Why NASA Hired a Chief Economist

Summary of Why NASA Hired a Chief Economist

by Bloomberg

49m•March 31, 2026
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Overview of Odd Lots

This episode of Bloomberg’s Odd Lots features Alex McDonald, who served as NASA’s first chief economist and is now a senior associate at the Aerospace Security Project (CSIS). The hosts Tracy Alloway and Joe Weisenthal interview McDonald about why NASA added an economist, how economics shapes space policy and procurement, the evolving role of private capital (SpaceX, Blue Origin, etc.), what commercial space markets might realistically look like, and how public policy and law interact with emerging space activities.

Guest background

  • Alex McDonald — former NASA chief economist; worked at NASA Ames and in the Office of the Administrator; PhD in economics with a focus on the economic history of space (author of The Long Space Age); now at CSIS’s Aerospace Security Project.
  • Role at NASA: independent technical advisor to the administrator on markets, investment, procurement risk, and economic impact.

Main takeaways

  • NASA created a chief economist role because private-sector activity in space expanded the agency’s need for market, investment and procurement analysis.
  • The modern space economy mixes public and private roles: government funds high-risk, public-good, or infrastructure activities; private firms lead where market demand exists (launch services, satellite constellations, LEO services).
  • Historical public investments (e.g., Apollo-era demand) drove fundamental technology scale-ups (such as semiconductors) with large downstream economic spillovers — not trivial consumer spinoffs but transformative tech.
  • Short-to-medium term commercial opportunities are likeliest in low-Earth orbit (LEO) services: private space stations, microgravity manufacturing R&D, satellite internet (Starlink), and potentially orbital data centers — though many ideas remain economically uncertain.
  • Lunar and Martian economies are farther out. The moon will involve a mix of public infrastructure and private services; resource extraction is legally possible under current frameworks but territorial claims are prohibited by the Outer Space Treaty.
  • Procurement at NASA relies on multidisciplinary technical and economic assessments; public procurement documents can reveal evaluation logic even if proprietary details are redacted.

Topics discussed

  • Why NASA needed an economist and what the role actually does (procurement, market analysis, advising the administrator).
  • History of space finance: private patrons → WWII/government-driven rocketry → Cold War and NASA’s creation → Apollo spending peak and subsequent budget decline.
  • The Space Shuttle’s retirement: safety/economics after Columbia; parallels between shuttle’s reusable ambitions and SpaceX’s Starship.
  • Commercial crew program and offloading operational responsibilities (SpaceX Dragon, Boeing Starliner).
  • Economic spillovers of space programs (semiconductor scaling, miniaturization).
  • The LEO economy: private space stations, microgravity manufacturing possibilities, and the race to produce repeatable profitable products in orbit.
  • Orbital data centers: potential cost/benefit variables (launch cost, cooling, reliability) and environmental/social impacts (night-sky reflectivity).
  • Moon and Mars: Artemis program architecture, Artemis II flyby, uncertain landing timeline (target ~2028 but dependent on technical steps and refueling logistics), motivations for human settlement (scientific, cultural, existential).
  • Space law: Outer Space Treaty (no national sovereignty), ownership of assets, Space Act of 2015 on resource rights.
  • Longer-term speculative ideas: space elevators (material feasibility), extraterrestrial economies, and governance challenges.

Notable quotes / concise insights

  • “This is not an investment, it’s an expenditure.” — on why conventional ROI calculations don’t directly apply to NASA programs; instead, NASA measures economic impact.
  • Technological spillovers matter more than trivia: space-funded advances (e.g., semiconductors, Apollo guidance computer) created foundational tech for modern economies.
  • “No space NIMBYs” — a wry note on regulatory/permitting advantages for orbital infrastructure, but also a cue to think about public goods and night-sky impacts.
  • Shuttle → Starship: the same economic/engineering goal persists — fully reusable, aircraft-like operations to lower cost and scale activity in space.

Practical implications and recommendations

  • For policymakers:
    • Maintain public funding for activities with no near-term private-market solution (basic science, foundational lunar infrastructure, certain safety/regulatory roles).
    • Treat NASA as an infrastructure manager in addition to a research agency — expect a mix of public ownership and private services.
    • Monitor and regulate shared commons issues (space debris, constellation reflectivity, orbital congestion).
  • For investors and startups:
    • LEO services (private space stations, microgravity R&D, satellite comms) are nearer-term commercial prospects than lunar mining.
    • Orbital data centers and in-space manufacturing require careful techno-economic assumptions (launch cost sensitivities, thermal management, asset longevity).
  • For researchers and the public:
    • Read NASA procurement and economic-impact documents to understand agency decision-making and technical-economic tradeoffs.
    • Recognize the long time horizons for transformative returns from space programs; many benefits are indirect (technology spillovers) rather than immediate revenue.

Fast facts / timelines referenced

  • NASA budget: peaked during Apollo in the mid-1960s (a few percent of federal budget), then declined and has been roughly inflation‑flat since.
  • Artemis II: described as an imminent lunar flyby mission (crewed Orion around the Moon).
  • Artemis landing: publicly targeted dates have varied; a 2028 landing target is discussed but remains uncertain and dependent on Starship performance and refueling logistics.
  • Outer Space Treaty (1967): forbids national sovereignty claims over celestial bodies; Space Act (2015): U.S. law enabling private extraction and ownership of resources.

Further reading mentioned by guest

  • The Long Space Age (Alex McDonald) — economic history of space exploration.
  • City on Mars — recent book discussing habitation challenges on Mars.
  • Liu Cixin — The Three-Body Problem (recommended fiction touching on existential space risks).

This episode offers a clear, economist’s lens on why space policy, procurement, and markets are increasingly intertwined — and why NASA added economic expertise to navigate the evolving public-private frontier in space.