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, an independent, nonpartisan think tank, which produces economic research on topics that affect people's lives to contribute to the public debate, and internationally. 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 The 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."
Personal life
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 Carl 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.
