Women in Economics: Veronique de Rugy

This 27-minute podcast was released Nov. 18, 2020.

“Don’t be shy about giving an opinion,” says Veronique de Rugy, senior research fellow at the Mercatus Center at George Mason University, and syndicated columnist. She talks with Mary Suiter, assistant vice president and economic education officer at the Federal Reserve Bank of St. Louis, about her research on the federal budget, taxation, tax competition and financial privacy, and using data visualization to educate the public.

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Transcript:

Mary Suiter: Hello, I’m Mary Suiter and you’re listening to the Women in Economics Podcast Series from the Federal Reserve Bank of St. Louis. Today I’m speaking with Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist. Thank you for joining us today.

Veronique de Rugy: Thank you for having me.

Suiter: So, your primary research interests at the Mercatus Center include the U.S. economy, the federal budget, taxation, tax competition and financial privacy. How did you develop an interest in these areas?

Rugy: So, I’m a generalist and it’s pretty much whatever interests me at the moment. And over time, what happens is that I get not necessarily tired of an issue but there’s something that suddenly, you know, just interests me more because its more in the news and it’s something I just don’t necessarily know and I want to learn more. And so, I have switched topics a lot in my career and I never fully drop anything because it stays with you and these are always recurring issues. So, this is why I have kind of a wide range of issues that I cover.

But I started with tax issues and I remember, especially tax competition issues because I thought it was just quite interesting based on what was happening at the time with the EU proposing the automatic exchange of information initiative. And so, I got interested in this and the more I was looking into taxes, the more I realized, for instance, when it came to the U.S. that kind of the talking point about just lower taxes are important from the republicans and the conservative free market side, it wasn’t actually really a good answer. Because really like Milton Friedman has said, when you want to measure the size of government you have to look at spending. So then, I started looking into spending issues and so on and so forth.

Suiter: Well, they’re all very important topics, certainly and topics that are sometimes difficult for people to get their heads around. So, when you speak or write about these topics, what are the essential economic ideas or understandings you try to convey?

Rugy: The first thing is, I try to actually get a grasp myself. Ask what the most important concepts are and then I basically try, always, to highlight the fact that prices matter. We all make trade-offs with every policy there’s going to be trade-offs. There will also be unintended consequences and because I operate a lot in the world of public policies, I try to stress the public choice aspect of things and kind of have what James Buchanan used to say, see politics without romance.

Suiter: I think the issues of trade-offs and unintended consequences are just so important. And so, having you figure out a way to emphasize those and the issues that you cover I think is really valuable for anyone who’s following economic topics.

Rugy: And it won’t surprise you but in the world of policy where a lot of people plant their flags, I mean it’s not necessarily an intellectual debater or a debate among academics who are interested in kind of exchanging ideas. It’s important because, for instance, you take the issue of a federal paid leave system, right? You’re having these conversations and a lot of the time they take place in a vacuum where one side exclusively highlights the benefit of such a program. And then, in this particular case, like many others, you know, it’s worth saying that while we may value those benefits tremendously there are costs and trade-offs that will exist. This notion of trade-off is not exclusive only to federally-provided paid leave, it’s also true in the private sector. But people tend to kind of have a one-sided vision of things so, I think it’s an important issue and it’s an important point to highlight.

Suiter: Yes, I agree, thank you. So, let’s back up a little and talk about your education. You received an MA in economics from Paris Dauphine University and a Ph.D. in economics from Pantheon-Sorbonne University. How did you choose economics?

Rugy: You’re going to be so underwhelmed. The American system is very different from the French system. So, when I went to high school there were different categories to choose and one was economics and I didn’t pick that. I went with the math and physics type of degree. I mean, this is not super advanced, it’s all high school degrees. And I once again, want to come out of high school, basically from the beginning you have to actually pick not just the major, it’s actually you have to pick an area. So, people go either straight to law school or straight to start preparing for medical school, it’s a contest in France. Or then, you pick economics and I kind of like picked economics because that’s the one I disliked the least of all of my options basically. I really liked biology but I didn’t see myself studying biology my whole life. And every branch is really actually quite specialized. I mean, my first year of economics it was just like price theory, math, history of thought. So, the liberal art tradition just doesn’t exist in France really.

Suiter: Okay. So, it was the least—

Rugy: Yes, the most stomach-able option. I told you, you would be underwhelmed.

Suiter: I think that’s great. Could you talk a little bit about your career in economics? Obviously, you decided to move to the U.S., what was the most difficult thing about that transition to living here?

Rugy: At first, I taught economics, microeconomics for five years in France while I was doing my Ph.D. I thought the French were just not intellectually stimulating plus politically I just didn’t have a lot of affinity with a lot of my fellow students and intellectuals. But moving what I actually did not realize is I really moved thinking this is going to be a great opportunity, it’s going to be really intellectually stimulating, it’s going to be all sorts of really great things. I didn’t actually kind of realize that the cultural aspect and differences between France and the U.S. would actually be the hardest thing for me to adjust to. And it surprised me because I think I had idealized one aspect of America and I hadn’t actually quite thought about the whole package in the same way as I had vilified all of France and kind of felt very separated from other French people. When in fact, when you transplanted me somewhere else, I realized that actually I was quite French culturally. And I really left, I left a great life. I lived in Paris, I had a lot of friends, I mean, it was a good life and I just ended in a group home in Fairfax, Va., 20 years ago. And you know, it was a shock, it was a real shock.

Suiter: You had to be asking yourself why.

Rugy: Well, yeah, I remember walking, the first week I was there, walking in the street of Fairfax which did not resemble the street of Paris and thinking, “What have you done?”

Suiter: Well, you’ve stayed so I’m going to think that there are some things you’ve decided you enjoy about it.

Rugy: Oh, I mean, I love the U.S. I mean, yeah, I like the U.S. I always say, you know, that this was my home but it is my home in a lot of ways. But when I’m in France I kind of feel that I’m very different and when I’m here there’s always a little part of me that I’m slightly different. And it’s not a bad thing, I mean—

Suiter: We’re glad that you decided to stay, so thank you for that.

Rugy: Yeah, thanks for having me.

Suiter: So, you’ve worked at the Atlas Economic Research Foundation, the Cato Institute, American Enterprise Institute and now the Mercatus Center. In that time, working in these different locations how have you and how has your work evolved?

Rugy: Oh my God. It’s amazing that I even had a job at the beginning because now that I look back, you know, I could really barely write in English when I joined the Cato Institute. The other thing is I was a raging ideolog but I actually didn’t have real, I mean, honestly, objectively a lot of kind of smarts to show for. And I have evolved by becoming a really much, much better scholar over time thanks to a lot of my colleagues, a lot of conversations that I’ve had. You know, when I was at Cato, I was in a more comfortable environment in terms of ideology but still, at Cato, important scholars were really challenging me. Like I think about Peter Van Doren who’s the editor of Regulation magazine. And when I went to AEI, I mean I was not in my environment, right? So, I had to really actually really learn to be a better scholar, it wasn’t just about being an ideal and a warrior for freedom and that was just really good for me. And I am still learning and so, it’s been a long waiting process and that, of course, is compounded by the fact that because I’m such a generalist and I change topics all the time, I always put myself in situations where I have to learn a lot.

Suiter: So, it certainly keeps you well informed and on your toes.

Rugy: Yeah and scared all the time to be honest. it’s like there’s always a little part of me that thinks, “What is it that you don’t know that you don’t know that you don’t know?” I’ve made mistakes like everyone and I’ve learned from them, and I’m much less reckless then I used to be, that’s for sure. certainly, I moved to the US because I wanted to be intellectually stimulating. Well, I think my career was really stimulating.

Suiter: So, I want to talk a little more about the public policy work. I meet a lot of young women and they are interested in public policy. Often, they want to be political scientists, I encourage them to go into economics. So, having this career where you’ve worked at these research foundations and policy institutes, what kind of courses would you encourage these young women to take? What kind of connections should they make? What kind of valuable career experiences should they seek out so that they can have these positions where they’re influencing or at least talking about and talking with people who influence policy?

Rugy: I think kind of the first advice I would give to anyone who’s going to be doing this job is, just be nice, be open to criticism. Be open minded about others and also, just try to accumulate knowledge, beyond your area of interest. Economists tend to often be a little deficient when it comes to knowing history well and history of thought, not all of them, of course. But, like the hyper specialization of economics and the process, I think something of like the liberal art tradition has been lost. And I think kind of reaching out to professors, outside of your area of expertise I think is important. Having a kind of interdisciplinary approach to what you do and trying to figure out what other disciplines are saying about an area that you’re studying is important. A model economist on this I’d say is Bryan Caplan at GMU. Where he seems to be actually incredibly rigorous about whatever book he researches, to kind of like look at what other people in other disciplines are saying.

Suiter: So, having an interdisciplinary approach and certainly a course at least in economic thought, the history of economic thought, those would be valuable experiences for these young women, as well as the great advice you gave about listening to other people and accepting feedback.

Rugy: And also, ask questions, never be embarrassed to ask questions. So, as I said, I’m a generalist, it means I have a very broad knowledge but in some areas it’s not as deep as the experts in that field. Well, it’s okay as long as you go ask those experts what you’re doing wrong and you go ask them for questions. You will never look like an idiot for asking questions. You will look like an idiot if you publish something that is blatantly wrong and you haven’t actually done your homework or asked people who know.

Suiter: In looking at your work on the Mercatus Center’s site, I noticed that you produced a number of their data visualization posts on the website. And that data visualization data, because we’re the home of FRED, is near and dear to us at the St. Louis Fed.

Rugy: Yes.

Suiter: So, I wondered if you could talk a little bit about why you think data visualization is valuable in educating the public.

Rugy: I mean, again, I believe in multiple pronged approach to knowledge. Data and data visualization is a very important tool because it’s a way to tell a story that maybe the same one you were telling in writing and in words but from kind of different angles. And sometimes you’re talking to people who will respond better to a chart then they would to a paragraph. But also, I actually think that one of the really clear advantages that data visualization has is it allows you to put things in perspective in a way that is just really striking. In a simple chart you can actually tell your audience just a lot of things about a topic and people respond really well to it if it’s well done. I love FRED and I mean, obviously we all use it a lot.

Suiter: What should we tell the public to look for so they’re able to interpret and evaluate the data that’s being displayed? So that they aren’t being, perhaps, mislead or misinformed by the way data are being presented to them?

Rugy: There’s a lot of subjectivity in the way your present data. this notion that data is just super, uber objective, I think it’s questionable. I think kind of, again, putting things in perspective, so, I’ll give you an example. A lot of the policy debate, let’s say, about the export/import bank, an issue that I’ve worked a lot. It’s an agency that does export subsidies, the case that is made about the export/import banks work sounds very much like, without export subsidies there’s very little exports or that it’s essential to exports. The same can be said about SBA loans, about all sorts of things. And the truth of the matter is when you kind of look, obviously those loans, they matter to the people who get them. But that’s not the same thing as to say first, the impact on the economy is positive for all. More importantly, from the data perspective that it means it’s huge in the scale of exports.

So, for instance, that’s one of the things that I would look at in this case is like their share—the value of export that actually goes out without any export subsidies. Because if you just kind of give a number, like nominal number of exports that’s supported by export subsidy, it may seem big. But you can’t actually really quite know what it represents unless you put it in the context of the overall market. So, putting things in perspective is important, also giving a time perspective is important. I mean, so, here I could think about, because we’ve been talking a lot about this, the decline in manufacturing due to the China shock. And if you do a chart that looks at the time of the China shock or the exception to the WTO of China it really looks—I mean, if you look at those five years or even 10 years it really looks like a deep decline. But then, if you actually put it in perspective and look at the 60 years before this or 50 years before this, you actually see that this decline is all part of a trend that had started long, long before. So, I think these are some of the things that I would do.

Suiter: Yes. So, I think that’s great advice for people looking at charts and graphs, to ask themselves questions about the timeframe, whether the data are being put into some perspective that makes sense rather than just large or small numbers that have no real meaning in the context of the topic, you’ve got to put it into perspective. I’m glad that you feel similarly to data visualization as we do here, that it’s a valuable tool when used well to help educate the public.

As a syndicated columnist you write about many varied topics and policies. What advice do you have for young women about communicating economic ideas to a general audience?

Rugy: So, op-ed means opinion, right?

Suiter: Right.

Rugy: So, you have to tell people what your opinion is, and you have to tell them if that opinion is granted and actually fact or if it’s just an opinion, right? I try to never write things that are just like, this is just my opinion. I really kind of focus on policy issues. I really try to never, ever, ever, ever comment on people and people’s behavior. And, you know, I try to kind of really keep it to policy ideas. But my advice would be, don’t be shy about giving an opinion. People are not reading you to know what other people are saying. But if all you write is on one hand this, on the other hand that, or this person said this but it’s balanced by this other thing and in the end, we don’t know what your position is on that particular topic, you probably shouldn’t be writing it. So, that’s one thing.

My other piece of advice is, especially when you’re starting, really get your work checked. First, write a lot, write for free, write every opportunity you have, write often, write anywhere. The syndicated column, that’s not always what it used to be but one of the reasons I’m interested in it, it’s because it actually reaches very small newspapers. You know, while it’s gratifying to write in the New York Times or to write in the Wall Street Journal, I think it’s worth writing anywhere. But also, it is really important that even if you’re scared just get your work checked, get your work edited. Worship your editors, that’s my biggest advice, I love editors. Now, it’s not just because I still haven’t mastered English. But it’s just because editors make your work look better and they get none of the credit. And they really will tell you when you’re wrong but also, just send your stuff to your colleagues. Especially the ones who you think may disagree with you.

Suiter: That is fabulous advice. I loved that you try to focus on the issue and not talking about people. But also, grounding your opinion in fact when you can.

Suiter: Could you talk a little bit about any hurdles you faced in getting to this point in your career and how you overcome those?

Rugy: There’s several things about my career that is going to be different than most people. And the first one, obviously, is that I picked a profession where the most important skill is how you write and talk and how you’ve mastered the language in which you write and talk. So, that’s kind of crazy when you think about it, what was I thinking about? That was a big hurdle, I mean it was and it continues to be. I am always more nervous about my brain not functioning because of language than anything else. another hurdle, I guess again, I’m probably not that unique but I came into the policy world, just honestly kind of an idiot ideolog and not a ton more. And that was like a hurdle I had to overcome by learning to be a better scholar. I have worked really, really hard, these two things in my life to become a better scholar and to actually be able to write and speak English better.

Suiter: Your English is fabulous. In terms of language writing and speaking, a lot of that came from practice and development of skills on your own?

Rugy: Yes. Well, not just on my own but I prepare a lot. So, I get so nervous about my English sometimes that I will just memorize entire talks just so I don’t have to worry about it. When the stakes are really high, I just basically memorize in a way that I think a lot of people just don’t have to do. I have worked actually with speech coaches several times in my career. When I was at AEI, I wrote a paper called “Is Port Security Spending Making Us Safer?” It was kind of bold because it was in like 2005 and I was at AEI which was obviously thinking that, you know, it was great, and that all Homeland Security spending could only increase safety. That paper was covered by 60 Minutes and I had an interview and basically, they couldn’t use any of my quotes, not one that I said, nothing, nothing. My English was just not good enough, I hadn’t prepared enough. I also remember giving a talk at a Cato even and where one of their donors came to me and he said, “You know, you have a lot of energy but I just can’t understand a word that you’re saying.”

Suiter: Oh my gosh.

Rugy: These were things that were actually really hurtful but it was actually really useful to me. Because it is a reality that actually, I’m competing with people and speaking English while having a French accent may be cute in some areas, in some instances, it’s like what’s more important is that people understand you, right?

Suiter: Hm-hmm [affirmative].

Rugy: And so, it was very hurtful but very useful too.

Suiter: So, kind of a light-hearted maybe question here: If you could meet with one economist who’s no longer living, no longer with us, who would it be and why?

Rugy: There’s so many, there’s so many people, obviously I would meet with. given the kind of work that I do, I would say Frédéric Bastiat who was a 19th Century French political economist and he was a champion of freedom. What he had really that was remarkable is like he mastered the art of making the complexities of economic reasoning understandable to everyone. And more than one economic historian have emphasized that Bastiat’s special ability was actually really important in undermining the rational four things like protectionism and bad economic policies. he was just a brilliant writer and he seemed like a lot of fun in his writing. And he was great at reminding people that there’s always some unseen behind every scene that you see. But at the same time, he was really a pioneer. I mean, he pioneered actually in his writing, you know, ideas like the concept of opportunity cost. He really planted the seed of what we’d become, public economics and again, he sounded like a lot of fun.

Suiter: So, I hope you saying this will encourage our listeners to go out and learn more about him and learn about his contributions. I want to again thank you so much for being with me today to have this conversation. We appreciate you taking your time to join us. I know our listeners will benefit from hearing your story and so, thank you for sharing it with us.

Rugy: Thank you for having me.

Suiter: To hear more from the Women in Economics Podcast Series visit stlouisfed.org/womeninecon, that’s one word, stlouisfed.org/womeninecon. You can also stream Women in Economics on Apple Podcast, Spotify or Stitcher or ask your Amazon device, “Alexa, play Women in Economics from Tune In.” Thank you.