"Understanding the economy is essential to being an informed citizen of our democracy. My goal is to explain trenchantly how the economy is changing and how economic policies we adopt today will shape the lives of future generations."
David Wessel is director of the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution, which he joined in 2014 after 30 years as a reporter, editor and columnist for The Wall Street Journal. He has shared two Pulitzer Prizes. David is the author of two New York Times best-sellers: “In Fed We Trust: Ben Bernanke’s War on the Great Panic” and “Red Ink: Inside the High Stakes Politics of the Federal Budget.” He tweets frequently at @davidmwessel.
A few pages quietly slipped into the 2017 tax cut law created an archipelago of 8,764 tax havens across the United States known as Opportunity Zones billed as a way to offer rich folks lucrative capital-gains tax breaks to put their money into left-behind communities. Illustrating how Washington really works in this new Gilded Age, Only the Rich Can Play traces the origins of OZs, as they’re known, from their progenitor, Sean Parker of Napster and Facebook fame, and the think tank he funded to design them, organize a bipartisan coalition to support them, and lobby them into law – with Sen. Tim Scott, the sole Black Republican in the Senate, playing a pivotal role both in Congress and in winning Donald Trump’s backing at a pivotal moment.
The book details the no-guardrails approach the Trump Treasury took to administering OZs and the choices (some good, some bad) that the nation’s governors made in designating the zones from the list of eligible census tracts. Only the Rich Can Plays describes the gold rush that was triggered when tax lawyers, accountants and real estate investors discovered the provision, and then turns to where the money went (a lot of it to places like prosperous downtown Portland, Oregon) and for what (often hotels, condos, self-storage facilities and luxury student-housing) and where it didn’t (places like Baltimore) – and highlights a few places (South LA and Erie,Pa.) where Opportunity Zones are doing what they were supposed to do.
There’s no question that most industries are becoming more concentrated. Big firms account for higher shares of industry revenue and are reaping historically large profits relative to their investment.. But does this reflect anti-competitive, monopolistic practices by the likes of Amazon, Apple, Facebook, and Google? Are Incumbent firms in a wide range of industries — airlines, beer, pharmaceuticals, hospitals — are wielding market power in ways that prevent rivals from emerging and thriving? Or are the bigger firms bigger because they are simply better and more innovative? This is one of the biggest economic policy issues confronting Washington these days.
The Hutchins Center’s second survey of Fed watchers in academia and the private second found a substantial improvement in their grades of the Fed’s communications compared to a 2016 survey. More than half the 2021 respondents gave the Fed an A or A-. In the early survey, only four of 58 respondents (7 percent) did. The survey found that the Fed chair’s press conferences following meetings of the Federal Open Market Committee and his speeches are the most useful of the Fed’s communications tools. More than 80 percent of the respondents rated them “useful” or “extremely useful.