Ducks and Economics

Greg Young, a MU student with some inconsequential links to Grass-Roots Organizing, comments on my piece on Rex Sinquefield in the Missouri Record:

My problem with this section is that Eapen presents the idea that Sinquefield and the Show-Me Institute protect the rich and powerful at the expense of the politically weak and powerless as a completely ridiculous idea.  It decidedly is not, and I don’t think I’m outside any mainstream orthodoxy when I say that.

This is misguided, and here is why. I am making the argument that it is not Sinquefield’s intention to protect the rich and powerful. I am not sure he even cares terribly much rich and powerful people remaining rich and powerful. But the what the evidence does indicate is that Sinquefield has been a powerful advocate for underprivileged children and education reform for years through his charitable work.

This interview with St. Louis Magazine contains a lot of the kind of biographical details that would allow for an informed evaluation of Sinquefield’s character, including his childhood in a Catholic Orphanage and the story of his life in academia and business. It is worth reading if you care about making an informed judgment about Sinquefield’s character and ability to be intellectually honest. Here’s an excerpt that I think is enlightening in terms of his policy advocacy in Missouri:

Obviously, the institute attracts like-minded scholars—Show-Me’s authors are vetted, often meeting with Sinquefield so he can decide if their heads are screwed on straight. But are the purchased study results biased in advance? They certainly weren’t in a recent study of the Missouri Plan, the state’s method of judge selection. Conservatives are eager to change Missouri’s system, but the study found it to have no economic disadvantages, compared to other nonelectoral systems. Sinquefield reportedly wasn’t thrilled by this conclusion; indeed, Show-Me promptly released a statement pointing out that there could be less tangible downfalls to the Missouri Plan. But Joseph Haslag, Kenneth Lay Chair in Economics at the University of Missouri–Columbia and an executive vice-president of Show-Me, says Sinquefield simply asked whether the methodology was sound. Assured that it was, he published the results.

So my response to Greg is that I think that a reasonable evaluation of Sinquefield and his advocacy leads to the conclusion that he honestly believes his policies are good for people and is willing to be honest about evidence based evaluations of those policies.

Greg continues:

For example, one of the Show-Me Institutes key ideas is their advocacy for a Fair Tax, which would eliminate the income tax in favor of a sales tax.  Now Fair Tax advocates will say that if implemented correctly, a sales tax can avoid being regressive and become equally fair to all citizens.  But it is hardly a controversial position to argue that a Fair Tax could end up harming lower income families while benefiting the rich and powerful.

The distinction I made answers this claim. Sinquefield believes this policy will be beneficial for the entirety of Missouri, not just the rich. Those who disagree that Fair Tax will stimulate job-creating economic growth can make their case, but their conclusion that the Fair Tax leaves Missouri low income Missourians worse off does not mean that Sinquefield thinks or intends that that will be the case. In fact, the evidence indicate that Sinquefield has already considered this possibility and has included in his proposal an explicit endorsement of an exemption for low income households from the Fair Tax. Here he is in the 2010 Show-Me Quarterly:

It’s true that a sales tax can be regressive, which is why it’s important to exempt low-income families from paying such increased taxes. If Missouri were to eliminate the income tax in favor of a slightly higher and more comprehensive sales tax, we could eliminate the penalty that the state’s tax policy imposes on business investment, and instead spur economic growth while simultaneously providing a more stable source of revenue for essential government functions.

It is a basic norm of civil discourse that you at least familiarize yourself with your opponent’s position on a subject before you implicate his character. It is this I find most offensive about the rhetoric of Grass Roots Organizing of Missouri: they’re lazy and willing to demonize someone before they are willing to research or understand his positions.