Songfacts®:

• This song is about drug addiction. Wainwright wrote it about a love interest who was addicted to heroin, thus the lines:
  
  If you bring along your needles
  Then I'll bring my sharpened pencils
  
  A few years later, Wainwright became an addict himself, but not with heroin. His drug of choice was crystal meth.
• The subject of this song is Danny, the same guy Wainwright wrote "Danny Boy" about. In a 2020 Songfacts interview, Rufus explained: "He ended up moving back home to Nova Scotia, where he's from. I think he has three or four kids now and a kind of fulsome life, which is good, because he was very much under threat when we were young in terms of drugs and alcohol. So, he survived - thankfully."
• Unlike most 24-year-olds, Wainwright was really into opera; he loved the dramatic storylines and elegant orchestrations. "Baby" is the first song he wrote with a palpable opera influence, which he credits for setting him apart from the other singer-songwriters of his generation.
• Van Dyke Parks did the string arrangement on this song and produced it along with Jon Brion. Parks, who is known for his work with Brian Wilson, helped secure a record deal for Wainwright.
  
  Rufus' father, Loudon Wainwright III, is a singer-songwriter who released a hit song called "Dead Skunk" in 1973, the year Rufus was born. Loudon gave his son's demo tape to Parks, who took it up the ladder and got Rufus signed to the DreamWorks label with a healthy advance, which tweaked Loudon because they had that father-son rivalry thing going and Loudon wasn't happy being known for a song about a dead skunk while his could stroll into the studio and make a consequential album with great collaborators on a substantial budget. Indeed, Rufus ended up more popular than Loudon, but he never had a hit on the level of "Dead Skunk."