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Trump is Fighting Poverty with Capitalism


There is much in this world that the left doesn’t understand, and much of it relates to economics. They don’t understand why America is so prosperous or how basic economics work. They don’t understand that a $15 an hour minimum wage would destroy small businesses and it’s incomprehensible to them that wage inequality could possibly be a good thing (it is, equal is unfair). And, perhaps most worryingly, they don’t understand that capitalism is the solution to poverty; it’s a rising tide of wealth that lifts all boats. Luckily, however, our current president does understand that, which is shown by the fact that Trump is fighting poverty with capitalism.

Despite his profligate spending, the Trump presidency has so far been a wild economic success for America. The economy is booming, stock returns are up for those that understand the importance of investing, unemployment is low, tax cuts have boosted incomes for people and businesses, and deregulation is freeing the economy. However, one tenet of Trump’s economic revival is often left out, which is a shame because it is the main way that Trump is fighting poverty with capitalism.

What is that tenet of his administration’s economic strategy? Economic opportunity zones. These tax-favored areas beckon investors to develop them and thus build up currently under-developed and poor areas.

As someone interested in real estate, I had heard of these economic opportunity zones, but I didn’t know much about them. So, after a bit of research, I stumbled across a wonderful article by Thomas Philipson of the Washington Examiner about economic opportunity zones. It is entitled “Trump, the developer in chief, has a new way to fight poverty” and is the article I will be discussing today.

Summary of How Trump is Fighting Poverty with Capitalism

First, Philipson discusses how the outdated Big Government approach to fighting poverty, epitomized by Lyndon Johnson’s War on Poverty which is discussed in The Best and The Brightest, has been replaced by a proactive, market-driven approach to building the economy and fighting poverty:

After more than 50 years, the outdated government-dependency approach to fighting poverty has shown its limits, having raised the living standards of the poor but failed to expand self-sufficiency through work as President Lyndon B. Johnson’s War on Poverty envisioned. This unsatisfactory victory is why President Trump championed a new approach to fighting poverty through the 2017 Tax Cuts and Jobs Act’s Opportunity Zones provision…Instead of raising taxes and discouraging economic activity, Opportunity Zones provide targeted tax cuts to spur development and job creation in struggling communities.

From: Trump’s new way to fight poverty…Trump is Fighting Poverty with Capitalism

Then, Philipson goes into more detail as to how traditional anti-poverty measures, such as the War on Poverty programs, stifle hard work and Trump’s opportunity zones instead encourage it, showing that Trump is fighting poverty with capitalism:

Traditional anti-poverty programs provide cash grants or subsidize the demand for goods, such as healthcare, food, or housing. While these programs provide support to children, the elderly, and the disabled, they can also weaken the incentive to work for able-bodied, working-age adults…Medicaid, [for example] discourages people from working by an amount equivalent to their payroll taxes, with about 11 million workers being worse off if they work more because the program benefits they lose exceed their increased earnings. As such, they discourage people from becoming self-sufficient…

Instead, Opportunity Zones lower taxes on job creation, which is the most powerful source of poverty reduction ever invented. They do this by incentivizing private-sector investment in struggling communities that meet income eligibility requirements.

From: Trump’s new way to fight poverty…Trump is Fighting Poverty with Capitalism

Next, Philipson openly states that the difference between Trump’s efforts and the efforts of past bureaucrats is that Trump’s measures are market-driven and are thus more effective than some slow-moving, inefficient, taxpayer-funded program. Trump is fighting poverty with capitalism by creating policies that work rather than feel-good policies that get the government ever more involved in the lives of its citizens:

Opportunity Zones showcase the tax reform law’s embrace of the power of the decentralized market over centralized, bureaucratic rules and programs. This incentive for local business formation is expected to have a powerful and targeted effect on jobs and wages in areas that need it the most, similar to the effect the tax reform law’s national tax cut had on the labor market.

From: Trump’s new way to fight poverty…Trump is Fighting Poverty with Capitalism

Finally, Philipson describes how investors and developers recognize the benefits of opportunity zones and are directing huge sums of investment dollars at taking advantage of that opportunity:

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The emerging direct evidence on Opportunity Zones shows that they are spurring targeted investment, which is projected to reach a total of $100 billion in the coming years, an amount larger than the combined annual spending of three major anti-poverty programs: food stamps, child healthcare, and cash assistance. As of July 2019, the National Council of State Housing Agencies’s Opportunity Zone Fund Directory had 196 funds seeking a total of approximately $44 billion. Additionally, data from Real Capital Analytics show that year-over-year growth in development site acquisitions in Opportunity Zones surged by more than 25% late in 2018 after the Department of the Treasury designated the zones, greatly exceeding investment growth in the rest of the country.

From: Trump’s new way to fight poverty…Trump is Fighting Poverty with Capitalism

My Take on Philipson’s Article about How Trump is Fighting Poverty with Capitalism

I thought the points Philipson made were excellent ones and ones that more Americans need to hear.

The solution to poverty isn’t Big Government, socialist wealth redistribution schemes, or anything else that the communist likes of Bernie Sanders want. Those policies are not only ineffective but also embrace the socialist virus that America must avoid and destroy.

Conversely, the solution to poverty is something that has existed in America as long as the country has existed; free enterprise. If we free people to live their lives how they want to, free from burdensome taxes, overbearing regulations, and paternalistic welfare policies, then the economy will continue to bloom.

That’s the policy the Founding Fathers had in mind. James Madison and Benjamin Franklin both pointed out the problems with a welfare system and let’s not forget that the Revolution started because of a tax. The spirit of 1776 is that we should work hard and avoid taxes, not rely on government handouts and clamor for punitive taxes on the most successful, who we should be thanking for all they’ve done to make this country what it is.

Conclusion to How Trump is Fighting Poverty with Capitalism

So, I thought Philipson’s point was excellent and much needed. Economic opportunity zones are the future to the fight against poverty because they unleash the individual rather than constraining him.

Trump is fighting poverty with capitalism. He, at least, understands that if we let it, capitalism will save us. We just have to create a laissez-faire market in which men are free to build and trade as they see fit, rather than only with every minute detail of their plans scrutinized by a feeble-minded bureaucrat. Make the whole country an opportunity zone!

By: Gen Z Conservative