Tuesday, June 30, 2015

Who Are The Very Serious People (Greece Edition)?

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.

Barkley Rosser


Sandwichman said...

Serious people?

Thornton Hall said...

There's a hedgehog (as opposed to fox) thing among Reaganists that amounts to a political Cartesian "Cogito ergo sum", a base certainty upon which all knowledge is built. That certainty is: "We were correct that the Comunists were bad."

And of course, they were right! There is a perfectly sensible meaning of the term "the Communists" where it is almost a tautological fact. Stalin and Mao were very bad.

The problem is two-fold:
1. Once you expand the definition of "the Communists" to include non-mass murderers it becomes far less certain, and
2. Only an idiot would construct a worldview on the foundation of "We were right, the Communists were bad."

One of the most glaring manifestations of number 2 is the bizarre but common notion that the profit motive is the only effective motive. It's almost a "cogito" itself: I want more, therefore I am.

Sandwichman said...

"Sociopath" is the clinical term for people without empathy.

Sandwichman said...

Alternative spelling: soceuropaths.

Sandwichman said...

(before some pedant corrects me, I know the clinical term is "antisocial personality disorder," not sociopath, but it makes for a better comment to say that the clinical term is sociopath. Sandwichman doesn't know what the clinical term for pedant is.)

rosserjb@jmu.edu said...

BTW, in terms of the groups that seem to have Cowen especially upset, the Trotskyists and the Maoists, they have rather different histories in terms of awful past bloodthirstiness. The Maoists have to go out of their way to disassociate themselves from the worst of Mao's own disastrous policies such as the Great Leap Forward and the Great Proletarian Revolution, both of which resulted in millions dying, not to mention from Pol Pot in Cambodia, one of the worst mass murderers ever in terms of percentage of his population. The Maoists also have to deal with the fact that Mao defended Stalin, so in effect Maoists may also be held for deaths by Stalin, a pretty heavy load.

OTOH, Trotskyists have never really been in power anywhere ever in any serious way, and have a long history of opposing both Stalin and Mao. Most of the Trotskyists to come to power have usually been former Trotskyists, in France and Bangladesh, with very moderate views and policies, with some former Trots in the US becoming neocons, such as the Kristols (parents of William, to be more specific). It should also be noted that the Trotskyists at one point had numerous factions, although most of these have largely disappeared. In any case, I have a hard time getting too terrified of Trotskyists holding some government positions, even if maybe one should keep an eye on those Maoists to make sure they do not start trying to make people march around in dunce caps in the streets.

Jack said...

It's interesting to note that all of the people referred to in Barkley's post are not trained in economics with the exception of Minister Krautsenheimmer. They all write under the pseudonym of journalist, but rarely do they report the facts of the news of the day, but instead provide readers with their analysis of the issues of the day. This is often referred to as propaganda. Why a propagandist is given any weight of wisdom in regards to important issues of the day remains a mystery, but look at how much consternation they do manage to drum up. I wonder why it is that they all seem to offer the disregard for on contractual obligation to a group, in this case the pensions of the formerly working people, in favor of the contractual obligations to another group, the banking sector in Europe. Why is one contractual obligation any more sacrosanct than another?

rosserjb@jmu.edu said...


Actually, Tyler Cowen is a professional economist, PhD from Harvard with Thomas Schelling as his major prof. He is Director of the Mercatus Center at George Mason University and a Professor of Economics there, with many publications, including quite a few books on many topics to his credit. It is easy from reading MR to think he might not be an economist because he expounds on many things, but he is a polymath, having been the youngest chess champion in New Jersey, among other things.

Tyler has a strong libertarian orientation, and I think that is in this case really driving his views, a visceral dislike of the current Greek leadership. But, while I disagree with him on many things, I view him as generally very open and fair minded, often annoying his more libertarian or other commenters, some of whom are real troglodytes, because he is too open to views that are not consistent with his general ideology. He generally takes facts seriously, and this is something I respect. I also happen to know him personally and have friendly relations with him.

Jack said...

Is there really a difference between being employed by the Mercatus Center and being employed to propagandize in regards to economic issues? Is that the same Mercatus Center that is heavily funded by Koch Industries and other corporations with a similar view of what is good for the economy? Or should I say, what is good for the owners of the means of production rather than the general citizenship as a whole?

There's little difference, when it comes to producing opinion pieces that are generally disruptive of the facts and intended to obfuscate reality, between propagandists employed by the media and those employed by organizations set up with the intent to distort economic and social issues.

Sandwichman said...


Being an ideological hack propagandist doesn't disqualify one from being an economist. Au contraire.

Thornton Hall said...

Given the assumptions drummed into kids in Econ 101, it's actually quite amazing when they manage to not be utter propagandists. The great difficulty, of course, is that people like Krugman generate propaganda that comes with (frequently) correct policy advise.

How do you stop the propaganda machine when all the "experts" who endorse the humane policy choice will defend to the death the validity of the propaganda process that also generates the sociopath (or chimp-like) policy advice?

Sandwichman said...

Good question, Thornton. I wish I knew the answer!

I'd be acclaimed and we would all be a lot better off. ;-)

Jack said...

The question, "How do you stop the propaganda machine when all the "experts" who endorse the humane policy choice will defend to the death the validity of the propaganda process that also generates the sociopath (or chimp-like) policy advice?"

My favorite answer (now more than 200 years old)to the question.

"When, then, will the people be educated? When they have enough bread to eat, and when the rich and the government cease bribing treacherous pens and tongues to deceive them; when their interests are identified with those of the people. When will this be? Never." M. Robespierre

At least he understood the short comings of his fellow citizens and took an alternative approach to the problem.

Unknown said...

There is no question that Mercatus and Cato and even AEI have hired talented economists. On the other hand they have clear agendas and like most large organizations expect their employees to produce product compatible with that agenda. And in my experience, which is weighted heavily to my area of interest/hobby of Social Security, they do just that.

This doesn't mean that they lie, at least overtly and always, it doesn't mean that analytical papers they submit at conferences or for publication are not solid scholarly work. That is most of them are not the moral equivalents of the pond scum sucking tobacco scientists of days of yore. What it does mean is that their presentations of their work in popular form always aligns with the interests of their employers. In a way not generally found in most flagship schools of academia.

George Mason (where Mercatus is housed) is for all practical purposes a Libertarian University in much the same way that Liberty is a Christian University (or the way that all Soviet Universities in the 30s were Stalinist U's and Chinese Universities in the 60's were Maoist).

Tyler Cowen might be the nicest guy in the world. He might be sharp as a whip. But simply by accepting a position at Mercatus he has put himself in much the same position as lawyer Tom Hagen in the Godfather movies: working for the Boss's agenda. Whatever that might be. Andrew Biggs, formerly of Cato and now at AEI is the same way. Nice guy, very sharp, rarely if ever tells an outright lie in a way that can be pinned down. But since Graduate School has never had a job that didn't involve 'reforming' Social Security in the interests of his avowedly anti-New Deal employers. Cowen just isn't as specialized as Biggs in this regard.

Jack said...

What Bruce said, but in an abbreviated format:
Both are sycophants to the oligarchs that control the purse strings of our economy and who's agenda is their personal enrichment. In the process they sell themselves cheap.

Thornton Hall said...

But presumably the interest of academics must occasionally overlap with the interest in seeking truth? Shouldn't there be an NBA basketball player level salary in it for the professor who demonstrates the rare ability to explain to physics majors like Cochrane and Paul Romer, that in terms understandable to Krugman--author of the Introduction to Asimov's Foundation series--there can no such thing as economics, currently conceived, because it amounts to Hari Seldon's science of "psychohistory".

But in real life we are all "the Mule", ie, every human being has "the capacity to disrupt Seldon's plan by invalidating Seldon's assumption that no single individual could have a measurable effect on galactic socio-historical trends on their own, due to the plan relying on the predictability of the actions of very large numbers of people."