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Promise Zones: Ladders To Nowhere

Blog From
January 12th, 2014

Clown_Comic_Insert_v3Back in 2005, Congress was publicly shamed into withdrawing funding for a bridge construction project in Ketchikan, Alaska. Dubbed the “Bridge to Nowhere”, it would have connected the City’s populous with its island airport at a demure $320 million cost to taxpayers.

The stated purpose for the harbor overpass was to decrease the 15 to 30 minute ferry wait time and the $6 per-car fee. Alaska’s citizens, mortified by the huge price tag for a bridge of minor convenience, were determined to reject the money if proffered.

Fast-forward almost ten years. Much in the world has changed. For example, Congress has long since become impervious to shame. But, some things seem destined to remain the same like the fondness of politicians for lavish self-congratulation about extremely little.

The latest entry in the much ado about nothing legacy is President Obama’s Promise Zones, or PZ, initiative. First mentioned in his 2013 State of the Union Address, PZ is a stratagem to eradicate poverty. According to Mr. Obama, federal assistance will be provided initially to five “Zones”. They include parts of Philadelphia, Los Angeles, San Antonio, Southeastern Kentucky and Oklahoma’s resident Choctaw Nation. By the time the President leaves office, there may be as many as 20 Zones.

No new federal money will be provided to the Zones but various agencies, both federal and local, will coordinate their existing programs. Or, as Obama described it, they will provide “aid in cutting through red tape to get access to existing resources.”

That extraordinary effort must be undertaken in order for people to access available programs speaks volumes about the government’s bloated structure and just plain incompetence. Maybe Obama should create the Scissors Agency to cut through the red tape created by all the others. Except, before too long, the Scissors bureaucrats would get all tangled up in their own rolls of tape.

Promise Zones will have priority claim to federal grants, but are not guaranteed the money. Instead, they must compete for, and earn, it. Businesses will receive tax credits as incentives to return to the poverty-stricken areas to provide jobs and stimulate local economic growth. Congress has yet to consider these tax credits.

Loaded with catchy platitudes, the President’s Zones speech sounded appealing on the surface. He used heart-tugging phrases such as “inescapable pockets of poverty”, “ladders of opportunity” and, of course, “promise zones”. But, lurking beneath the lofty bromides lies one inescapable truth. PZ is an anemic approximation of previous federal programs with doubtful viability making it a lose-lose proposition.

First, PZ is stunted to the point of insignificance. There are five Zones now, maxing out at 20 in four years. The Zones are too small in area and too few in number to matter in the nation-wide struggle against poverty. And their special designation ends in ten years. All of this makes the initiative a toy-scale experiment. Long on talk but short on lasting effect. Perhaps the task of reducing red tape is such a Herculean effort that it cannot be replicated even in modest numbers.

Second, PZ is a more impotent rehash of Bill Clinton’s Empowerment Zones, or EZ, scheme. The latter poured $3.8 billion in grants into 103 poverty Zones with the same characteristics as the PZ Zones. The grants were new money that went directly to Zone programs. EZ also gave tax credits to businesses to entice local job creation and economic growth in nine Zones.

EZ projects have earned mixed reviews. Disagreement stems largely from the lack of data collection tools necessary for assessment, the complexity of evaluating the programs and the difficulty in determining whether changes, if any, are due to the projects or other, unrelated, factors.

There is also the concern that tax credits benefitted the businesses more than the poor. Further, the success of a Zone program may actually harm a neighboring community through the exodus of jobs, investment and people to the Zone.

The most surprising thing about PZ is not that it is a weaker version of EZ. It’s the fact that it took Obama’s brain trust an entire year to come up with this watered down retread. Or maybe the brainiacs simply could not figure out a way to beat poverty and, under pressure, punted.

Third, and most importantly, revitalization programs have been studied for decades. PZ is a throwback to the days of inexperience when people were first trying to figure out what works. The inherent problems in programs like EZ and PZ now have solutions which Obama’s initiative ignores. Ignorance may be bliss but it’s also a main ingredient in the recipe for failure.

EZ-PZ? Not exactly.

Understandably silent on his initiative’s problems, Mr. Obama assured us that we have our improving economy as a springboard to success. But the next day, the Bureau of Labor Statistics begged to differ in its dismal December jobs report.

Last month, employers added a mere 74,000 jobs, much lower than the expected 200,000-plus. This means that one in five adults are unemployed. Moreover, almost half-million people stopped looking for work in December. The employment participation rate is now the worst its been in more than three decades.

The economy is neither flexible enough nor strong enough to spring us much of anywhere let alone out of poverty. Unfortunately, like the Bridge to Nowhere, the President’s ladders of opportunity top out in the same place.


 





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