Impending Depression

I see ludicrous people who candidly pin their faith on the belief that the Turkish economy is sanctified with a charm of eternal immunity from crises as long as the Justice and Development Party (AK Party) members warm the Cabinet seats. Their belief is an unfounded fallacy, which will be proven in no uncertain terms sooner or later.
I am not a soothsayer, nor am I a doomster, but there is a crisis looming like dark clouds over the horizon. When the village is in sight, you don't need a guide.
Still, for many, the economy is a village with a tangled grid of roads and it does require an escort to wander in it. Numbers are recognized guides on the roads of the economy but unfortunately, they do not always reflect the bare truth. They need interpretation as their speech may sound like gibberish to some.
Crisis is a misrepresented term for correction, which for the most part happens automatically within the idiosyncratic mechanisms of every economy. People tend to call a correction a crisis because they look at its consequences, which are dire for the majority in the short term. However, a crisis is a product of accumulated anomalies in an economy like structural mishaps, improvident policies, loose regulations, shortsighted politicians, greedy investors, bubbly assets and aggregated irrational decisions by the economy's agents, from mere consumers to complex conglomerates. A crisis is therefore an amalgamation of some or all of these serious glitches, but people tend to believe that it is an evil raining down on an economy from out of nowhere. They tend to believe that a crisis is like Satan, which in their false perception, is the cursed cause of evil and due to every fault human beings commit.
Joseph Stiglitz, a Nobel laureate in economics and one of the most respected economists of modern times, was expressing anxiety a few days ago in an interview with Pelin Ünker in the Cumhuriyet daily. Turkey has come to the end of the road, he said, without mincing words. A chronic current account deficit, overdependence on hot money to finance it, high inflation rates and a decelerating economy are warning signs, he said.
Stiglitz is only one of the premonitory pundits expecting a crisis in Turkey. Lots of others have already left nothing more to say and I am not going to repeat the obvious. I will not attempt to draw a detailed analysis of how and why the central bank is so ineffective at hitting the target to bring down the sticky inflation. Or how and why the current account deficit is as obstinate as a mule and is not responding to the government's radical measures to bring it to heel. Or what the rising seasonally adjusted unemployment rates are telling us, why the government is not as attentive as it used to be to avoid shaking market confidence, why the central bank is not bold enough to deflect the concerns that it is acting with one eye on Prime Minister Recep Tayyip Erdoğan's lips. Neither will I explain why policymakers perceive the SOS signals sent by the industrial production index as a jig rhythm, or for what reason the purchasing managers' index (PMI) index values have hit the lowest levels in almost six years and are still not seen as bad enough to stir our politicians to action.
Of course, I will omit a detailed description of the ominous peril of a housing bubble, our overreliance on the construction sector and problems that will certainly arise while looking for funds to finance multibillion mega-projects amid worsening liquidity conditions. One might expect me to spare another section for a discussion of the final steps the US Federal Reserve (Fed) will soon be taking to unwind its loose monetary policy, or Quantitative Easing, and start hiking up its interest rates, which will undoubtedly hit the Turkish economy before this year is over, but I will skip that, too. Or you may be waiting for me to underline the dangers of the excessive short-term debts in foreign currency that our private sector companies owe to lenders. They may be able to roll it over -- with higher costs and shorter terms, but I will not linger on this, either.
And any analysis of how and when the crisis will break out in Turkey would be lacking without a particular mention of the implications of the government's assiduous struggle to sink a private bank out of its animosity toward a social group with ties to the bank. The persistent political tensions, the 2015 general elections, the rise of an authoritarian regime and the dangers it promises for the free market economy, the emergence of crony capitalism, the spreading corruption economy, and most importantly, the fatally wounded rule-of-law would require a particular emphasis in any discussion on the economic crisis in Turkey. But I will not be spitting out words on them either. A piece of good news is not news at all, but we are passing through such a terrible time that even these adversities and anomalies are no longer news, they have become our new normal.
All I want to say today is that this rumble of distant drums doesn't sound like it is coming from a parade. It may instead be the footsteps of an impending crisis, like an army waiting in the wings to invade.

İBRAHİM TÜRKMEN (Cihan/Today's Zaman)