Lardaro Should Watch His Credibility Attacks


It’s interesting to see Len Lardaro, a University of Rhode Island economics professor, argue against the RI Center for Freedom & Prosperity’s sales tax elimination proposal on the grounds that we might have once cited the Hoover Institute on something:

Lardaro, however, disagrees. “It is a good idea but, like many Rhode Island proposed solutions, there has been little to no due diligence,” he said. “The group pushing it has created a report card using an ideologically tainted model from the Hoover Institute predicting Rhode Island’s economic activity is about to explode. This calls the entire group [promoting the measure]’s credibility into question. Reform sales tax? Yes. Abandon it? No.”

As the second commenter to the article writes: “A state employee is concerned about a loss of revenue. Conflicted?”

According to the Center’s RIOpenGov payroll module, using data directly from the state government, Lardaro’s gross pay for 2012 was $107,359.  That’s a fair bit of incentive to join the State Budget Protection Guard.

And even if Lardaro’s iterative Current Condition Index hadn’t become one of the sad echoes of the state’s economic wallow, his Credibility Index ought to be suspicious.  Anybody recall his 2009 op-ed?

I propose raising the state’s sales-tax rate to 8 percent from 7 percent, not broadening its coverage to services (to help contain regressivity), and earmarking all of the resulting tax proceeds to K-12 public education and public higher education. Should the legislature try to move any of the resulting revenues to the General Fund (the God of current consumption), I expect Governor Carcieri to veto this measure and take his case to the people.

After a morning of talk radio discussing his proposal seriously, by the time he got to Dan Yorke’s drive-time show, he proclaimed it to have been a joke to get a rise out of people and wake them up. Sure.

If due diligence is the watchword of the day, perhaps some investigation is in order into the past behavior of people who have a personal financial interest in maintaining the state budget.

  • Russ

    "…on the grounds that we might have once cited the Hoover Institute on something"

    Um, actually it was on the grounds that "the group that has created and pushed the bill has used 'off the mark numbers' in the name of special interests." Let me say what a shock that was for us on the left.

    Note, as a regressive tax I'm not enamored with sales taxes. But I'm also not someone who wants to fire a torpedo into the state budget to see what's still floating when the smoke clears.

  • MoniqueAR

    " there has been little to no due diligence" [on the proposal to eliminate the sales tax]

    Respectfully, that is erroneous. Considerable diligence has been done.

    For those who oppose the proposal, the necessary question to be answered is: what (if anything) is wrong with the diligence?

  • Russ

    Yes, clearly the burden of proof is on those trying to refute the claims, hehe. Full speed ahead, righties! This also in, cutting taxes for the wealthy causes it to rain gumdrops. Prove that won't happen!

    fwiw, Lardaro does say what he believes to be wrong: the claims being made about the economic benefits of gutting sales tax revenue is based on an "ideologically tainted model from the Hoover Institute predicting Rhode Island’s economic activity is about to explode."

  • But that claim has no basis, except in some rumor or something that Lardaro doesn't explain anywhere. He's just making wild assertions. He's certainly never made any inquiry to the Center for Freedom & Prosperity or (as far as I know) the Beacon Hill Institute that developed the model.

  • Russ

    Ah, interesting. I didn't pick that up from the post. I wonder if that would change his opinion or if his objection was with the methodogy in the model (irrespective of the organization that created it).

  • Again, as far as anybody I've talked to knows, he's never looked into the methodology of the model… just as (one hopes) he didn't look into the economics of increasing the sales tax during a recession to better fund his employer before he proposed the idea in the state's major newspaper.

    • Russ

      Casting aspersions on the ethics of tenured economics professors just makes your position seem weaker. I've often disagreed with Lardaro, never once suggested he didn't truely believe what he was saying.

      • I'll take that under advisement. You use one of the larger telescopes around for looking for things that make the landscape of my positions seem weak. Viewed through a fair lens, I'd say, my aspersions are pretty mild compared with Lardaro's "the entire organization should not be trusted because I found (or imagined) a Hoover connection in something, somewhere, in something that somebody affiliated with the organization has done" (paraphrased, slightly).

        Wouldn't it be nice if the professor offered something resembling an alternative assessment or explanation academic differences of opinion?

        • Russ

          Interesting reading of the comment and I think perhaps wishful thinking. I read that as, "[the use of off the mark numbers for the economic impact of sales tax cuts] calls the entire group’s credibility into question."

          • Well, I'm not going to argue that Lardaro made his point clearly, but there are several word choices that suggest my interpretation is more accurate than your inference.

            1) The model is not a "report card"; it's a model that makes predictions. Although some professors may do things differently, a "report card" is supposed to document past performance, not predict future performance. The Center does have other products called "report cards," although none of them use models from Hoover.
            2) The model was not created by the Hoover Institute.
            3) The model does not predict that "Rhode Island’s economic activity is about to explode." (That sounds more like Lardaro's own index… if only from its iterations every other month.)
            4) There would have been no reason to "call the entire group's credibility" into question if the flawed model he's talking about (from Hoover) is the one bearing on the specific prediction that he's criticizing.

          • Russ

            btw, Lardaro is not alone in his opinion of STAMP. I've been reading up on specific biases toward the findings of very low impacts of government expenditures and very high impacts of tax increases.

  • I should emphasize that his language in the article suggests that Lardaro is talking about some other product from the Center, whether a study or a blog post, I don't know, because I couldn't find Hoover mentioned on the the site in a quick search. He's then asserting that that assertion (wherever and whatever it might be) "calls the entire group’s credibility into question."

    We should expect more from six-figure economics professor at our flagship public university.

  • Mike678

    Tenure is often the cure for excellence…..