments by foreign nationals to the Biden family.
Appearing on Fox Business, Comer stated “We have more bank records coming in but we’re gonna exceed $10 million this week but I think we’ll get up to $20-$30 million.”
He further noted that it is becoming clear that the Bidens potentially engaged in bribery, influence peddling, and money laundering.
“This is going to be hard for Biden to explain, this is not going to go away, and I think eventually the mainstream media is going to start asking the real questions,” Comer added.
“They know there’s something wrong here. They know all the allegations have merit, because of where Joe Biden was, because of what we’ve seen on tape before, where Joe Biden bragged about firing that prosecutor,” he added,
“They know that this family created these shell companies. They know this family was money-laundering, they were profiting off Joe Biden’s influence,” Comer asserted, adding “The media knows that – they’re just not covering it.”
“I can assure you: there is more money that we’re going to be able to identify, that was transferred between foreign nationals in other countries and the Biden family,” Comer further emphasized, adding “I think, eventually, the mainstream media will turn on Joe Biden and start asking the real questions: ‘What did your family do to receive all this money?’”
Speaking of Biden family corruption: “House Oversight Panel Subpoenas Former Hunter Biden Associate Devon Archer…[The committee] is particularly interested in Archer’s involvement in the family’s international business deals, which included countries like China, Russia, and Ukraine.” Archer was in Global Seneca Partners with Hunter Biden and John Kerry’s stepson.
“Baltimore Police Commissioner Michael Harrison stepped down this week as the progressive-run city struggles with homicides, a drug crisis, and a troubling rise in violence involving teenagers.” Time to pull this out again:
Silvio Berlusconi, Italy’s longest-serving prime minister, dead at 86. Berlusconi revived Italy’s economy, but then couldn’t keep it out of the PIIGS. But for a whilehe kept the wolves at bay.
Also stepping out of the spotlight this week: Former UK Tory Prime Minister Boris Johnson resigned from Parliment. Other than getting Brexit accomplished, Johnson’s tenure seemed all sizzle and no steak.
In April 2023, an unelected Board in California voted to force trucking companies to buy zero-emission trucks. This technology is at early-stage adoption in limited segments, and infrastructure buildout is lagging behind what is required to support electrification in our industry. The Board unanimously advanced the Advanced Clean Fleet rule to accompany California’s equally tough electric vehicle sales mandate regulation, the Advanced Clean Truck rule, that would require truck manufacturers to sell zero-emission vehicles. These two regulations together are designed to create an artificial electric vehicle market sooner rather than later.
This new rule was made at the behest of the environmental lobby, which pushed for unrealistic targets and unachievable timelines that will undoubtedly lead to higher prices for goods delivered to the state and fewer options for consumers. ATA has strongly opposed this rule from the outset and testified at a hearing in Sacramento to express the trucking industry’s concerns directly to the Board.
Snip.
Today’s clean diesel trucks can spend 15 minutes fueling anywhere in the country and then travel about 1,200 miles before fueling again. In contrast, today’s zero-emission trucks:
Have significantly less range of about 150-330 miles between charging or refueling;
Need to be charged or refueled more often and for longer periods of time leading to unproductive downtime;
Cost two to three times more than a comparable clean-diesel truck; and
Weigh thousands of pounds more, reducing payload capacity and requiring more trucks and drivers to move the same amount of freight.
Also: “The California Energy Commission estimates that 157,000 chargers will need to be installed by 2030 to support California’s heavy-duty vehicle electrification goals.” Assuming there’s enough Lithium in the world for the batteries… (Hat tip: TPPF.)
Hope for San Francisco? Residents replace drug-addicted transients on their local sidewalks with large planters.
I have an in-process post titled “League of the Boned” in embryonic form, which was going to be about how each country in the League has been screwed by deficit spending, high interest rates and endemic corruption. But there so much boning to write about, and so many members of the League, that I thought it best to split it up into individual posts.
First up is Turkey, not because it’s the most boned, but the one whose immediate boning is made more acute by recent events, namely Recep Tayyip Erdogan’s reelection.
Recep Tayyip Erdogan’s supporters are celebrating after Turkey’s long-time president won Sunday’s vote, securing another five years in power.
“The entire nation of 85 million won,” he told cheering crowds outside his enormous palace on the edge of Ankara.
But his call for unity sounded hollow as he ridiculed his opponent Kemal Kilicdaroglu – and took aim at a jailed Kurdish leader and the LGBT community.
The opposition leader denounced “the most unfair election in recent years”.
Mr Kilicdaroglu said the president’s political party had mobilised all the means of the state against him and he did not explicitly admit defeat.
International observers said on Monday that, as with the first round on 14 May, media bias and limits to freedom of expression had “created an unlevel playing field, and contributed to an unjustified advantage” for Mr Erdogan.
President Erdogan ended with just over 52% of the vote, based on near-complete unofficial results. Almost half the electorate in this deeply polarised country did not back his authoritarian vision of Turkey.
Ultimately, Mr Kilicdaroglu was no match for the well-drilled Erdogan campaign, even if he took the president to a run-off second round for the first time since the post was made directly elected in 2014.
But he barely dented his rival’s first-round lead, falling more than two million votes behind.
Snip.
The president admitted that tackling inflation was Turkey’s most urgent issue.
The question is whether he is prepared to take the necessary measures to do so. At an annual rate of almost 44%, inflation seeps into everyone’s lives.
The cost of food, rent and other everyday goods has soared, exacerbated by Mr Erdogan’s refusal to observe orthodox economic policy and raise interest rates.
The Turkish lira has hit record lows against the dollar and the central bank has struggled to meet surging demand for foreign currency.
“If they continue with low interest rates, as Erdogan has signalled, the only other option is stricter capital controls,” warns Selva Demiralp, professor of economics at Koc university in Istanbul.
Tiny problem: Strict capital controls tend not to work. By the standards of the Middle East, Turkey is fairly open and fairly modern, and getting around currency controls is one of the use cases that cryptocurrencies are ideal for.
Indeed, the currency problem is so severe that Turkey’s foreign currency reserves just turned negative.
The Turkish central bank’s net forex reserves dropped into negative territory for the first time since 2002, standing at $-151.3 million on May 19, as the bank – following Erdogan’s strict orders – scrambled to counter demand for hard currencies (USD, gold, crypto) ahead of Sunday’s runoff vote.
Forex demand in Turkey surged to record levels ahead of May 14 on companies’ and individuals’ expectations that the lira, which lost 44% in 2021 and 30% in 2022, will plunge after the vote (spoiler alert: those fears have been justified).
As we discussed last week, the central bank’s forex reserves have sagged in recent years due to costly market interventions and other efforts to cool forex demand. The bank’s net reserves dropped by $2.48 billion in the week to May 19, to their lowest level since February 2002. They have dropped $27.7 billion since the end of 2022, and were at negative $3 billion as of May 19. The net forex reserves would be even more negative if outstanding swaps, courtesy of foreign central banks and which stood at $33.50 billion on Wednesday, are deducted (as they should be since the CBRT will have to repay these at some point).
And while the endgame here is clear to all, few are willing to say it out loud for fear of retaliation by the Erdogan regime (no really, he has been known to throw people in jail for recommending a Turkish lira short); yet one bank which decided to double down on Goldman’s dire view of how it all plays out is Morgan Stanley, which in a note last week (available to pro subscribers in the usual place), wrote that the turkish lira plummeting to 28 by the end of the year, is likely in the cards (in our view, that’s a rather optimistic take since the lira is about to become the new Bolivar where soon new zeroes are added daily if not hourly).
This is, I think, a bit of an exaggeration, since Turkey is a much bigger and more important country (and economy) than Venezuela, and while they’ve done several terribly stupid things with their economy, they haven’t gone full socialist starvation scenario on it.
The biggest concern when Erdogan came to party was his Islamist roots, and how he dismantled Turkey’s own peculiar systems of checks and balances, namely that anytime the government would move too far in an Islamist direction, the military would step in, depose the current government, rule for a while, and then step down once things had calmed down again. That doesn’t look very much like classic western democracy, but it served well enough for Turkey, partially insulating it from the wild swings between different despots common in the rest of the Islamic world.
The bad news is that Erdogan demolished those checks and balances in his drive to centralize power in his own hands, purging the military of anyone he thought might possibly oppose him. The good news is that, after all that, he turned out to mostly be a typical Middle Eastern strongman rather than a fervent jihadi. The bad news is that he’s also a complete economic ignoramus, and his stupidity is making Turkey’s economic problems much worse.
Here Patrick Boyle explains just how stupid:
On Erdogan’s idea that low-interest rates can cure inflation: “The official annual inflation rate in Turkey was 43.7% as of April. This is actually down from the 80% inflation rate that Turkey saw the prior year. There is no guarantee that this slowdown will persist. There is in fact widespread suspicion that the official numbers understate an inflation rate that according to independent experts is actually closer to 100%.”
The February earthquakes didn’t help.
“Another term for President Erdoğan would likely imply a continuation of the current policies with a heightened risk of persistent very high inflation and severe currency pressures.”
“The high inflation, along with government largess and efforts to prop up the currency are threatening economic growth and could push the country into a deep recession.”
The Lira is trading near record lows against the dollar.
“Net foreign assets, a proxy for the size of Turkey’s foreign currency holdings, have declined to minus $13 billion dollars from $1.4 billion dollars a year ago, according to central bank data.”
“Those figures include billions of dollars in funds borrowed from the domestic banking system through swaps. Pressure on international reserves has been ‘significant in recent weeks’ as the government made efforts to prop up the economy ahead of Sunday’s elections.”
“Turkey’s foreign currency and gold reserves tumbled $17 billion dollars in the six weeks leading up to the first round of the election according to the FT, a decline of 15 percent.”
“Turkey had a painful experience of high and chronic inflation from 1975 through to 2004 caused by political instability, poor institutions, high public sector budget deficits and depreciation of the Turkish Lira which culminated in a severe financial crisis in 2000-2001.”
“The establishment of an independent central bank in 2001, which focused mainly on fighting inflation along with tight fiscal policies implemented at the same time brought inflation under control.”
“During his election campaign, Erdogan showed no intention of changing his policies, doubling down on his claims that low interest rates would help the economy grow by providing cheap credit to increase Turkish manufacturing and exports. ‘You will see as the interest rates go down, so will inflation’ he told supporters in Istanbul in April.”
With the cost-of-living crisis on many voters’ minds, Erdogan launched a range of expensive policies in the lead up to the election aimed at reducing the immediate impact of inflation on voters. He raised the minimum wage repeatedly, announced a free month of natural gas for consumers, reduced electricity prices increased civil servant salaries and changed government policies to allow millions of Turks to receive early government pensions. Just days before the first round of the election He gave a 45% pay rise to 700,000 Turkish public sector workers, saying he would “not let anyone be crushed by inflation”.
So he combated inflation by guaranteeing there would be more inflation, just like Joe Biden.
Boyle thinks Turkeys problems can be solved by adopting sane economic policies. “For a country in crisis, Turkey’s problems are not that difficult to solve – it is not a total basket case economy like some other emerging markets. The country mostly just needs a sensible interest rate policy and an independent central bank. Turkey has a lot of positives, it has a diversified economy, growth is good, it has good demographics and an educated workforce.”
This is true, but it was also true before Erdogan got into power and screwed things up. Peter Zeihan thinks that Turkey has the right mix of geography and demographics to be a future regional power. But there’s an awful difficult present to get through before that happens…
