There has long been a meme in the econoblogosphere about Very Serious People (VSPs) in Washington who have been consistently hysterical without reason about budget deficits, with this group having a particularly strong and weird obsession with the US Social Security system, calling repeatedly for cuts in future benefits now because if this is not done, future benefits might have to be cut in the future (or, maybe, there might have to be a fica tax increase, but that is, of course, unacceptable to the VSPs, beyond the realm of possible Serious consideration). Probably Paul Krugman has spread this term more widely than anybody else, whoever coined it, but many of us have used it a lot in regard to this group, especially about those running the editorial page of the Washington Post, led by its editor, Fred Hiatt, along with his columnists such as Robert J. Samuelson, Ruth Marcus, and others, with others scattered across various think tanks in Washington.
So somehow Tyler Cowen at Marginal Revolution has decided to use this term non-ironically in connection with the Syriza-led government in Greece, with him using the term "Not Very Serious People" in repeated posts starting from when they first began demanding changes in their agreements with the troika, even recently applying this when the "Greferendum" was announced (somehow this referendum is also not taken seriously by the VSPs of Washington, with Catherine Rampell on the WaPo ed page today referring to it as a "referendum," yes, in quotes, as if it will not be a real referendum). What is sort of weird about all this is that the usually cool-as-a-cucumber Tyler seems to be really upset about the Syriza bunch, not just thinking they are bad to be demanding to get out of paying debts or daring to question the authority of wheelchair-bound German Finance Minister, Wolfgang Schauble, who thinks he should be German Chancellor rather than Angela Merkel. No, from the beginning he seems to have been really rattled that self-proclaimed Trotskyists and Maoists are in the government, even though the actual domestic policy proposals by Syriza have been boringly center left. These are dangerous people who must not be allowed to remain in power. They seriously must be removed from power, possibly even by any means, with many of his commenters calling for a military coup with nary a whisper of questioning from Tyler of this argument.
Now it turns out that there is a curious link between the unhappiness over those Greek Not Very Serious People and the good old Washington VSPs, although I do not think Tyler Cowen has quite put this together, with his concerns apparently more along Road to Serfdom grounds, not traditional VSP issues. But in today's WaPo, good old Fred Hiatt weighed in on the Greek situation in an unsigned main editorial, "Say 'no' to defiance: Greece should try to reach agreement with its creditors." Unsurprisingly, what Hiatt thinks they should do is simply accept the most recent troika offer, period, despite him recognizing that they have "already paid for austerity measures," although he does not spell out how severe those payments have been (25% decline of GDP with a 25% unemployment with a youth unemployment rate exceeding 50%). But, the bottom line is no criticism of the troika while "Mr. Tsirpas's defiant course is both unwarranted and unrealistic." He does not say he is "Not Very Serious," but he is accused of "play[ing] games with the fate of Europe and the world economy." Oooh, it is all his fault, none of that embittered old man's in the wheelchair or stuck-in-their-egos bureaucrats at the IMF who do not pay attention to their chief economist.
So, unsurprisingly, when it really gets down to it what has Hiatt worked up it is the refusal of the Greeks to cut their pension spending further. As Matt O'Brien reported in yesterday's WaPo, there is in fact very little that separates the two sides at this point. The Greeks have already substantially caved on austerity, basically agreeing to something very close to the primary surplus amount that the troika is demanding (ooops, they are now supposed to be called "the institutions"). The Greeks have proposed a number of further spending cuts, including for defense, and a bunch of increases in contributions to healthcare and pension funds and various taxes. But this is not good enough. Even though Greek pensions have been cut 40% since 2010 (something Hiatt fails to note, of course), they must cut pensions more, even though not doing this was an explicit campaign promise by Syriza and has been loudly announced as a "red line" by them, with precisely a threat to hold a referendum if they were pushed on this (but, hey, who would believe them, given that they are Not Very Serious People?). Frankly, I do not see why the troika simply cannot go along with this to help Syriza save face given that they have already largely given away the store. Maybe it is like Tyler Cowen, they really want to bring this government down because they just do not like them.
Of course, once he gets going on it, Hiatt just goes hog wild with his usual ranting and raving about the pensions. He has failed to get his way on Social Security in the US, but, ah ha! here is his chance with Greece. Make those Not Very Serious People cut their pension spending! After all, it is "unsustainable," likely to be "unpaid" if they go forward with their demands, these being "extreme demands," (which might lead to a "state-run economy [with a]...geopolitical tilt toward Moscow"). On the other hand, the proposals coming from the troika are "financing on reasonable terms." So, these worthless Greeks are just being Not Very Serious People. Shame on them. They need to get on with more cutting of pensions, and then they might become real VSPs, worthy of Hiatt's praise.