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The Many Stories of Stephen Magee

Stephen MageeThe finance professor opens up about confronting Castro, dancing the Dougie, and ranching with rattlers.

 

What is the toughest part of your job?

Getting enough sleep. My hyperactivity causes me to stay up late at night.

If you had to choose another career, what would it be?

There could be no other job for me. I have always wanted the professor because I get to be an academic entrepreneur. I love teaching and research. Do not tell the Dean this, but I would do this job for nothing. That might require me to work a second job.

What is your favorite subject to teach? To research?

My first love is my Managerial Microeconomics course for the entire first-year MBA class every fall. It combines my love of human behavior with mathematics, strategy and rational behavior. A close second choice is my course in global finance. The latter is because over half of my 80 published academic papers are in the area of international economics and international finance. My other publications are in the areas of intellectual property and the value of patents, antitrust, regulation and the positive and negative effects of lawyers on the US economy.

What is the last movie you saw?

My last movie was Django [Unchained], about the tragic violence of slavery in the deep South. Despite the serious message of the movie, it was also hilarious.

Stephen MageeWhat are people surprised to learn about you?

People are interested to find out that I grew up in Lubbock and spent ten summers on my grandfather’s ranch working with cattle. Every job I have had since then has been easy.

What was the most fun you had in your career?

My greatest joy is working on the edge of the economic frontiers of knowledge. It took me and two coauthors 18 years to write a book titled Black Hole Tariffs in which we found that economies can be destroyed when money drives politics (eg the 2008 fiasco with subprime lending) or when redistributive activity is rampant (eg, crime in ghettoes). An overly exciting event was my debating Joe Jamail (the world's richest lawyer) in front of 500 people here at the UTC on the economic costs and benefits of lawyers. Another thrill was working on President Nixon’s White House staff.

Describe yourself in three words.

Enthusiastic, inspiring and kind.

What is your greatest weakness?

I tend to over commit when asked to do things.

What inspires you?

This does. In 1854, the US government bought the land from Native Americans in the Pacific Northwest and moved them onto a reservation. After losing everything, their leader, whose Indian name was Chief Sealth, wrote the following letter to President Franklin Pierce. “If we do not own the earth, how can you buy it? Every part of this earth is sacred, every shining pine needle, every mist in the dark woods is holy to the memory of my people. But we agree to move to the reservation. When the last red man has vanished from the earth and his memory is only the shadow of a cloud moving across the prairie, these forests will still hold the spirits of my people. Care for this land as we have cared for it and preserve it for your children. May we one day be brothers after all.” The city of Seattle was named for this Indian chief.

What or who do you think is overrated?

No one is overrated. Scientists estimate that man has been on this earth for 6 million years. That works out to each of us having 300,000 generations before us. Each of our preceding generations successfully reproduced without a single miss. If there is a .5 chance that each generation would contribute to the next, the probability that each one of us is here is .5 raised to the 300,000th power. That probability is a decimal point followed by zeros reaching from here to Dallas before a positive digit is encountered. Thus we are all walking miracles and no one is overrated.

What characteristic is essential to succeed in business?

I believe that integrity is the key to all success, inner and outer.

I understand that you worked in the White House during the Nixon administration and that you once presented a paper in Cuba to Fidel Castro. Who was more intimidating?

I was actually lecturing at an academic conference of international economists in Havana in 2003. Fidel Castro just walked in the last minute and sat on the front row. At the end of my talk, he motioned for me to come down and meet with him and that meeting lasted for over an hour. For some reason, perhaps jaundice, the pupils of Castro's eyes were yellow. He would place his hand on my shoulder, look straight into my eyes and rail at me darkly on the evils of Wall Street and American capitalism. I started to rethink the wisdom of my pro-market speech. I wondered how many people had looked into those yellow eyes as their last experience on earth. Then Castro would light up and become positively charismatic, like Reagan or Clinton.

Magee and Castro

I never had a personal meeting with Richard Nixon – – I just passed him occasionally in the White House hallways. I understand from Secret Service people who worked for all presidents from Eisenhower through Gerald Ford that Nixon was the nicest of all those presidents to the staff. I was struck by how short Nixon was (5”11”). I did meet your LBJ (6’4”) in 1968 while working on the President’s Economic Report and he was positively intimidating. I met with VP Nelson Rockefeller in the late 1970s but he was a nice person. I presented a paper entitled “The Optimum Number of Lawyers” to the White House staff in 1992 but did not get to meet Bush I. At the end of the meeting, one staffer said that he did not understand anything I said except that he liked the lawyer jokes.

You’re now famous for your cameo in the MBA student video Teach Magee How to Dougie. So what is your secret to doing The Dougie? And how did they convince you to do the video?

There was no secret to my doing the Dougie. I couldn’t do it. Carlos Dinkins (leader of the group dance) said he would teach me but he forgot, so I just had to wing it. I didn't know how to do it then and I don't know how to do it now, as you will see if you watch it on YouTube.

 

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