Fort Report: Opportunity Knocks
When I was a student studying economics, I worried about a trend that I saw. Advanced economics was becoming all about math. My heart and mind yearned for something else, so I sought the counsel of the department head and asked a question: "Who is studying normative economics?" Who studies what ought to be, the purpose of the economy, the values of fairness, and the importance of economic ecosystem for healthy prosperity? The professor basically gave me a good--and provocative--answer. No one.
On the whole, we have improving economic news of late. The jobless rate and hidden jobless rate are falling, and there is upward pressure on wages. This is welcomed relief from recent times where the story of America’s economic recovery has been uneven. Decreasing mobility and economic ownership, along with power concentration and consolidation in global corporatism, has affected of broad swaths of cities and towns across our nation. Amid the recent general rebound, far too many people continue to live in communities with long histories of a mismatch in skills and opportunities for meaningful work.
At the same time, in an encouraging turn, our politics is now infused with a renewed focus on the many people who have been long been sidelined. Legislation regarding taxes and regulatory environment is already helping, creating space for a surge of new social well-being. Late last year, Congress passed a broad tax reform package aimed at empowering businesses and individuals to thrive together in a 21st century marketplace. The new law has led to enhanced economic growth and more take-home pay for families. While these benefits have received most of the attention, a little-known provision in the law called Opportunity Zones has the potential to profoundly transform communities in Nebraska and throughout the United States.
The new law provides powerful tax incentives to encourage revitalization of some of the most economically-distressed areas in the country. Investors will be able to put unrealized capital gains into Qualified Opportunity Funds, which will then help finance projects in these areas of need. This change in the tax code will help fix a broken aspect of the market where risk factors are high. In Nebraska, 44 Opportunity Zones, including 14 in the First Congressional District, have been designated. Using the power of a public subsidy creates a genuine possibility of restoration at multiple levels. Three in particular stand out.
First is the regeneration of jobs. A good job is a good start in life. A good job is self-affirming, builds confidence, and gives earned gratification. When a person can dutifully provide for themselves and those under their care, social stresses significantly decrease. Participating in the making of something good for others creates a genuine economic ecosystem.
Second, we all have the experience of driving past vacated areas of a city. These are not just eyesores; these areas cost tremendous amounts of money. Streets and utilities must be maintained, the police must still patrol, and firefighters must standby on call. Deterioration invites crime, and underutilization gives us little return on the tax dollar already spent. By focusing on infill development, we better use what we already have, gain an enhanced return on the existing public investment, and conserve precious resources.
Third, by moving the market to what ought to be, stronger communities emerge. Pressures on social safety nets decrease. Persons can go from surviving to thriving, creating the space for the healing of social fragmentation with a renewed attack on structural poverty.
In America we do a lot of worshiping at the foot of the altar of economics. It's not the fullness of an answer. But by harnessing the power of the market as a tool for both personal and community well-being, Opportunity Zones may be where opportunity knocks.