Photo Credit: larspsyll
In this interview, Dr. Mark Thoma discusses his dislike for the 8 – 5 lifestyle, his lifelong love of math, the importance of economic history and why he’d like to have dinner with Milton Friedman, John Maynard Keynes and Adam Smith, among other topics.
For the second installment of the INOMICS series Experts Talk, we interviewed Dr. Mark Thoma, who teaches macro and time-series economics at the University of Oregon. Dr. Thoma also maintains the very popular fiscal policy blog Economist’s View (which is also hosted on the EconoMonitor), is a columnist for the Fiscal Times and has previously been a contributor to dozens of top publications including Forbes, The Economist and The New York Times.
- After earning your BA in economics and statistics you went directly on to earn your PhD in economics as well. What made you interested in the field initially and what motivated you to pursue an academic career as an economist?
When I was in high school, the inflation problems of the 1970s were beginning. I remember asking my parents what caused inflation, and their answer was that they didn’t know. The inflation problems, the gas lines at service stations, and so on heightened my interest in these issues, and probably helped to lead me into monetary economics, one of my specialties.
But there were other factors as well. When I took Economics 1, the instructor wrote on my final “you should major in economics” and that encouragement made a big difference. The course itself used a text called “The Economics of Social Issues” and I really liked the way economics gave us insight into those types of problems. I was good at math, so it seemed easy to me, and that helped too.
I had worked in tractor stores in the small farming town I grew up in while in high school, and also in college, and I really didn’t like the 8-5 workday routine. It just didn’t suit me. The freedom that academics offered was much more attractive and that was a major reason I decided to pursue a Ph.D. My plan was to teach somewhere, take summers off, etc. and have lots of free time, but once I got to graduate school I realized I liked the research side of the discipline quite a bit. So, instead of having lots of leisure as I initially planned, I ended up in the “publish or perish” world where free time was a luxury. But I’m glad I pursued that route, and that I could teach Ph.D. courses. During graduate school I decided that I didn’t want to go to a place where there were only undergraduates, and you teach the same few courses again and again throughout your career. Teaching graduate courses allows you to continue to grow, to use math in all its glory to illustrate concepts, and so on.
- How has your perspective as an economist changed over the years in light of socio-political shifts in the United States?
I embraced the economics is science view for many years, and believed that the profession as a whole embraced the idea that ideology had no place in the advancement of economics. However, in recent years as I’ve watched the reaction to rising inequality, issues involving social insurance, taxes, etc. I have become much more sympathetic to the idea that important elements and people within the profession are highly ideological.
- In a piece for the Fiscal Times, you state that alongside Thomas Piketty’s argument that capitalism breeds inequality, you’d argue that politics and policy have a large impact on the distribution of wealth as well. Are there major points on which your views diverge from Piketty’s?
I am much more sympathetic to arguments that inequality arises from market failures that lead to a “mal-distribution” of income than Piketty. For example, when a firm has monopoly power, it affects how income is distributed – it no longer satisfies the idea that each individual should be entitled to the fruits of his or her own contribution to the production of goods and services that are valued in the marketplace.
As for politics and policy, I believe that the accumulation of wealth arising from the mal-distribution of income has allowed the political process, and hence the rules, laws, and regulations that come from it, have been largely captured by those with the most economic power. Economic power leads to political power, and that tilts the scale in favor of those at the top of the income/wealth distribution. Piketty has similar worries, but as I noted above I believe I am more sympathetic to the idea that the concentration of wealth is due to market failures than he is.
- Do you think there will be a noticeable shift in the way economics is taught in light of the global recession and the notoriety of work like Piketty’s?
I believe that there will be a shift in emphasis that brings theoretical issues about the distribution of income to the forefront (For example, is Piketty’s formula r-g that determines the distribution of income valid always and everywhere, and if not, what are the exceptions and how important are they? How is the formula derived?) But the tools and techniques known collectively as dynamic stochastic general equilibrium (DSGE) models will not change anytime soon. The tools will be applied to different questions, for example the connections between financial intermediation and real economic activity are being explored much more in depth than prior to the crisis, but the tools themselves will not change. It remains to be seen if DSGE modes are up to the task, and if not something will replace them, but for now the tools and techniques of DSGE models will be the primary mode of analysis.
One more thing. It would be nice if economic history was emphasized more as a result of the Great Recession, but the amount that students have to learn to be competent at DSGE modeling, microeconomic models that provide the foundation of modern macro, econometric tests of those models, and all the math that goes along with it leave little room for economic history. The lack of knowledge about economic history was costly in the most recent economic crisis, and it will probably be similarly costly when the next one comes along, as it surely will.
- What inspired you to start your blog?
I was disappointed in the way economic issues were being reported in the run-up to Bush’s reelection, particularly the often heard claim that tax cuts pay for themselves, and the reporting on social security privatization. My first reaction was to write several letters to the editor in the local paper, then three op-eds on economic issues, and one day in March of 2005 I started a blog on a whim (I had come across economics blogs in doing research for my first op-ed on social security). I didn’t expect it to ever be much more than a place to state my views, I hosted the pictures on a desktop server that could only handle ten connections at once, but somehow it caught on thanks in large part to Brad DeLong and Paul Krugman.
- You not only run a very well respected econ blog, you also contribute to The Fiscal Times and write guest pieces for many other top sites. How has blogging impacted your professional and/or personal life?
It takes quite a bit of time each day to run the blog. I didn’t start it until my kids were all in college or beyond so I had lots of free time to do it and it didn’t impact my time with them. But it has crowded out some of the recreational things I did before it started, and it has made it much more difficult to conduct academic research. For that reason, I would not recommend it to graduate students, or professors still struggling with the tenure and promotion process. Some people can handle it, but for many it crowds out too much of the work that gets rewarded in academia.
- You’ve been a professor since 1985. What is one piece of key advice you give to students interested in pursuing a career in economics?
Take all of the math that you can. Very few graduate students fail because they don’t understand the economics, it’s the technical requirements that are the stumbling blocks.
- What is your favorite course to teach? Has this changed over the years?
When I was younger, my favorite course to teach was time-series econometrics. But as time has passed, I’ve come to like monetary theory and policy much more (at both the graduate and undergraduate levels). I like both the theory and the fact that it allows us to use the tools and techniques of monetary theory to examine important policy questions. In recent years, due to the financial crisis it has been really fun to teach, and students are very interested in understanding the Great Recession.
- If you could start over and pursue an entirely different career, would you do it? What would it be?
It would be something involving math. I have always been really interested in physics, but I think I would end up in electrical engineering (which shares a lot of technical material with macroeconomics and time-series econometrics). I took a graduate level electrical engineering course on stochastic processes during my time as a graduate student, and really liked the material.
- If you had the chance to have dinner with three economists, living or dead, who would they be and why?
Tough question. I would like to hear a debate between Milton Friedman and John Maynard Keynes on the role of monetary and fiscal policy in responding to recessions. I would also like a chance to ask Keynes how well modern version of Keynesian economics accord with his views. An historical figure such as Adam Smith, David Ricardo, Thomas Malthus, John Stuart Mill, Karl Marx, John Bates Clark, etc. would be an attractive third. It would be great to have Adam Smith, for example, participate in the debate between Friedman and Keynes over how and when the government should intervene to stabilize the economy or correct market failures. But I would also be tempted choose Paul Krugman. It would be a chance to thank him – as I’ve done in person with Brad DeLong already – for all he has done to make my blog so popular.
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