Baker was a lecturer at the
University of Michigan from 1988 to 1989 and an assistant professor of economics at
Bucknell University from 1989 to 1992. From 1992 to 1998, he 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 and Weisbrot co-founded the
Center for Economic and Policy Research (CEPR), a US independent, nonpartisan
think tank that produces economic research on US national affairs (social security, healthcare, the US national budget), and international topics (the global economy, the
International Monetary Fund or Latin America policy). In that same year Baker was a senior research fellow at the Preamble Center for Public Policy. Baker has consulted with officials from the
World Bank and 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 on the economic reporting of
The New York Times and
The Washington Post, the
Economic Reporting Review. Since 2006, he has continued this commentary on his blog
Beat The Press, formerly published at
The American Prospect and now on CEPR's website.
2007–08 United States housing bubble In 2006 Baker predicted that "plunging housing investment will likely push the economy into recession." That year he published "Recession Looms for the U.S. Economy in 2007", in which he predicted that weakness in the US housing market was likely in 2007 to push the US economy into a recession. 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 housing 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 bubble's collapse 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 Federal Reserve chair
Alan Greenspan. He has also been critical of the regulatory framework of the real estate and financial industries, the use of financial instruments like
collateralized debt obligation, and U.S. politicians and regulators' performance and conflicts of interest. 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. Of any hypothetical negative effects of not extending the bailout, he said, "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."
Rigged Baker's 2016 book
Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer argues that changing how the U.S. economy has been managed over the past 50 years would add between $2 and 3.7 trillion (in constant 2016 dollars) to the U.S. GDP, between 11 and 20 percent. This is summarized in his Table 8-1: In
Rigged, Baker argues that, for example, focusing more on decreasing unemployment and less on minimizing inflation would primarily benefit the bottom 99%, though the top 1% would get some of those gains. Similarly, Baker says that changes in patent and copyright law over the past 50 years have violated their purpose under the
Copyright Clause of the Constitution: "To promote the progress of science and the useful arts". He concludes that if the U.S. had spent the same amount on research and media with the results being placed in the public domain, everyone would be better off, with the possible exception of the ultra-wealthy. In particular, the world would be healthier not having to pay patent royalties to U.S. pharmaceutical companies. He also writes that so-called free-trade agreements have exempted doctors and other highly paid professionals, not because of any intrinsic difference in what they do, but because they have more political power than organized labor. == Political activism ==