How an economist votes

Seasoned journalist Akif Beki argued on May 8 that “objectivity and impartiality are an old media deception,” urging newspapers and columnists to openly declare the political party they are supporting.

It is tough to argue with a former adviser of President Recep Tayyip Erdoğan, who is a regular fixture, along with other “embedded journalists,” on The Gentleman’s plane. Therefore, I decided to announce that I will be voting for the main opposition Republican People’s Party (CHP) in the upcoming general elections on June 7.

While my political views are close to those of the CHP, I also admire the policies of the Peoples’ Democratic Party (HDP). For example, their decision to nominate openly gay activist Barış Sulu, while not a step as major as Ireland’s historic gay marriage vote, is still miles ahead of other parties.

However, I made my decision based on economics, not politics. The HDP’s promise to block Erdoğan’s Super-Presidency is not credible according to the idea of “time inconsistency,” which brought economists Finn Kydland and Edward Prescott the Nobel Prize. After the elections, their best interest would be to receive concessions in exchange for support for the new constitution.

In terms of pure economic policies, the CHP has made great strides. In previous elections, I was afraid to vote for them, as they sounded to be against foreign direct investment and free market economy. The new CHP is pro-FDI, as evidenced by their “Center Turkey” project. In fact, they could reverse the recent exodus of domestic and foreign investors.

That doesn’t mean that I agree with all of their economic policies. I certainly don’t. For example, I do not see higher minimum wages as a panacea for Turkish workers’ woes. On the contrary, they could increase informality and unemployment, especially in less developed areas. Regional minimum wages would be a better idea.

But I did not choose the CHP over their economic policies, which are merely promises, and therefore may suffer from the same time inconsistency problem I argued above. I made up my mind to vote for them after I went over the economy teams of all the major parties and decided that the CHP had the best people.

While the HDP and MHP do not have a lot of heavyweights, the CHP has a very strong team in former Minister Kemal Derviş, who announced his willingness to take part in a potential CHP government, and economics professor Selin Sayek Böke, who is in charge of the party’s economic affairs.

As for the AKP, despite their assurances that economy tsar Ali Babacan would stay on in an advisory role, he will not be running things anymore. He could be replaced by Finance Minister Mehmet “Nominal” (or “Peanuts”) Şimşek or former Borsa Istanbul head İbrahim Turhan. Neither would carry Babacan’s gravitas
nor garner the trust he gets from investors.

I am even more worried that with him gone, Erdoğan’s advisers Brave “Two Guns” Cloud (Yiğit Bulut) and Cemil Ertem could exert more influence. The latter recently called the idea of the “impossible trinity,” which dictates that an economy cannot simultaneously maintain a fixed exchange rate, free capital flows and independent monetary policy, “the globalization trilogy”:)

I wish him, Bravie and the others good luck running the economy if the AKP manages to form a single-party government. I’d probably be grateful soon that my revenues are mainly in foreign currency though.