BUSINESS EXCHANGE: Obama's 'Promise Zones'
William Reed | 1/15/2014, 3 p.m.
The Obama White House continues a pattern of attacking symptoms instead of the underlying disease, one rehashed progressive ploy at a time. President Barack Obama’s Promise Zones initiative is aimed at lifting up some of the America’s poorest communities. At a White House press conference Obama told the story of his time organizing in Chicago and highlighted the work local communities do to support their neighbors and prepare them to be contributors to the economy. In his Promise Zones program, Obama proposes to invest more than $750 million in hard-hit communities to provide a tax incentive to help build homes and create jobs. The first five are: San Antonio, Los Angeles, Philadelphia, Southeastern Kentucky and the Choctaw Nation of Oklahoma.
“There are communities in this country where no matter how hard you work, it is virtually impossible to get ahead,” Obama said in his speech. “America is not a place where the chance of birth or circumstance should decide our destiny. And that’s why we need to build new ladders of opportunity into the middle class for all who are willing to climb them.”
The Obama administration is designating “promise zones” by looking for areas where local officials can make strategic, targeted investments. For instance, a “promise zone” may be interested in reducing violent crime with increased Justice Department funding for local law enforcement. Alternatively, a region may want to leverage Housing and Urban Development grants to attract private real estate investors to high-poverty neighborhoods. The president’s plan also includes tax credits for hiring workers and tax write-offs for capital investments within the “promise zones.”
President Obama has called income inequality, "the defining challenge of our time", and is pushing to raise the minimum wage and “find new ways to help poor children break out of the cycle of poverty.” Obama says the “Promise” programs are part of his pledge to narrow the gap between rich and poor in America. The White House says the programs “will target job creation, housing, law enforcement and education.”
This latest big-government stimulus initiative is going to formulate yet another front for Democrats’ big “income inequality” campaign. The Democrats are full of expensive and ultimately unsustainable ideas for helping people temporarily cope with poverty (i.e., the welfare state), but are pretty much intellectually bankrupt when it comes to actually creating opportunities for people to lift themselves out of that poverty (i.e., economic growth and job creation). Income inequality is one way the White House seeks to address the larger problem of economic mobility. The problem is that this “promise zone” initiative actually doesn’t address economic mobility in any real, lasting, or widespread way. The Obama administration is once again using more bureaucracy – via the Departments of Education, Housing and Urban Development, Justice, Health and Human Services, Agriculture, and Commerce – to create top-down faux-collaboration in which the feds will decide upon “targeted investments” with “free money” the U.S. Treasury does not have.
The ineffectiveness of the Congress in the 50 years since Lyndon Baines Johnson introduced the “War on Poverty” makes the probability of sane and soon federal legislation to address income inequality a pipe dream. Shifting responsibility for economic development away from the dysfunctional legislative branch and toward local communities could evolve into a good thing.
Obama’s presidency never became the Promised Land many Blacks had hoped. Instead of the prosperity most of the nation realized large populations of Blacks have struggled economically under Obama. Overall, 25.6 percent of Blacks in urban areas live in poverty. Recent estimates put the figures at 17.9 percent in Atlanta, 19.3 percent in Charlotte and Los Angeles and 26.5 percent in Chicago. Two-thirds of Black children who were raised in the poorest of U.S. neighborhoods a generation ago now raise their own children in similarly poor neighborhoods.
What the whole of the country really needs to fight poverty are streamlined regulations, less red tape, fewer taxes, less prohibitive labor laws, less government spending, and less national debt at the macro level.
William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via the BaileyGroup.org.