Clicking on banner ads enables JWR to constantly improve
Jewish World Review June 23, 2000 / 20 Sivan, 5760

Jack Kemp

Jack Kemp
JWR's Pundits
World Editorial
Cartoon Showcase

Mallard Fillmore

Michael Barone
Mona Charen
Linda Chavez
Greg Crosby
Larry Elder
Don Feder
Suzanne Fields
James Glassman
Paul Greenberg
Bob Greene
Betsy Hart
Nat Hentoff
David Horowitz
Marianne Jennings
Michael Kelly
Mort Kondracke
Ch. Krauthammer
Lawrence Kudlow
Dr. Laura
John Leo
David Limbaugh
Michelle Malkin
Jackie Mason
Chris Matthews
Michael Medved
Kathleen Parker
Wes Pruden
Debbie Schlussel
Sam Schulman
Roger Simon
Tony Snow
Thomas Sowell
Cal Thomas
Jonathan S. Tobin
Ben Wattenberg
George Will
Bruce Williams
Walter Williams
Mort Zuckerman

Consumer Reports

A renaissance for urban America? --
THESE DAYS when we're enjoying unprecedented prosperity and congratulating ourselves on our dynamic "new" Internet economy, we must also realize that the need for help on some fronts hasn't disappeared yet. The tragedies of wrenching poverty, family breakdown, crime and economic stagnation still permeate the inner city. The poor are still very much with us.

We have a moral obligation to combine our wealth and our imagination with the commitment and common sense to bring real economic opportunity to those who need it most. If ever a rising tide could lift all boats, this high-tech economic tide should be the one.

With the unemployment rate at around 4 percent, opportunity abounds for the vast majority of Americans. But not for all. Even on the upswing of an economic revolution, our most economically distressed communities have not realized the economic gains that benefited the rest of the country. They never have gotten the public policy attention they deserved, either.

That may be starting to change. One hopeful sign is the recent accord between the Clinton administration and House Speaker Dennis Hastert on a bipartisan package of measures to promote investment, economic growth, job creation and competition in providing community services in our poorest communities. Like the enterprise zone proposals many of us have worked for over the years, the Clinton-Hastert agreement on Community Renewal and New Markets would marshal the forces of the free market to bring new life to impoverished areas, particularly by cutting capital gains taxes and providing special tax incentives for investment in those areas.

There has long been a conflict in the public policy debate between the old-line, traditional "urban planners" with their top-down, centrally administered grant programs and us "enterprise zoners" who recognize that where economic activity in depressed communities is concerned, the best thing government can do is restore the link between effort and reward by lowering taxes and cutting red tape. Both camps, however divided they may be on basic issues of development policy, have long agreed that without effective crime control and greater educational choice, no government initiative can make a dent on the problems of the inner cities and economically abandoned rural areas.

That bit of common ground is broadened under the Community Renewal/New Markets accord, which undertakes a truly novel experiment in public policy. The accord proposes a fair test of an expanded version of the new Clinton-backed empowerment zones, which we've had for a few years (mainly in the form of targeted government aid programs), but adds new provisions to stimulate capital investment, give tax breaks for new hiring and even allow some targeted capital gains cuts.

In addition, the Hastert-Clinton agreement tries out an entirely new model for economic redevelopment, with zero capital gains on investments held for five years in the community, another variant on wage credits for new hires and (perhaps most important of all) opening the door for faith-based organizations, especially churches rooted in the community, to provide basic social services for needy residents in tandem with the kind of compassionate moral guidance too often lacking from government social engineering. I wish they had gone ahead and eliminated capital gains taxes altogether in these redevelopment communities, but it's a step in the right direction.

All told, the Clinton-Hastert accord is a striking breakthrough in policy aimed at economic development where it is most needed. There are some rumors that my Democratic friends want to renegotiate some parts of the package, and I urge them to heed Jesse Jackson's point that "capitalism without capital is nothing but an 'ism.'" We have to stick to our guns on this: The Community Renewal/New Markets package is a fair bipartisan deal, and we need to move swiftly to send a clear signal that the robust "new economy" will not bypass the inner city or the small towns and hamlets across America that have seen better days. Some communities have out-of-wedlock birthrates as high as 80 percent and incarceration rates up to 30 percent for men ages 26 to 29. It's not acceptable.

The most striking thing about this change in the policy climate is the recognition on both sides of the aisle that market forces, coupled with the initiative of traditional community anchors such as synagogues and churches, hold the key to success in revitalizing communities that have been left out of the economic mainstream for too long. In fact, broadening access to capital is the only way to tackle our most severe economic problems.

We can't forget, though, that the social problems that still wrack too many American neighborhoods - broken families, addiction, crime - need the kind of caring attention that government is ill-equipped to provide. That's why tax and regulatory incentives provide the essential framework of economic renewal but can never be the answer.

For that we need to call on the hearts and minds of all Americans, and on outstanding initiatives such as Ted Forstmann's scholarship program for children in need, Bob Woodson's work promoting community self-renewal through individual initiative and responsibility, and Millard Fuller's Habitat for Humanity, which helps anchor neighborhoods by turning needy families into homeowners.

Clinton, Hastert,and Reps. J.C. Watts and Jim Talent (whose Community Renewal initiative made this bipartisan agreement possible) deserve high praise. But we all have a role to play --- as parents, as citizens, as philanthropists and as common shareholders in the American dream.

Jack Kemp is co-director of Empower America and Distinguished Fellow of the Competitive Enterprise Institute. Comment by clicking here.


06/16/00: Capital access can bridge 'digital divide'
06/08/00: Some friendly advice for Rick Lazio
05/26/00: Is the economy being saved or destroyed?
05/22/00: Immigration and the promise that is America
05/12/00: Stock market roulette or snobbery?
05/04/00: Is Rule of Law whatever we say it is?
05/01/00: Myths happen

© 2000, Copley News Service