Turkey’s pro-government media outlets have been the subject of ridicule on social media since they published stories about economist Timothy Ash’s tweet sarcastically referring to Turkish President Recep Tayyip Erdoğan’s recent move to boost the ailing lira.
Erdoğan’s economic plan, which stipulates that the country’s treasury will make up for losses incurred by holders of lira deposits should the lira’s declines against hard currencies exceed bank interest rates, aims to convince people who have deposits in foreign currencies to switch to the lira, helping the Turkish currency curb losses.
Following Erdoğan’s announcement, the lira posted its biggest gain in decades, rebounding after soaring as much as 20 percent against the US dollar on the same day.
“Turkey – just realised, Keynes, Friedman, Hayek, Solow, Samuelson, Adam Smith, Kornai, Dornbush, the Fed, ECB, BOE, me, all Western economists, we are all idiots. Wasted all our time, learning economics. Erdogan just rewrote all the theories,” Ash tweeted on Thursday.
Turkey – just realised, Keynes, Friedman, Hayek, Solow, Samuelson, Adam Smith, Kornai, Dornbush, the Fed, ECB, BOE, me, all Western economists, we are all idiots. Wasted all our time, learning economics. Erdogan just rewrote all the theories.
— Timothy Ash (@tashecon) December 23, 2021
The pro-government Yeni Şafak daily and AKİT TV reported on Ash’s tweet, saying that Erdoğan’s move left economists in awe.
Oh dear…looks like someone totally misunderstood what I said. To underline I think the current monetary policy settings in Turkey are completely insane. https://t.co/nIoDluTWQ0
— Timothy Ash (@tashecon) December 24, 2021
“Oh dear…looks like someone totally misunderstood what I said. To underline I think the current monetary policy settings in Turkey are completely insane,” Ash tweeted after the reports.
“Not entirely sure that British sarcasm works very well in the Turkish context,” he added.
Be careful Tim. Some people here ready to accept even insults as compliment 😂 https://t.co/MbBq4Fu8Vq
— Dr. C. Kani Torun (@torunkani) December 24, 2021
“Be careful Tim. Some people here ready to accept even insults as compliment,” former ambassador and opposition Future Party secretary Kani Torun tweeted.
Erdoğanomics 1.0.1. https://t.co/63XJiTCi7c
— Anthony Derisiotis (@aderiziot) December 24, 2021
According to experts, the possible failure of the plan would prompt the central bank to print money in a bid to supply the treasury with the funds to compensate holders of lira deposits for their losses.
The plan reminded experts of something that was tried by Turkey in the 1970s to attract foreign currency flows, mainly from Turkish citizens living abroad. “Convertible Turkish lira deposits” (CTLDs), as they were known at the time, guaranteed the principal and interest payments on these deposits against all risk created from depreciation of the currency.
The scheme led to a huge credit explosion by local banks and triggered a new wave of inflation, creating an excruciating burden on the treasury. As a result, the government ended the practice in 1978.