Money matters

So began an article in Today's Zaman by Michael Kuser on June 18. Compare that upbeat statement to today's Cassandra-like warnings coming from Britain's opposition Conservative Party and, in particular, Shadow Chief Secretary to the Treasury Philip Hammond. According to a Guardian front-page article (Aug. 19), “Hammond warned that Britain's creditworthiness could be downgraded. Such a move, which has been threatened by the international credit rating agency Standard & Poor's, would make it much more expensive to pay back the national debt, which last month reached a record 799 billion pounds.” Earlier in the same article, Chancellor of the Exchequer Alistair Darling was also reported on thus: “Darling estimated in the budget that Britain would need to borrow 175 billion pounds to balance the books this year -- almost 12 percent of [gross domestic product] GDP and a record for peacetime. The government has allowed borrowing to rise rapidly from 35 billion pounds two years ago in an attempt to mitigate the impact of the most severe global downturn since the Great Depression.”

Opposition leader -- and putative next prime minister -- David Cameron even evoked the specter of a return to the bad old days of 1976 when Britain was forced to go cap-in-hand to the International Monetary Fund (IMF) for a loan when borrowing requirements were substantially less than those predicted above. As I recall, the economic crisis in Turkey at the beginning of this millennium was, in part, addressed and eventually resolved by just such an agreement with the IMF that has resulted in the present relatively buoyant state of the Turkish economy compared to the supposedly more advanced and secure US and UK ones. With Germany, France and now Japan declaring themselves in positive figures at last, what then can be said about the allegedly superior economic models imposed by the US/UK axis? “The axis of greed,” perhaps?

Earlier this year, Nurettin Canikli, deputy chairman of the Justice and Development Party (AK Party) parliamentary group, was bullish about Turkey's economic prospects. An article states: “Turkey's talks with the IMF on a stand-by deal were suspended in January due to disagreements over issues such as unregistered income, government spending and the Revenues Administration. They were again picked up at a recent G-20 meeting. Having spoken on the issue, Prime Minister Recep Tayyip Erdoğan said the fund's demands did not suit Turkey's intentions. ‘We owe some $7.5 billion to the fund and could easily pay it off. We are not a slave [to the IMF],' he added.

“With regards to projections for the future of the economy, Canikli said the government has faith in Turkey's potential to come out of the crisis before many other countries. Enumerating two major points that the government has concentrated on while dealing with the crisis, he said one was to rejuvenate domestic demand while the other was to enhance local investment. ‘The government expects to keep the lights on at factories and to minimize unemployment, creating more demand with these two measures,' he explained. Canikli said he expected the Turkish economy to show signs of a nascent recovery starting from the final quarter of this year and that this positive atmosphere would continue through 2010.” (Today's Zaman, June 22). Who is the sick man of Europe now?

But there is a difference between “The Economy,” that stratospheric realm of big bankers and firmament flying financiers dealing in billions, and “the economy,” which hits you and me in our bank balances and weekly utility and grocery bills. Add to this mortgage repayments or monthly rental charges, then we can see that the cost of living has, in general, skyrocketed. Ten years ago, house prices were around four times earnings; this year they are nine times that! No wonder the sub-prime debacle caused by outright greed and blind stupidity had such a devastating domino effect on Western economies. Turkey was relatively unscathed due to the limited amount of exposure to personal mortgage loan risk as this is still in its infancy as a means of obtaining property. Nevertheless, Mr. and Mrs. Average are finding times hard both in Turkey and the UK. On balance, however, I would say that Turks are in a much better position. The situation here in the UK is between dire and precarious. Household debts are spiraling, corporate and personal bankruptcies ballooning -- with 300,000 this year so far, and rising. Unemployment is of historic proportions (over 2.5 million -- the worst in 20 years) and one in six young people are out of work or education. A university graduate can anticipate graduation debts of 23,500 pounds. I have applied for, on average, 10 jobs a week, including in supermarkets, and have so far been unsuccessful -- even in teaching!

Some of you may remember my piece on benefit entitlement here (“Where are the benefits?” Today's Zaman, July 13) recounting my Sisyphean struggle against government bureaucracy to get some financial help while I find my feet. Ten weeks on and I am still at an impasse. I have now taken legal advice -- which appears to have shaken the tree -- and an end seems near. But the conspicuous poverty and penury on parade in the streets of Britain's cities is heartbreaking. After a 12-year absence, I have returned to a post-modernist, post-economic meltdown country. In the meantime, this is what is happening “up there” where “The Economy” is playing its games: “Here's a figure to chew on, though you may find yourself choking. It comes from the US, but there are similar numbers in the UK, too. Remember those banks that were so close to collapse, so desperate and needy they held out the begging bowl and pleaded with the taxpayers for help? Well, it turns out that nine of those banks -- who between them trousered $175 billion of the American public's money in bailout funds -- have fallen back into their old habits: last year they paid their top staff $32.6 billion in bonuses.

You read that right: the number is in billions, not millions. Institutions that were so broke the government had to raid the public piggybank to help them have rewarded their employees -- the geniuses who drove the world economy off a cliff -- with a $32.6 billion shower of cash. That includes the truly incredible $98.9 million paid to Citigroup's master of the universe, Andrew Hall, along with 5,000 lucky individuals who received more than $1 million each.

In the City of London, payday is looking just as golden. Half of Goldman Sachs's first-quarter profit of 1.2 billion pounds has already been set aside for staff rewards. No wonder City traders, so briefly forced to bow their heads in shame, are once again puffing out their chests and revelling in the buzzword of the hour: BAB -- bonuses are back.” This according to Jonathan Freedland in the Guardian (Aug. 18)