Turkey's Erdogan: A Smart Man With Jews on the Brain - by Jeffrey Goldberg

Turkish PM Recep Tayyip Erdogan

It's time to call Turkish Prime Minister Recep Tayyip Erdogan what he is: a semi-unhinged bigot.

Optimists have argued, these past few years, that Erdogan's anger at Israel was motivated by a genuine sense of grievance over the notorious 2010 flotilla incident. The flotilla, you'll recall, was a project of pro-Hamas Turkish activists that was meant to break what they termed an Israeli blockade of the Gaza Strip. Israel's attempt to stop the flotilla ended in the deaths of eight Turks and one Turkish-American.

The Turks demanded, among other things, that Israel apologize for its handling of the affair. Israel resisted for three years, saying that its soldiers were attacked by the Turkish activists when they boarded the ship, and that Israel had the legal right to stop the flotilla from approaching its waters. Nevertheless, the Israeli response was horribly botched, and this year, Israeli Prime Minister Benjamin Netanyahu, coaxed and cajoled by President Barack Obama, picked up the phone (with Obama sitting right there with him) and apologized to Erdogan for the unnecessary deaths. This apology was supposed to usher in a newer, quieter era in Turkish-Israeli relations.

Except that Erdogan has Jews on the brain, and once you get Jews on the brain it's hard to get them off. So the other day, in talking about the strife in Egypt, he said: "What is said about Egypt? That democracy is not the ballot box. Who is behind this? Israel is. We have the evidence in our hands."

The evidence for the assertion that Israel was behind the violent suppression of the Muslim Brotherhood? Erdogan himself offered none, but an aide later said that the prime minister was referring to an Internet video Erdogan saw in which the current Israeli justice minister, Tzipi Livni, and the famous French-Jewish philosopher Bernard-Henri Levy, were speaking at a news conference in 2011. In the video, BHL, as he is known, expressed opposition to the Muslim Brotherhood's ruling Egypt.

Although not very good at making friends, either in Europe or in the Middle East, Erdogan is known as a very smart man. Yet anti-Semitism is making him stupid. As Walter Russell Mead of the American Interest magazine says, those who are burdened with anti-Semitism are unable to discern cause and effect relations in complex social settings. If I were an investor in Turkey, I'd keep this mind.

Read more: Bloomberg

Egypt: Forget the Coup: Egypt's Economy Is the Real Problem - by Ben W. Heineman Jr.

Egypt's political dilemmas are based, in important part, on its economic dilemmas. But since the overthrow of the Morsi government, far less attention has been paid to crucial economic issues than the political and constitutional conflicts. But economic issues--and the lack of a legitimated economic vision--have been as much a cause of the unrest, change and uncertainty in Egypt, and during both the Mubarak and Morsi tenures. And they may be more intractable.

Any new permanent government will face the choice Morsi had but never made: between market economic reforms on the one hand, led by economists and business people to promote growth, jobs, and trade, and a command-and-control statist economy on the other, which provides subsidies for essentials like energy and staples like bread, rice, and sugar--and also provides sinecures for ex-military officers. Part of the problem is that "liberalizing" reforms--there have been three waves since the end of Nassar's regime than 40 years ago--are perceived as helping the rich and reflecting crony capitalism, rather than raising Egypt as a whole.

Morsi's inability to chart a clear economic path led to a significant worsening of Egypt's economic straits, which in turn helped mobilize the powerful street opposition. From just before 2011 to today: GDP growth is down (from nearly 6 percent to under 2 percent); unemployment is up (from 9 percent to over 13 percent); foreign exchange reserves are down (from $35 billion to just under $15 billion); the budget deficit has more than doubled (from nearly $110 billion to over $230 billion); a quarter of that budget are subsidies to poor and middle class; and the poor and near-poor total approximately half of the population.

Tourism is down significantly due to security concerns; direct foreign investment has declined sharply; gasoline and power shortages bedevil the population; a slide in the Egyptian currency has raised prices of foreign goods such as food imports; wealth distribution is badly skewed; the nation's credit rating is cratering; the hidden "black" economy constitutes as much as 40 percent of Egyptian economic activity. And corruption continues.

Read more: Forget the Coup: Egypt's Economy Is the Real Problem - Ben W. Heineman Jr. - The Atlantic