Dean Baker (born July 13, 1958) is an Americanmacroeconomist and co-founder, with Mark Weisbrot, of the Center for Economic and Policy Research (CEPR) in Washington, D.C. He is credited as being one of the first economists to have discovered the 2007–2008 United States housing bubble.
Early life and education
Baker grew up in the Lake View neighborhood of Chicago.:205-209
In 1981, Baker graduated from Swarthmore College with a bachelor's degree in history with minors in economics and philosophy. In 1983, he received a master's degree in economics from the University of Denver. In 1988, he received a PhD from the University of Michigan in economics.
From 1988 to 1989, Baker was a lecturer at University of Michigan and then, from 1989 to 1992, an Assistant Professor of Economics at Bucknell University. From 1992 to 1998, Baker was an economist at the Economic Policy Institute. During this time, he published a paper with Mark Weisbrot in a journal of evolutionary economics.
In 1999, Baker co-founded, together with economist Mark Weisbrot, the Center for Economic and Policy Research (CEPR), an independent, nonpartisan think tank, which produces economic research on topics that affect people's lives to contribute to the public debate (social security, healthcare, the national budget), and internationally (global economy, International Monetary Fund, and Latin America policy).
Also in 1999, Baker was a Senior Research Fellow at the Preamble Center for Public Policy.
Baker has consulted with officials from the World Bank and has provided testimony to the Joint Economic Committee of the U.S. Congress and to the OECD's Trade Union Advisory Council.
From 1996 to 2006, Baker was the author of a weekly online commentary the economic reporting of the New York Times and Washington Post. The Economic Reporting Review was published from 1996 to 2006. From 2006, he has continued this commentary on his weblog Beat The Press, which was formerly published at The American Prospect, but is now located at the CEPR website.
2007–2008 United States housing bubble
Baker won the Revere Award, along with Steve Keen and Nouriel Roubini, for predicting the crash of the United States housing bubble and the resulting recession, which occurred from 2007 to 2008. He warned about the coming crisis and the related government policies in multiple articles, op-eds and interviews from 2002 to 2005. Basing his outlook on house-price data-sets produced by the U.S. government, Baker asserted that there was a bubble in the US housing market in August 2002, well before its peak, and predicted that the collapse of this bubble would lead to recession. His prediction for when the recession would start was off by only one quarter.
Regarding the housing bubble, Baker was critical of chairman of the Federal Reserve, Alan Greenspan.
He has been critical of the regulatory framework of the real estate and financial industries, the use of financial instruments like collateralized debt obligation, and the performance and conflict of interest of U.S. politicians and regulators.
Baker opposed the U.S. government bailout of Wall Street banks on the basis that the only people who stood to lose from their collapse were their shareholders and high-income CEOs. Regarding any hypothetical, negative effects of not extending the bailout, he explained, "We know how to keep the financial system operating even as banks go into bankruptcy and receivership," citing U.S. government action taken during the S&L crisis of the 1980s. He has ridiculed the U.S. elite for favoring it, asking, "How do you make a DC intellectual look less articulate than Sarah Palin being interviewed by Katie Couric? That's easy. You ask them how failure to pass the bailout will give us a Great Depression."
As a graduate student at the University of Michigan, Baker participated in and was arrested at two sit-ins protesting Representative Carl Pursell's votes for military aid to the Contras. In 1986, Baker defeated Donald Grimes in the Democratic primary and ran unsuccessfully against Pursell to represent Michigan's second Congressional district; his candidacy opposed aid to the Contras.
Baker is married to economist Helene Jorgensen. They live in Washington, DC.
Works and publications
- Selected articles
- Baker, Dean (1988). The Logic of Neo-Classical Consumption Theory(Thesis/dissertation). Ann Arbor, MI: University of Michigan. OCLC 68299542.
- Baker, Dean; Weisbrot, Mark (1999). Social Security: The Phony Crisis. Chicago, IL: Univ. of Chicago Press. ISBN 978-0-226-03544-4. OCLC 41090883.
- Bernstein, Jared; Baker, Dean (2003). The Benefits of Full Employment: When Markets Work for People. Washington, DC: Economic Policy Institute. ISBN 978-1-932-06604-3. OCLC 52467815.
- Baker, Dean (2006). The Conservative Nanny State How the Wealthy Use the Government to Stay Rich and Get Richer(Free e-book). Washington, DC: Center for Economic and Policy Research. ISBN 978-1-411-69395-1. OCLC 71423207.
- Baker, Dean (2007). The United States Since 1980. Cambridge, England: Cambridge University Press. doi:10.1017/CBO9780511510830. ISBN 978-0-511-27471-8. OCLC 252534980.
- Baker, Dean; Frank, Thomas (foreword by) (2009). Plunder and Blunder the Rise and Fall of the Bubble Economy. San Francisco, CA: Berrett-Koehler Publishers. ISBN 978-1-609-94478-0. OCLC 742517362.
- Baker, Dean (2011). False Profits Recovering from the Bubble Economy. San Francisco, CA: Berrett-Koehler Publishers. ISBN 978-1-609-94475-9. OCLC 740435886.
- Baker, Dean (2010). Taking Economics Seriously. Cambridge, MA: MIT Press. ISBN 978-0-262-01418-2. OCLC 939219451.
- Baker, Dean (2011). The End of Loser Liberalism: Making Markets Progressive(Free e-book). Washington, DC: Center for Economic and Policy Research. ISBN 978-0-615-53363-6. OCLC 765978209.
- Baker, Dean; Bernstein, Jared (2013). Getting Back to Full Employment: A Better Bargain for Working People(Free e-book). Washington, DC: Center for Economic and Policy Research. ISBN 978-0-615-91835-8. OCLC 866909924.
- Baker, Dean (2016). Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer(PDF). Washington, DC: Center for Economic and Policy Research. ISBN 978-0-692-79336-7. OCLC 961184821.
- ^"IDEAS/RePEc: Dean Baker". Research Papers in Economics (RePEc).
- ^ abBaker, Dean (1988). The Logic of Neo-Classical Consumption Theory(Thesis/dissertation). Ann Arbor, MI: University of Michigan. OCLC 68299542.
- ^Wachter, Paul (January 2010). "Bubble Buster: Dean Baker '80 [sic] saw it coming. But if anything, his gloomy forecasts now look conservative". Swarthmore College Bulletin.
- ^Bain, Ken (2012). What the Best College Students Do. Cambridge, MA: The Belknap Press of Harvard University Press. ISBN 978-0-674-06664-9. OCLC 821823403.
- ^"Curriculum Vitae 2014: Dean Baker"(PDF). United States House of Representatives. 2014.
- ^Baker, Dean; Weisbrot, Mark (December 1994). "The Logic of Contested Exchange". Journal of Economic Issues. 28 (4): 1091–1114. doi:10.1080/00213624.1994.11505613. JSTOR 4226888.
- ^K.S., Jomo; Weisbrot, Mark; James, Deborah (15 April 2011). "The Scorecard on Development, 1960-2010: Closing the Gap?"(Video). Center for Economic and Policy Research.
- ^Dean Baker, CEPR, 9 June 2003, Reflections on Economic Reporting: Seven Years of the Economic Reporting Review
- ^Wall Street Economists: A Research Project on Economic Predictions
- ^Baker, Dean (August 2002). "The Run-Up in Home Prices: Is it Real or Is it Another Bubble?". Center for Economic and Policy Research. Retrieved 2012-06-18.
- ^Reinhart, Carmen M.; Rogoff, Kenneth S. (2009). This Time is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press. p. 160 (see table 10.8). ISBN 978-0-691-14216-6.
- ^Robert Manne (May 2009). "The Rudd Essay & the Global Financial Crisis". The Monthly (45).
- ^Dirk J. Bezemer (2009-06-16). "'No One Saw This Coming': Understanding Financial Crisis Through Accounting Models"(PDF). MPRA Paper No. 15892. Ludwig Maximilian University of Munich. Archived from the original(PDF) on September 6, 2015. Retrieved June 16, 2012.
- ^David Smiley (October 8, 2009). "The Economy in Palliative Care". Progress Magazine.
- ^Baker, Dean (2006). Recession Looms for the U.S. Economy in 2007(PDF). CEPR. Retrieved 14 June 2012.
- ^Isidore, Chris (1 December 2008). "It's official: Recession since Dec. '07". CNNMoney.com. Retrieved 14 June 2012.
- ^Dean Baker (28 October 2013). "Alan Greenspan owes America an apology". theguardian.com. Retrieved 1 November 2013.
- ^Gwiazda, Nick (31 October 2013). "Financial Crisis: The Guardian's Dean Baker Is Wrong – Alan Greenspan Owes Nobody An Apology". ibtimes.com. Retrieved 1 November 2013.
- ^Baker, Dean (31 October 2013). "Yes, Alan Greenspan Owes Us a Really Big Apology". Beat the Press. Retrieved 1 November 2013.
- ^Dean Baker, The Housing Bubble and the Financial Crisis, Real-World Economic Review, Issue no. 46, 20 March 2008
- ^Beat The Press, March 9, 2008
- ^William Seidman, Who Led Cleanup of S&L Crisis, Dies, Bloomberg, May 13, 2009
- ^Huffington Post, September 30, 2008
- ^Earle, Rob (22 October 1986). "Baker, Pursell spar in face-to-face debate". The Michigan Daily. XCVII (35). pp. 1,5.
- ^Cockburn, Alexander (25 October 1986). "Beat the Devil: Dean Baker for Congress". The Nation. 245 (13): 399.
- ^"Opinion. August 2 primaries: Vote for progressive candidates". The Michigan Daily. XCVIII (11S). 29 July 1988. p. 4.
- ^Hong, Peter Y. (17 August 2009). "Some saw the housing bubble and sold; trick now is spotting the bottom". Los Angeles Times.
- Dean Baker presentation on 2008–2009 economic trouble at Bucknell University
- NPR's Fresh Air (Audio): "The Key to Economic Stimulus?", January 13, 2009
- Bill Moyers Journal (Video), August 8, 2008
- News Hour with Jim Lehrer (Video): "Massive Job Cuts Renew Calls for Quick Action on Stimulus", January 26, 2009
- C-SPAN's Book TV (Video): "Plunder and Blunder: The Rise and Fall of the Bubble Economy", January 27, 2009
- Marketplace Public Radio (Audio): We Demand to See More Transparency, March 9, 2009
- Scott, Jonathan (25 July 2009). "Dean Baker's war of position". Race & Class. 51 (1): 55–68. doi:10.1177/0306396809106163.
- Dean Baker: Banks Could Be Big Winners of President Obama’s Foreclosure Prevention Program – video by Democracy Now!
- Roberts, Russ (January 9, 2012). "Dean Baker on the Crisis". EconTalk. Library of Economics and Liberty.
- Video (and audio) of debates & discussions involving Baker on Bloggingheads.tv
- Dean Baker argues that the debate over the economy should not be over whether to regulate, but how in the Boston Review
We would usually expect that a 12-year-old kid would be taller than a 6-year-old kid. However, if a 12-year-old had only grown one inch over their last six years, we would probably be somewhat worried.
David Brooks devotes his most recent column, "the virtue of radical honesty" to presenting data from Steven Pinker's new book, Enlightenment Now, which purports to show that things are better than ever. Most of the data has the character of boasting over our 12-year-old's one inch of growth over the last six years.
Brooks tells us:
"For example, we’re all aware of the gloomy statistics around wage stagnation and income inequality, but Pinker contends that we should not be nostalgic for the economy of the 1950s, when jobs were plentiful and unions strong. A third of American children lived in poverty. Sixty percent of seniors had incomes below $1,000 a year. Only half the population had any savings in the bank at all.
"Between 1979 and 2014, meanwhile, the percentage of poor Americans dropped to 20 percent from 24 percent. The percentage of lower-middle-class Americans dropped to 17 from 24. The percentage of Americans who were upper middle class (earning $100,000 to $350,000) shot upward to 30 percent from 13 percent."
The problem with the Brooks–Pinker story is that we expect the economy/people to get richer through time. After all, technology and education improve. In the fifties, we didn't have the Internet, cell phones, and all sorts of other goodies. In fact, at the start of the fifties, we didn't even have the polio vaccine.
The question is not whether we are better off today than we were sixty years ago. It would be incredible if we were not better off. The question is by how much. In the fifties, wages and incomes for ordinary families were rising at a rate of close to two percent annually. In the last forty-five years, they have barely risen at all.
This fact can be seen even looking at the numbers that Brooks is bragging over. While it's not clear where they got their poverty data, the child poverty rate comes closest to the numbers in the article. This was at 22.3 percent in 1983. It was down to 21.1 percent in 2014 and fell further to 18.0 percent in 2016.
Should we celebrate this reduction in poverty rates over the last 33 years? Well, the poverty rate had fallen from 27.3 percent in 1959 (the first year for this data series) to 14.0 percent in 1969. That's a drop of 13.3 percentage points in just ten years. The net direction in the last 47 years has been upward.
It's true that a larger share of the population is earning over $100,000 a year. This is due to some growth in hourly wages, but also due to more work per family. A much larger share of women are working today than fifty years ago and a larger share of the women working are working full-time. If family income had continued growing at its pace from 1967 to 1973 (the last years of the Golden Age), median family income would be almost $150,000 today.
There are a whole a range of other measures which leave real enlightenment-types appalled by the state of the country today. While Brooks–Pinker tell us "only half the population had any savings at all" in the 1950s, a recent survey found that 63 percent of the country could not afford an unexpected bill of $500. The homeownership rate is roughly the same as it was sixty years ago. Life expectancy for those in the bottom 40 percent of the income distribution has barely budged in the last forty years.
In short, a serious analysis of data shows that most people have good grounds for complaints about their situation today since they have not shared to any significant extent in the economic growth of the last four decades. But apparently, there is a big market for the sort of dog and pony show that Brooks and Pinker present trying to argue the opposite.Add a comment