Lardaro is wrong about models and special interests.

URI economics professor Len Lardaro went on Dan Yorke’s WPRO show, yesterday, to dismiss the model that the RI Center for Freedom & Prosperity uses to project the effects of eliminating the state sales tax.

Lardaro insisted that RI-STAMP, developed by the Beacon Hill Institute, somehow leaves factors out, undercutting its results, and as he tweeted in October, the state has a “better model.”  A bunch of us met with experts on both models, last week, and although others should offer more-official assessments before I unleash mine, I will say this: Both take roughly the same approach.  Assumptions, not inputs, are at issue. It would be helpful to know what information Lardaro has that the score of people around that table for three hours missed.

Lardaro also suggested that the government should have in-house modeling and research staff sufficient to review policy proposals in order to avoid leaving so much open space of credibility for “special interests,” like the Center.  The naive cliché that government tends toward selfless, objective inquiry really needs to drift out to sea in the Ocean State.

Nobody at the Center has any unusual financial interest in the elimination of the sales tax.  Moreover, it serves none of us professionally, much less as people who live in Rhode Island, to have reality prove us disastrously wrong on the benefits.

By contrast, the state government (which employs Lardaro) has a clear and immediate interest in not risking hundreds of millions of dollars that it currently takes out of the pockets of Rhode Islanders.  “Moving the needle” becomes a series of little tweaks because the state government is Rhode Island’s largest special interest.

It flies in the face of common sense simply to assume that the latter group is inherently better intentioned and more credible than the former.

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