Only the rich can play How Washington works in the new Gilded Age

Pulitzer winner Wessel (Red Ink) traces the concept of opportunity zones from their origin at a Washington insider dinner in 2013 in this trenchant exposé. The idea of opportunity zones, "struggling parts of the country" that can be economically revitalized by giving investors tax breaks, are the brainchild of Silicon Valley billionaire Sean Parker, Wessel explains: he built a "bipartisan coalition in Congress to write his idea into law," which succeeded in 2017. Wessel notes the irony as struggling communities desperate for outside investment--such as Baltimore and Appalachia--are passed over by investors who favor more promising ventures. And a lack of restrictions, Wessel contends, has allowed wealthy investors their tax breaks without the renewal the program was designed for (as seen in an opportunity-zone-funded Ritz-Carlton residence in Downtown Portland). But Wessel does find some zones doing it right: SoLa Impact provides affordable housing to residents of South Los Angeles, for example. Wessel's colorful, in-depth investigative reporting shines as he takes readers to an Opportunity Zone expo on the Las Vegas strip, behind the scenes of Washington, D.C., think tanks, and on the ground in West Coast communities. Comprehensive and shocking, this is an eye-opener. (Oct.)

Wessel (economics, Brookings Inst.; In Fed We Trust) presents a detailed account of the Opportunity Zone (OZ) program, enacted by Congress in 2017, and a report on its results. The OZ program was largely the creation of Steve Parker, a founder of Facebook, who proposed that investors be given large tax breaks on capital gains in return for investing in low-income communities. Wessel shows how Parker and his allies sold politicians (Senator Tim Scott) and economists (Larry Summers; Edward Glaeser) on the idea. After OZ legislation passed in the Tax Cuts and Jobs Act of 2017, Wessel visited various cities including Portland, OR, and Baltimore to see its effects. He writes that some underserved people have benefited, for example through affordable housing, but some investments have gone to the rich rather than poor. Wessel concludes that investors in OZs have benefited from the tax break, but the program does not have sufficient safeguards to prevent abuse. VERDICT Wessel has done a great deal of research and writes a fast-paced but careful account that is a major contribution to the study of the political process; readers interested in political science and economics will gain a great deal from it. Highly recommended.--David Gordon, Ludwig von Mises Inst., Auburn, AL

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. Copyright (c) Kirkus Reviews, used with permission.