Why NASA Hired a Chief Economist

SPEAKER_2 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:24)

Joe, have you ever met anyone at a party and you start, you know, you ask them the standard question, what it is that they actually do, and you just get a response that kind of blows your mind. It's something that you've never even thought of before.

Joe Weisenthal (0:38)

First of all, can I say, my favorite question at parties is, what do you do? I've heard that that's like-

Tracy Alloway (0:43)

I know, some people look down on it, but I find it fascinating.

Joe Weisenthal (0:46)

Ask me about my hopes and dreams. I don't care. I don't care. I don't care. I want to know what you do. No, I do. Like, oh, where do you live? Whatever. I want to know what you do. I mean, look, in some instances, maybe people don't want to talk about it, but I figure people devote a big chunk of their lives to work. That's a pretty good icebreaker. So we need to renormalize that.

Tracy Alloway (1:05)

Absolutely.

Joe Weisenthal (1:06)

And as podcast hosts, we're always looking for interesting people.

Tracy Alloway (1:09)

That's right. And sometimes you meet them at parties. This person that we're going to be speaking to, we actually met at our party, our 10-year anniversary party. Someone else brought them, and I was introduced to him, and I said, what is it that you actually do? And the answer that came back was, I was NASA's first chief economist.

Joe Weisenthal (1:30)

Amazing. Sold.

Tracy Alloway (1:31)

Have you ever heard of that before?

Joe Weisenthal (1:32)

I would have not. I mean, no, I definitely would have never heard of that before. I mean, I guess I'm not surprised in some sense. I'll say the one sense that I'm not surprised that NASA had a chief economist, which is like economists seem to sort of be in every organization these days. They have a lot of tools in their toolkit that can be applied to a lot of things. They're pretty good with statistical analysis, et cetera.

Tracy Alloway (1:55)

But then also, you know, but this is stats in space.

Joe Weisenthal (1:58)

Well, then the other thing is, you know, I know that there's growing interest in the commercial applications in space. And so satellites are another are one area, obviously defense. People talk about asteroid mining. I don't know if we'll ever see that in our lifetimes, but I know that that's the thing people are interested in. So although I would not have necessarily thought it, you know, I guess I'm not totally surprised that NASA is like, all right, let's bring in an economist in.

Tracy Alloway (2:22)

Well, I was pretty surprised. I guess I'd never thought about it in detail before. But it turns out that not only does this role exist, but it sits at the sort of intersection of, I guess, a lot of public and private investment in space exploration. And we've talked about this before, this idea that NASA has perhaps been ceding a lot of territory in many ways to private capital, SpaceX especially. We've done tons of industrial policy episodes at this point and what the benefits are of government investment versus, again, private capital. And so I'm very excited to talk space economics. But truly the perfect guest, we're going to be speaking with Alex MacDonald. He served as NASA's first chief economist, as I said, and he is now a senior associate at the Aerospace Security Project at CSIS, the Center for Strategic and International Studies. Alex, thank you so much for coming on Odd Lots.

Alexander MacDonald (3:16)

Thank you so much. It's a pleasure to be here.

Joe Weisenthal (3:17)

Thanks for coming to our party, too.

Tracy Alloway (3:19)

Yeah, that, too.

Alexander MacDonald (3:19)

Well, good party. I enjoyed it.

Joe Weisenthal (3:21)

Thank you.

Tracy Alloway (3:21)

Excellent. So, obvious question first, I suppose. What does a chief economist at NASA actually do?

Alexander MacDonald (3:28)

So, the position of chief economist is essentially one of the three independent technical advisors to the administrator. I'll point out that all three of those positions were basically canceled at the beginning of this Trump administration, but they had been essentially people who would be brought into the agency to advise the administrator on technical issues related to economics, chief economist, technology, chief technologist, and science, chief scientist. These are not positions that are responsible for implementing programs. They are essentially independent technical advisors to the head of NASA. NASA is a $25 billion agency. It has 10 different centers across the US. It has international partnerships. And of course, it has an extensive amount of contract for the private sector. And so the role of the chief economist is essentially to advise the administrator of NASA on whatever the administrator of NASA needs advice on, but it tends to be related to what are the markets that we're seeing? What level of investment can we expect in a given sector? Has this company actually raised money or are they perhaps maybe misrepresented? These are all questions that come up in procurement and in strategy. I started at NASA in 2008, so that was when the space shuttle was still flying. We were beginning to think about partnering with the private sector. SpaceX had received its first essentially contract from NASA, but it had not launched anything to space yet. So as you can imagine, over the last 15 plus years, the role of the private sector has become very significant within NASA's portfolio. And as a result, economic analysis became one of the types of internal services that essentially the senior leadership at NASA decided they needed.