Saturday, January 31, 2015

On Being A "Very Serious Person"

Paul Krugman and many others, including me, have long made fun of the category of people labeled "Very Serious People"(VSPs).  They have been identified as those in Washington especially, but also their close allies and sycophants in Europe (not too many in Asia, but a few), who have made numerous predictions and related policy prescriptions over recent years on various topics, with those that have had a chance of being proven true or not to have been found to be false, but, unfortunately those people having great power in many nations.

This VSP cult has been centrally allied with those calling for ever lower budget deficits, with many forecasting either massive slowdowns of growth (see the discredited hysteria over the 90% debt/GDP cliff of Reinhart and Rogoff), or some imminent outbreak of inflation, in the more extreme ranks even hyperinflation (our more clubbable and think tankable not going along with the worst of this nonsense, of course).  In Washington in particular, this has also gone along even among supposed liberals at the Washington Post and certain think tanks with constant demands for cutting Social Security and Medicare, because, well, heck, by 2030 the US might have the demographic ratio of young to old that Germany has right now, whom we must all support against the loonies currently running the Greek government, obvious disaster that Germany clearly is right now economically.

Which brings us to a curious development.  After all these years of ridicule, the takeover of the Greek government by a group seriously challenging the currently established practices of the Eurozone are being declared to be so bad that they must be replaced by "Very Serious People," because, heck, imitating Chuchill, the only thing worse than VSPs is non-VSPs.  It is Tyler Cowen who has suddenly stepped forth in the face of the current challenge to world rationality and order to enunciate this doctrine, thereby making respectable the previously unrespectable, not that those previously unrespectable have remotely admitted what a bunch of failures at analysis or forecasting they have been, and only now facing actual threats to their stranglehold on world economic policy.

For whatever reason, I have been unable to link to Tyler's specific post successfully, but, this is a general link to his site.  The title of his post is "The new Syriza goverment is against all-inclusive resorts," now third on the queue, but will move down shortly.  As of right now, the big revelation is that the new Greek PM used to criticize all-inclusive resorts, but, noticing as if they had not known it that tourism is the single biggest contributor to the Greek GDP, they have now backed off doing anything to those places, just as they are backing off some other positions previously articulated by current members of the government, such as super opposition to EU sanctions against Russia.  

It is from this sort of nonsense, where in fact the current Greek government is showing that it is in fact in touch with reality, that somehow Tyler declares that it should be overthrown so that "Very Serious People" can be in charge.  I really am not sure if he is being ironic or what.  Really.  Calling for the overthrow of a government for not doing something he disapproves of, well, this is not serious. Really.

Barkley Rosser


Mike Huben said...

Doesn't VSP simply translate to "people who shill for the 0.01%"? That explains Tyler's position rather simply: he is funded by the Kochs and represents their interests in the class war. The new Greek government might harm some of the investments of the ultra rich, or worse, become a model for other governments to put wealth and finance in their place.

Don Levit said...

Is $18 trillion of debt too low?
Maybe we are misappropriating the debt we have accumulated in lieu of accumulating more
Don Levit said...


I think Tyler is an independent voice, whatever his connections are.


I have no idea. But it is clearly not as ridiculously high as the clownlishly silly Washington VSPs think it is or that we should follow their policy prescriptions such as cutting endowments to get it down.

Kaleberg said...

"Is $18 trillion of debt too low?"

Not really. Most of it went to tax cuts for the billionaires where drives the financial asset bubble. Restore proper taxes, pay off the debt, dry up the capital surplus, and the economy will recover. It's like stopping banging your head against the wall. It feels good, and it's good for you.

Don Coffin said...

Cowen usually manages to conceal his ideological pre-dispositions very well. Here and in the subsequent post to which Peter Dorman links the mask comes off.

"As I’ve said, these are the Not Very Serious People, enough to make you want to have the Very Serious People back. As Garett Jones has noted, Greece needs its Thatcheropoulous — strong, credible, pro-debt renegotiation, pro-capitalism, anti-corruption, pro-tax fairness, and pro-foreign investment. People, that is not what we are getting."

This is especially true, because what seems to be meant by "pro-debt renegotiation" is "no debt re-negotiation"; what is meant by pro-tax fairness" means "cut taxes for the rich and services for the poor"; and so on.

ProGrowthLiberal said...

Don's question amounts to is total Federal debt = 100% of GDP too much? With real interest rates near 0.2%, the real interest cost of this debt is only 0.2% of GDP. And about 30% of this debt is held by the Trust Funds. Just to put Don's question in perspective.

Don Levit said...

The interest rate is artificially low.
If it was raised to 1%, would that seriously disrupt public or private lending?
The Trust Fund debt is debt that one department of the government owes to another department.
The left hand owes the right hand.
What kind of legitimate debt is borrowing from yourself?
What kind of legitimate debt is the Social Security Disability Fund borrowing from the Social Security Retirement Fund?
Don Levit