The Interview: Jeff Miron, Economist and Harvard Professor

The Harvard financial wiz hates taxes, loves golf, and tackles the question that should be on everybody’s mind: Is our economy heading over a cliff?

Photo courtesy of Jeff Miron

If you’ve been grinning like a possum for the past year every time you check your financial portfolio, a quick conversation with Jeff Miron will likely wipe that smile off your face. The director of undergraduate studies in Harvard’s economics department and an outspoken libertarian, he’s spent most of his career analyzing the economy, and right now he doesn’t like what he sees: a fiscal imbalance that hovers around $120 trillion, an unusually long stretch of uninterrupted growth, and a flighty president with a penchant for tweeting. On a rainy Tuesday, the 61-year-old sat down with me in his Cambridge third-floor office to unpack his controversial views on everything from why tax avoidance is a patriotic duty to whether we’re on the brink of another financial collapse.

In the past few weeks we’ve seen the stock market hit record highs and also seen the Dow take its biggest single-day loss ever. Are you surprised by this volatility?

It doesn’t surprise me that there is volatility. Markets have had volatility forever. The surprising part was that there was this period over the last year and a half—and even going back farther—when there wasn’t volatility. We just seemed to keep getting gains and gains and gains.

So do you think we have set ourselves up for another economic crisis?

All previous booms have ended, so this one is probably going to end as well. And this one is pretty long compared to the typical length of an expansion. Except that we didn’t grow really quickly coming out of the trough of the previous recession in 2009. So if you compare where we are to where history would have projected us to be, we’re still below that. Maybe that means we haven’t hit capacity and haven’t run up against the usual bottlenecks that cause booms to sow the seeds of their own destruction. Maybe we have another year or two or three, but it would be crazy to think that we have another five or 10, because that would be pretty far outside historical experience. So people should be cautious—they should save, they should diversify, and they should recognize that things that go up could come down.

If there is a downturn, do you sense that it will be more severe than what we saw in 2008?

It’s so hard to predict. The standard joke is that it’s hard to make predictions, especially about the future. And, until pretty close to 2008, very few people were predicting a recession, very few people were predicting the housing bust, very few people were really focusing on the amount of borrowing that had built up in the economy. If we were somewhat blind then, it’s entirely possible that we’re being equally blind now.

You frequently write about the dangers of the U.S. fiscal imbalance. Does it worry you that the White House passed a tax bill that’s expected to increase the deficit by more than a trillion bucks?

The first thing about the fiscal imbalance is that it’s humongous. It is way, way, way bigger than the estimated $1.5 trillion increase in the deficit from the new tax plan. So, if our current fiscal imbalance is around $120 trillion and the tax cut adds $1.5 trillion, you can almost say it’s irrelevant. We’re going over a cliff. Whether we’re going over the cliff at 100 miles an hour or 102 miles an hour is not the crucial detail.

As an economist, do you find it scary that a tweet from President Donald Trump could send the markets spinning?

I think lots of people, economists and others, are concerned that the administration seems to exude a certain kind of volatility or uncertainty or unusual behavior, and we tend to think that that will be bad for economic activity.

Speaking of Twitter, you once tweeted, “Tax avoidance is a patriotic duty; it calls attention to the idiocy of the U.S. tax code.” So…have you filed your taxes yet?

[Laughs.] No, I haven’t filed for this year. I don’t think I even have all the forms. I’m waiting for my wife’s W-2 before I start.

How serious were you being in that tweet, though?

Well, the part about it being a patriotic duty, that was more tongue-in-cheek. But the idea that we could have a much, much more simple tax code if we had smaller government and trusted the private sector to do more things, that part is perfectly sincere.

How is life as a libertarian at Harvard?

I get asked that question all the time. Not a single person here has ever given me grief about being a libertarian. Libertarians often agree with liberals, which there are a lot of on campus. There’s no debate about that. Most of the faculty thinks being liberal is a virtue. They’re not apologizing for it, nor should they. But my views are strongly in favor of open borders on immigration, I’m strongly in support of gay marriage, I’m in favor of drug legalization, I’m strongly pro-choice, and I’m against foreign policy interventions around the world, like the Iraq invasion. So, on all those issues, the liberals on campus agree with me. I actually out-liberal a few of them. Then on economics, of course, I disagree with many of my colleagues, but I think non-economists are willing to concede that economists should be at least allowed to express their views on economic issues. I try to do it calmly and politely, and no one has ever been unhappy with me to my knowledge.

How about life as a libertarian in Massachusetts? Is it a dystopian world of red tape, taxes, and progressives gone mad?

We’re a fairly liberal state. But we are not “Taxachusetts” to the degree that many people think. Our taxes are kind of above the median, but not by much. There are certainly things I notice that seem silly to me, like banning plastic bags in grocery stores. But one thing that libertarians do that is perhaps a little unfortunate is act as though every single government policy that we oppose is the end of the world. Compared to almost the entire world throughout almost all of history, Americans have religious liberty, they have the freedom to marry, they have choices of where to live, and they have choices of occupations. It’s pretty good by libertarian standards, even though there are things we would like to be better.

You’ve been at Harvard for nearly 15 years. With Gary Johnson and Bill Weld on the ticket in the last presidential election and Trump hijacking the Republican Party, does it seem like you’re seeing more students interested in libertarianism now than when you started?

Libertarians have been hoping that they’ve been having their moment for a good 50 years, and it’s never been true so far. I have seen significant interest in being libertarian from students ever since I’ve been here. I don’t perceive it as particularly getting stronger or weaker. Certainly, during the last election with Gary Johnson running, there was somewhat heightened interest in all things political, and Gary is appealing to young people. But I don’t see any particular trend. Students’ political views are mainly a reflection of their parents’ political views, so it’s a cross section. We’ve got conservatives, we’ve got libertarians, we’ve got liberals, and we have various other flavors.

After leaving a tenured position at the University of Michigan, you left a tenured position at Boston University for a non-tenured role at Harvard. What is your view on tenure—is it a valuable safety net or is it an anachronism that needs to go?

I think it’s actually neither of those two things. I don’t think it ends up serving as a mechanism to incentivize people to take risks, to take on new topics, to be more courageous in their intellectual interests or their political views or anything like that. I saw a research paper recently that found professors’ research became more cautious after tenure. But I don’t think it is a completely archaic thing that just makes professors lazy. I think tenure is a form of job security that people who want to become academics tend to value, and they’re willing to accept lower pay in exchange for that job security. So, it’s not a good analysis to ask if we should get rid of tenure. The right analysis is: What would happen if we told academics that they’re not getting tenure, but they are going to get paid enough to make them accept the risk of getting fired?

As the director of the undergraduate economics department at the most prestigious university in the country, do you see all your students run off to Wall Street the day after graduation?

A good fraction is going to Wall Street. I don’t remember the exact figure, but I think from the exit surveys it’s in the ballpark of 40 to 50 percent of economic students are going into some sort of Wall Street or finance job. A significant fraction is going into consulting. There are students who go directly to law school, but a large number of others work for a year or two or three and then go to law school. Some go to grad school for economics, but that’s a very small percentage. And then there are miscellaneous people who work for NGOs. But yes, Wall Street, which can be interpreted broadly—it’s not all in New York—and consulting are certainly very popular choices.

Does that bother you?

No. It’s not my business. It’s their choice. They have plenty of information and know what their friends and their brothers and sisters and their parents are doing. On the whole, they’re probably making decisions that are good decisions for them. Of course, some of them make mistakes, but half the people that go to grad school for economics are also making mistakes. Some fraction of the students that go to grad school or into any occupation is making a mistake.

What’s your guilty pleasure?

I don’t know if I feel guilty about it, but it’s golf. I’m a total golf nut. And I love Breaking Bad.


Breaking Bad is the best TV show ever made, because it’s the best TV show about having a midlife crisis. And that’s the key. It’s not about the drug trade. It’s about having a midlife crisis. And I happened to watch it when I was more or less in that range, and it just really spoke to me.

What advice would you give to someone going through a midlife crisis other than, perhaps, starting a meth empire?

Take up golf. When you’re thinking about your golf swing, you can’t think about anything else. It’s a fascinating activity because it’s impossible to ever do it well. Some days you can not suck, but you can never actually do it well.

What’s one book everyone should read?

Trevor Noah’s Born a Crime. It’s brilliant. Actually, what people should do is listen to it, because Noah reads it, and he speaks six or seven different languages, and he can speak in the appropriate accents. It’s both very funny and really interesting to hear about the history of apartheid and his transition from growing up fairly poor with a black mother and a white father, which is why he was born a crime.

Let’s talk about drugs momentarily. Is it accurate to say that you believe heroin should be legalized?

I think all of the currently illegal drugs should be legal. I don’t expect us to legalize heroin in the near future, but I think the best policy would be if it were fully legal.

That’s a pretty loaded viewpoint given that so many people are dying because of opioids. Is there an emotional element that you consider when forming this viewpoint or do you just look at this issue purely through a lens of economics?

I think I’m saying it based on economics—what are the net costs and benefits? And my argument is essentially that heroin and many substances are much more dangerous when they’re illegal than when they’re legal. It’s not to say they can’t be dangerous when they’re legal. Obviously, alcohol can be dangerous, guns are legal and can be dangerous, cars are legal and can be dangerous, chainsaws are legal and can be dangerous. But when you make something like heroin illegal and quality control goes down, people don’t know what they’re consuming, so accidental overdoses from overly pure versions of the drug go up. And people consume the drugs in less safe methods—in the case of heroin, that could mean sharing needles, which can spread HIV and hepatitis. Lots of people would be very receptive of this view if we were talking about only alcohol because they’ve read about the failure of alcohol prohibition. My claim is exactly the same reasoning, and the same sorts of effects apply for any of the legal drugs.

It seems like a controversial stance for a Harvard professor to take. Do you get a lot of pushback?

Of course, but in some ways not enough, or not as much as I like, because pro-legalization and anti-legalization camps tend to not talk to each other much. There are not very many debates or panels that have people from both sides trying to hash this out. So the two groups are kind of preaching to their own little choirs, and that’s not particularly useful. But to your question, yes, many people think that my view is crazy. I try to explain it when I get the chance, and then a few people say, “Hmm, it’s not quite as crazy as it sounds at first.”

There’s a growing tension between states like Massachusetts, which legalized marijuana, and Attorney General Jeff Sessions. How do you see this playing out?

I certainly am supportive of the state legalization efforts in Massachusetts and in the seven or eight other states that have legalized it. But I’ve always been nervous when the state decriminalizes it or medicalizes it because I keep saying, “The federal government can undo this basically with the stroke of a pen.” And Jeff Sessions is proof I am not completely crazy to be worried about that. It’s also very frustrating that Sessions sort of has a defensible position, which is these anti-marijuana laws are on the books and it is his job as attorney general to enforce the federal law. Now that’s not totally decisive or persuasive because, of course, you have to choose how much to enforce any given law. He has billions of laws he could enforce. But he’s pointing to something that is problematic, which is this great, gross inconsistency between the federal and the state laws. The only way we really get what I think of and what libertarians think of as a sensible drug policy is if you repeal the federal law and then let states do whatever they want.

Do you think you’ll live to see the repeal of federal drug laws in the U.S.?

I think maybe the marijuana laws. I’m not placing any bets on legal heroin.