ONLY THE RICH CAN PLAY

Want to expand a fortune? All it takes is a congressperson or two in the pocket, as this vivid account of gaming the political system amply demonstrates.

Brookings Institution economist Wessel opens with a 2013 dinner at an expensive D.C. restaurant in which a current Biden economic adviser and one from the previous administration broke bread with Sean Parker, the fallen but shameless founder of Napster and ousted first president of Facebook. Parker had two passions: to cure cancer and end poverty by making it possible for “very rich people to invest in left-behind parts of the country in exchange for a generous tax break.” Everyone Parker met warned him off trying to translate such a project into law—but, against the odds, he pulled it off by bagging politicos who passed a law in 2017 that created 8,764 “opportunity zones.” These allowed wealthy people to invest capital gains in poor census tracts and thereby lessen or eliminate their tax burden. Of course, in the Trump era, there was no oversight, and thus money went into projects that benefited the rich and areas that didn’t need economic spurring, such as rapidly gentrifying sections of the Bay Area and a Nevada industrial park that housed a Tesla plant. (One investor in the latter was Michael Milken, his name a byword for fraud, who was quite open in admitting that “he was buying land to take advantage of the tax break.”) Meanwhile, places where such tax breaks would have worked to the benefit of poor neighborhoods, such as Baltimore and Detroit, went underfunded even as the regulations got “consistently more taxpayer friendly.” Wessel allows that some investments did go to their intended targets, though most did not. Even so, opportunity zones are so popular that they’re unlikely to go away, since “once launched, government programs and tax breaks tend to persist.”

A clearly articulated, maddening case study in how the rich get richer on the backs of the poor.