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People walk past a currency exchange office on August 13, 2018, in Istanbul, Turkey, where the lira hit another record low overnight. Photo: Chris McGrath via Getty Images

Details about the U.S–Turkey crisis have been unfolding over the past few days: a pastor as stage hostage, frozen assets for ministers on both sides, tariffs on Turkish exports of aluminum and steel to the U.S., a Trump tweet here, a fiery Erdogan speech there. But this is only the spectacular side of the story.

The big picture: The troubles of the Turkish lira have deep roots. Turkey is a structural-deficit country: It needs both short-term money on a daily basis and foreign direct investment in the long run. While the ruling Justice and Development Party (AKP) initially managed these fundamentals fairly well after it came to power in late 2002, doing so has become incompatible with President Erdogan's autocratic governance.

Autocratic countries can survive the absence of rule of law if they sit on a wealth of oil or gas (Saudi Arabia, for example). But Turkey has neither, and its economic survival depends on exports, short-term funding, long-term direct investment, and extensive foreign borrowing. All of these economic lifelines presuppose confidence on international markets, especially in Europe and the U.S.

President Erdogan has done much to undermine that confidence since his first election in 2014, drastically shifting Turkey's political system away from liberal democratic fundamentals toward one-man rule. Erdogan has been fighting the Turkish Central Bank for years, at great risk, against high interest rates, while his desire to create an Islamic class of entrepreneurs has distorted public tenders. With a weakened parliament, a judiciary under political influence, a compromised media, and a permanent propensity to blame all the country’s woes on imaginary enemies, Turkey has seen its international financial rating sharply deteriorate.

The bottom line: Turkey’s president has driven the economy into a narrow, dead-end alley, where measures taken on currency and interest rates run counter to what’s needed, and where the narrative about resisting the U.S. economic “war” will only squeeze the country further.

Marc Pierini is a former EU ambassador to Turkey and a visiting scholar at Carnegie Europe.

Go deeper

Obama says Powell exemplified what America "can and should be"

Then-President Obama speaks alongside former Secretary of State Colin Powell (left) during a meeting in the Oval Office in 2010. Photo: Saul Loeb/AFP via Getty Images

Former President Obama called Colin Powell an "exemplary soldier and an exemplary patriot" in a statement honoring the former general following his death from COVID complications on Monday.

Why it matters: Powell, the first Black U.S. secretary of state, was known as a Republican but played a critical role in helping Obama get elected in 2008.

Justice Department asks Supreme Court to block Texas abortion ban

Abortion rights activists rally at the Texas State Capitol on Sept. 11 in Austin, Texas. Photo: Jordan Vonderhaar/Getty Images

The Justice Department on Monday asked the Supreme Court to temporarily block Texas' near-total ban on abortions while federal courts consider its constitutionality.

The big picture: The court last month allowed the ban to take effect, rejecting an emergency application by abortion-rights groups. The law bars the procedure after cardiac activity is detected, as early as six weeks into pregnancy.

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Illustration: Aïda Amer/Axios

In 2008, a box of 30 anti-inflammatory rectal suppositories that treats arthritis, called Indocin, had a price tag of $198. As of Oct. 1, the price of that same box was 52 times higher, totaling $10,350.

Why it matters: As federal lawmakers continue to waver on drug price reforms, Indocin is another example of how nothing prevents drug companies from hiking prices at will and selling them within a broken supply chain.