Nick Hanauer:

Opportunity zones are this real estate play that all my rich friends are using right now. It’s just in the air.

David Goldstein:

Of course.

David Wessel:

I’m all for rich people having good ideas about how to fix our economy. I’m not for letting them write the rules.

Nick Hanauer:

Opportunity zones are yet another example of the way in which the neoliberal ideology has shaped policy in ways that was sold as a benefit to everybody, but really only benefits the top 1%

Speaker 3:

From the home offices of civic ventures in downtown Seattle, this is Pitchfork Economics with Nick Hanauer, the best place to get the truth about who gets what and why.

Nick Hanauer:

I’m Nick Hanauer, founder of Civic Ventures.

David Goldstein:

I’m David Goldstein, senior fellow at Civic Ventures. So Nick, it’s the holiday season and I’m stuck, what do we get you, the man who has everything?

Nick Hanauer:

How about a giant tax cut?

David Goldstein:

Yeah. Well how about what could our listeners give you? An appreciation for this podcast?

Nick Hanauer:

Yeah, well, you know what? It really helps us so much when you listeners leave us reviews and ratings. I know it doesn’t seem like a big deal, but believe it or not, it really makes a difference in the reach of the podcast. And so please tell your friends and family about the show and please leave us reviews and ratings. It is so awesome when you do.

David Goldstein:

Okay. That sounds great. And speaking of tax cuts, Nick, this episode is like a gift for you.

Nick Hanauer:

It is. It is. Today. We get to talk with David Wessel, who is a senior fellow in economic studies at Brookings and director of the Hutchins Center on Fiscal & Monetary Policy. He’s a former Wall Street Journal reporter who has been in the political economy game for a long time, he actually interviewed me a million years ago. And he’s the author of this really interesting recent book called Only the Rich Can Play: How Washington Works in the New Gilded Age, the story of opportunity zones. And why I’m super excited to have the conversation is that opportunity zones are this real estate play that was made possible by the Trump tax cut of 2017 that all my rich friends are using right now.

David Goldstein:

Of course.

Nick Hanauer:

It’s just in the air and it’s basically a way of shielding taxes for rich people, sold as a benefit for poor people. But anyway, I think it’ll be really interesting to talk to David about this provision and the way in which it’s shaping our economy. If past is prologue, if you are wealthy and own assets in the current economy, benefits will just accrue to you because that’s the way the code is written.

David Wessel:

I’m David Wessel, I’m director of the Hutchins Center on Fiscal & Monetary Policy at the Brookings Institution and the author of a new book on opportunity zones called Only the Rich Can Play: How Washington Works in the New Gilded Age.

Nick Hanauer:

That’s fantastic. So David, I’m fascinated to have this conversation with you and excited that you wrote this book because so many of my wealthy friends are engaged in this opportunity zone thing. And in fact, I absolutely know that a ton of rich people are getting richer using this strategy. So can you explain for our listeners what an opportunity zone is in broad strokes?

David Wessel:

Opportunity zones, which were a part of the 2017 tax bill, created 8,764 tax havens across the United States census tracts, in which if someone has a capital gain, they take their profits, they get a discount on their capital gains and they get to pay the capital gains tax a little later, and paying taxes later is always better than paying them sooner. And then the big benefit is, if they invest in almost anything in an opportunity zone and they hold that investment for 10 years, they don’t have to pay any capital gains taxes whatsoever on any profits.

Nick Hanauer:

Can you explain that by using an example with numbers?

David Wessel:

Sure. So let’s say I have some stock and I bought it a long time ago, say I was smart enough to buy stock in Apple and I’m sitting on $100,000 worth of capital gains. Of course, the way our tax code works now, I don’t have to pay any taxes on that stock if I hold it, but the day I sell it, I’m going to own capital gains taxes. So let’s say, if I have $100,000 worth of profits, I’m going to owe about $28,000 worth of capital gains taxes. If I choose to sell that stock and put it an opportunity zone, I get a discount on that capital gains tax, let’s say roughly 10%, and I don’t have to pay that tax until 2026. So that’s the incentive for me to get immediately. I get to delay, I get to sell my stock, I get the profits, I can use them, I can defer paying capital gains taxes for several years and I don’t have to pay the full $28,000. Then I can take that $100,000 profit and invest it in anything, an office building, a business, self storage facilities, almost anything, not a liquor store, not a massage parlor, not a golf course. There’s a list like that in the law. And if I hold onto it for 10 years and-

Nick Hanauer:

Anything in an opportunity zone?

David Wessel:

… Anything in an opportunity zone, yes.

Nick Hanauer:

Okay. Okay. Yeah.

David Wessel:

It has to be in one of these 8,764 census tracts that’s been so designated. I put my $100,000 profit into that building or business in an opportunity zone. And presumably I make money on it. So let’s say in 10 years it’s worth $200,000, I don’t have to pay any taxes on that $100,000 profit.

David Goldstein:

Sweet. So you could bill a luxury hotel?

David Wessel:

Indeed. So in the book I have an example of the Ritz-Carlton condos and hotel complex in downtown Portland, Oregon. And the condos are selling for beginning at $1.5 million up to $7 million each. And the investors in that project are basically reducing their capital gains tax by investing in that project. So there’s no requirement that the investment help the people in the community and no rules that you even have to assert that this is a project you’re only doing because of the opportunity zone the tax break.

Nick Hanauer:

So, at the end of the day, it was a scheme to turn low value real estate into high value real estate? I guess.

David Wessel:

Well, I don’t know. That might be a generous interpretation.

Nick Hanauer:

Yeah. Okay.

David Wessel:

How about the alternative? It was a scheme to cut the financing costs for some real estate projects that would’ve been built anyways.

Nick Hanauer:

Yeah. Wow. Okay.

David Wessel:

And the thing that’s interesting is that, because this thing was structured in a way with very little oversight from the Treasury, no limit on how many people can reduce their capital gains taxes by doing it, no cap on how much money the treasury can lose, the money is naturally flowing to those opportunity zones that were already beginning to draw some investment. The ones that were either already gentrifying or should probably never have been picked in the first place. And so we don’t have very much data, unfortunately, because the reporting provisions got stripped out of the bill as it went through the Senate legislative process. But some economists who are affiliated with the Joint Tax Committee on Congress, got a look at 2019 tax returns. And they found that 84% of all the opportunity zones got zero money and half the money went to the best off 1% of the zones. And that’s what you would expect, profit seeking investors are taking advantage of the program. No, they’re not breaking any rules. I have a line in the book about don’t blame the players, blame the game. There was nothing to lead them to do anything differently.

David Goldstein:

And this was a proposal that was sold as targeting geographic inequality. Right?

David Wessel:

Absolutely. So the interesting history of this proposal, and one of the reasons why I got interested in it as a book, is it didn’t begin at some think tank or some presidential campaign policy shop. It was the brainchild of Sean Parker, the guy who founded Napster, was involved in the early days of Facebook and was played by Justin Timberlake in the movie, The Social Network. And Parker, who I think was well intentioned, saw lots of places that he thought needed money, lots of rich people who had money, his original idea was not real estate, but to help seed new startup businesses. And so he created a think tank in Washington, the Economic Innovation Group, very successfully built a little coalition behind this proposal. And then one of his key moves was to enlist Tim Scott, the Republican Senator from South Carolina, who was pivotal to the 2017 tax bill and managed to get this included in that legislation.

David Goldstein:

Have you talked to Parker? Because I got about halfway through your book and I did not see any interview with Parker himself.

David Wessel:

Yes. I did talk to Parker.

David Goldstein:

And does he feel like he succeeded? I mean, does he feel like it’s worked?

David Wessel:

He basically looks at this the way a software entrepreneur would think of version 1.0, he thinks it’s worked and if there are problems we should fix them. One of the difficulties of having so little data is that people who like opportunity zones can and do cite examples of them being used for their desired purpose. I describe in the book, a guy in South LA, Martin Muoto, who’s doing affordable housing. He was in the affordable housing business before, he’s supercharged his little business by getting opportunity zone money. Downtown Erie, Pennsylvania is another place where it seems be being used for the desired purpose. So they cite those examples. The critics cite the outrageous examples like the Portland Ritz-Carlton. My view is from the reporting I did, that there’s more of the latter than the former, but Sean Parker hasn’t conceded that yet. And he hasn’t talked to me since the book came out.

Nick Hanauer:

Yeah. And I don’t know Sean Parker, but I suspect that you’re right, he was well intentioned. And if you are steeped in neoliberalism, as he, no doubt is, this theory of change makes perfect sense. Right? Is that the way you benefit the poor is by giving the right incentives to the rich and all will be well.

David Wessel:

Absolutely. And I think the other thing he believes, and I think this is similar to some of his peers in Silicon Valley is basically, “I’m pretty smart and I’ve been successful and I probably have better ideas than all those bureaucrats and social scientists in Washington.”

Nick Hanauer:

For sure.

David Wessel:

He talks about hacking the system. So he looks at this as a hack of the system. And that what he misses, I believe, is the benefits of the system. He shunned any opportunity to add into this proposal the kind of guardrails that a lot of the do gooders would have recommended and he rejected. And secondly, he way, way, way underestimated the size and aggressiveness of the tax avoidance community. So people who make their money, advising rich people on how to cut their taxes.

Nick Hanauer:

Right. Which is insanely pervasive.

David Wessel:

No, I mean, I went to this, in the book I described… When I was thinking about doing this book, I heard about, there was an opportunity zone expo at the Mandalay Bay Casino and Resort in Las Vegas. And I said to myself, “I don’t know if I’m going to take on this project, but if I do…” and I didn’t go to this Vegas thing with visions of The Big Short lurking in the back of my head, “I’m going to forever regret it.” So I go to this conference and it’s unbelievable. It is like witnessing a 21st century gold rush. The number of people there who either selling their services to rich people or rich people trying to figure out how to cut their taxes or people with projects looking for ways to get rich people to invest in them. It was hundreds of people and, it was a reporter’s dream, the most extroverted people you ever meet, who you take out your note book, and they’re saying-

Nick Hanauer:

Who’ve probably never met a reporter.

David Wessel:

… Well, the thing about these conferences is they say things from the podium that they would never say if you were interviewing them on TV, because it would be embarrassing. Like, “This is a dumb idea. I don’t think it’s going to help poor people, but it’s sure been good for my business. Aye.” And you sit there and say… So my favorite is the woman I sat next to from LA who told me, I asked her why she was there, and she said, well, a friend of her was in the real estate business. He asked her to run his opportunity zone real estate fund, but she’d turned him down. I said, “Why?” She said, “Well, frankly, I already have a boatload of money. I made a lot of money in real estate. I’m not interested.” So I said, “So why pay $500 to come to this conference and in Las Vegas?” And she said, “Well, I bought this in Andy Warhol painting shortly after he died. And it’s worth a couple million dollars more than I pay for it. So I’m thinking of selling the painting and investing the proceeds in an opportunity zone. So I wanted to figure out more about it.”

I wasn’t smart enough in that encounter to ask her what it was a painting of. But when I followed up with her later, and I’ve seen the painting since, it’s a painting three dollar signs, literally a painting of three dollar signs. So it’s just too good to turn down these kind of stories.

David Goldstein:

So what you’re describing at the casino was a free market allocating resources efficiently, right?

David Wessel:

I guess. Yeah, that’s right. I hadn’t thought of it that way, but yeah, that.

David Goldstein:

I mean, that’s the whole idea behind opportunity zones, right? We’re going to allow the market to allocate this capital and everybody will benefit and just free up the market to do its magic.

David Wessel:

Right. So the two things that they… there are two parts of it that I think they missed. One is, if you really want to use that mechanism to devote money to poor communities, you got to put more guardrails and target it more. That might not work, but at least you got to do that. And secondly, to quote a guy I know at The Kresge Foundation, which was interested in opportunity zones and then soured on them, Aaron Seybert, he came to the conclusion that just putting money into a poor community is not sufficient. You have to ask what the money’s for. So if you’re building, as I said, self storage facilities, that’s great for people who have a lot of junk to store, but you don’t create a lot of jobs. And in some communities, governors inexplicably designated university towns as opportunity zones, they show up as poor in the census because college kids don’t have much income, so there’s a little cottage industry of building luxury rental student housing for students whose parents can afford to rent them a place. They don’t have to live in the lousy dorms. And those people are getting opportunity zone of money. It’s as if they thought every rich person is a social impact investor. And why would you think that? I don’t think there’s any evidence.

Nick Hanauer:

Well, I mean, that’s just hardcore neoliberal ideology.

David Wessel:

Yeah, exactly.

Nick Hanauer:

Right? Again, that is what was taught, and continues to be taught in universities, that concentrated capital is the source of all prosperity in human societies. And when it’s allocated, magical, positive things happen, right? This is just straight up orthodoxy.

David Wessel:

Right. Exactly. Exactly.

Nick Hanauer:

Of course it’s nonsense, but there are classrooms filled with kids learning that today in America. So it’s not surprising.

David Wessel:

It’s more than that. It’s not just what’s being taught in schools, it’s the rhetoric of the Republican Party. So when you listen to Tim Scott, the primary sponsor of this legislation, you think that opportunity zones are solving problems that the great society failed to solve, that all we need to do is get government out of the way, let rich people invest, let the market work and everybody will live happily ever after. And when you listen to his version of this, you think that we cured poverty because of this legislation, even though it’s not really that big and just getting started. And so, that’s taken hold of a whole set of people, government is the problem. Begins with Ronald Reagan, but it’s being reinforced now by people like Tim Scott, the market is the answer, get government out of the way and the money will flow to solve our problems.

David Goldstein:

Okay. So speaking of getting government out of the way, let’s talk a little bit about how this was passed. How did Parker and his team do this?

David Wessel:

Parker funds think tank, the Economic Innovation Group. He hires two guys, one a Democrat, one a Republican, young 30 something Washington insiders to run it. They spend a couple of years laying the foundation for the problem, the problem being geographic inequality. The fact, which is true, that we have lots of left behind communities in the United States and the gap between prosperous and poor communities is widening, not narrowing. And so first they very skillfully identify the problem, they come up with some real good indices that locate which of the bad zip codes in the US. They bring Kevin Hassett, the Republican economist and Jared Bernstein, the Democratic economist into the thing. And they do this white paper, which they cite as if it’s the fifth book of the Bible, even though it’s rather vague.

And only once they’ve laid the groundwork for geographic inequalities of problem, do they pop up and say, “And by the way, we have this solution, opportunity zones.” They build a bipartisan coalition in Congress for this thing, I think in a couple ways. One is, it’s a great talking point, who could be against doing something that gets more money to poor neighborhoods? Most of the sponsors don’t ever read beyond the talking points. And Sean Parker himself turns out to be a pretty charming and effective lobbyist, helped a bit by his campaign contributions. But even more than that, he’s a very engaging guy. I talked to members of Congress who talked to him. And he enjoyed talking to members of Congress and bringing them on board.

So they have this legislation, it’s proposed in 2016, it’s going nowhere. Lots of bills are introduced in Congress. And then the key, as I said before, is Tim Scott very quietly gets it inserted into the Tax Cut and Jobs Act of 2017. So quietly that no national newspaper even notices it until a month after Trump signs the bill into law. And that was deliberate. Once they got it in the bill, they didn’t want to talk about it because that could only cause trouble. It never had a hearing. It was scrubbed in a very cursory way by the Joint Tax Committee staff. So there’s some changes made, but the Treasury was faced with a rather rough piece of legislation, had had the power to write some regulations, which it did, but the Trump Treasury wrote regulations, which, as the EIG guys like to say, were very tax payer friendly, that is more friendly to investors than to the poor people in the communities this was supposed to help.

Nick Hanauer:

Amazing, but not surprising. So David, tell us the story of how you came to this? Why did you write this book? How did you figure it out?

David Wessel:

I work at the Brookings Institution and one of my colleagues is a public finance economist named Adam Looney, who had worked in the Obama Treasury, who can get more exercised and morally outraged about small provisions in the tax code than anybody I’ve ever met. I mean, he would come into my office and describe how the distillery industry was ripping off the tax payers by… stuff. In fact, he proposed once that he should spend a year create a distillery and getting every tax benefit possible and then writing a book about it. So he mentioned this to me. I hadn’t heard about it. I was interested in this question of place based policies. And I thought, this is Brookings white paper kind of stuff.

And then he just mentioned in passing that Sean Parker was involved and was fact responsible for this. Well, suddenly it went from a white paper to, “Oh, this could be a good narrative.” And that’s what really turned me onto it. And as I said, went to Las Vegas, I didn’t know that would be the best reporting of the whole trip, Las Vegas. And it seemed like a good thing to do. I think it does tell a story about how Washington works in that a rich guy, let’s say he’s well intentioned, manages to spend a few million dollars and get some social program into law without much scrutiny. And now all these people are taking advantage of it while there’s all sorts of other programs, proposals that languish. I’m all for rich people having good ideas about how to fix our economy. I’m not for letting them write the rules and put them into law.

David Goldstein:

You hear that Nick? Well intentioned rich guys.

Nick Hanauer:

Yeah I know. Yeah, I know. I know. I know. Yeah

David Wessel:

Who could qualify? Who could qualify?

Nick Hanauer:

There’s somebody on this call that may resemble that remark.

David Goldstein:

You mentioned David, that you used a couple examples, I know in the book you mentioned Erie, PA and South Central LA where apparently these are going into census tracts that need the money. In those areas, do you know, is it actually improving the lives of low income people?

David Wessel:

Yeah, I think so. But here’s the point. Is it possible to use this for the intended purpose? Yes. Is there any requirement that it be used for that purpose? No. Does the bulk of the money go to those purposes? My judgment, subject to change if we get more data, is that the bulk is going to things that don’t need it. I spent a lot of time in Baltimore, which is a troubled city that, if any place deserved the money, and I didn’t find very many projects in the gritty neighborhoods of Baltimore.

In Erie, Erie is a fascinating place, it’s a very poor downtown, there was a grassroots… well, I shouldn’t say, there was a local business led effort to revive the downtown, spurred in part by a very unusual insurance company, Erie Insurance, which is based in Erie. It’s a New York Stock Exchange company, but all the voting stock is controlled by the family of the founders. Somehow they got a New York Stock Exchange, Fortune 100 company, but all the voting shares are in the founding family. And the recently retired CEO who married into the family says that some people wanted to move out of Erie and he said, “No, we’re staying in Erie.” And they put a lot of money into the downtown. Opportunity zones came along and they managed to leverage that to finance a project that was already underway.

SoLa Impact in South LA is a different story. Basically, I think they’re, as best I can tell, they’re improving the housing stock of South LA, they renovate and rent to Section 8 federally subsidized tenants, they have a fairly good reputation and because they got opportunity zone money, they are able to do more houses and they’re doing a little business incubator.

So I think in those cases, it is. And I did find one tiny project in Baltimore, it’s a block that looks like it’s completely bonded out. It’s six row houses with only one building still standing, the rest or look like Dresden after World War II. And the developer there got about $1.5 million of opportunity zone money to rehab. Those that’s basically of the smaller condos in Portland. So it gives you a sense of where the money’s going.

Nick Hanauer:

Yeah. But I mean, I think that the high level question, of course, isn’t can we find examples where the intent of the act was met, but rather how much an aggregate are we spending on this per program? And could it be spent better helping disadvantage people?

David Wessel:

Exactly. That’s exactly the right question.

Nick Hanauer:

That’s the question. Do you have any idea how much in aggregate this program is costing taxpayers?

David Wessel:

So it’s a guess, we’re guessing here. The program was very carefully structured so that it doesn’t “cost much” in the first 10 years. And that’s important because when Congress considers legislation, it looks at the 10 year price tag. And because the people have to pay taxes in 2026, that means that there’s some revenue in 2026 that makes 10 year costs look very low. I don’t know what it’s going to cost afterwards. My guess is, and I want to underscore guess, that somewhere around $75 billion to $100 billion has been invested in opportunity zones so far. And so all the revenue loss will come after the 10 year window. And so we know that some of those properties will be profitable and presumably a lot of the profits will avoid taxes, but it’s really hard to know without knowing what the next 10 years will be like. There are a number of other provisions that make it even more attractive to real estate.

Now, the trouble is that tens of billions of dollars doesn’t sound like a lot in the current context when Congress is debating trillion dollar bills. But when you look at the amount of money that’s spent on these place based policies aimed at poor people, it’s significant. And so Annie Donovan, who was at the Treasury and is now at LISC, the Low Income Support Corporation or something, she says, “I think the money lost to the Treasury on this would’ve been better spent if you said to the money, ‘we’re going to invest directly in minority and women owned businesses in poor neighborhoods.'” And I do sometimes think that running a system where you have to run this stuff through the tax code, with all the leaks and bins and people trying to siphon money off, the alternative is of course, just raise taxes on rich people and then the government can put the money where it thinks it want to go. We don’t have to run it through the whole tax system. And there are days when I think we should just do that. The trouble is it seems to be politically impossible so this becomes the alternative.

Nick Hanauer:

Yeah. So David, we would love to ask you our benevolent dictator question, which is, if you were in charge, what would you do? And I think the implication of that question is, would you amend this policy or would you eliminate it ,if you were in charge?

David Wessel:

Yeah. So in a first for me, I was asked to testify before a House Ways and Means subcommittee on this program and I was asked that question. And my shorter answer is we should try and fix it. And if we can’t fix it, we should repeal it. And by fixing it, I mean, I would have fewer zones and have them better chosen. I might give a bigger tax break to neighborhoods that really need it. I would put a lot more restrictions on what the money can be used for. And then the real question is, if you want to do this, the Treasury should have to approve an opportunity fund. It shouldn’t be just, anybody can file a thing, I’m an opportunity fund, invest the of money. I think that because place based inequality, geographic inequality is so strong, such a big problem, it’s probably worth experimenting with this. My gut is it’s not going to work, we should probably repeal it. But I would try and fix it first. We haven’t done a very good job of… this is not a well designed, well crafted well regulated experiment. And I would be willing to try to experiment with a better program before I gave up altogether. But if you asked me, do I think it’s going to work? I would say no.

David Goldstein:

And I presume you would impose reporting requirements?

David Wessel:

Oh, absolutely.

David Goldstein:

What’s the use of having an experiment that doesn’t produce any data.

David Wessel:

No, totally. Now, there is, to be fair, there is both foes and fans of opportunity zones agree we should have more reporting. Some of the people who are friends of opportunity zones want more reporting to the IRS, which then you have a lot of privacy rules that prevent the public and scholars from examining it. But, yeah, absolutely. I mean, we should do that no matter what, because otherwise we’re guessing. I have a pretty strong view that I’m right about this, but I stand to be my mind changed. So definitely more reporting.

And there’s been some academic work because, since 56% of the census tracts in the US were eligible to be designated, governors could designate up to 25% of the eligible tracts. The obvious social science here is to look at tracts that were eligible and not designated and compare them to tracts that were designated and see how the things worked. But you can’t see much unless you know how much opportunity zone money went into that thing. And for what? So I found this by just talking to people or some people bragged on their websites and there’s some public disclosure. But as a rule, you can see a building going up in an opportunity zone and unless somebody tells you, you don’t know whether it’s an opportunity zone funded project, or just a regular real estate project.

Nick Hanauer:

Yeah. Interesting. So the final question that we ask all our guests is why do you do this work?

David Wessel:

I learned at the Wall Street Journal and in doing stuff for National Public Radio, that people are really interested in the economy and often find it hard to understand what’s going on. So my goal is to find ways to tell stories that illuminate the economy for people so we can make the world a better place.

Nick Hanauer:

I love it. Well, thank you.

David Wessel:

Thank you.

Nick Hanauer:

Great talking to you. Thanks for your work.

David Wessel:

Okay. Take care. Thanks.

Nick Hanauer:

Bye-bye.

David Wessel:

Bye.

Nick Hanauer:

Again, I don’t know Sean Parker, but I suspect he was well intentioned. He’s richer than shit and he’s not a real estate developer, right? Opportunity zones are not making an economic difference to Sean Parker. So it’s incredibly unlikely that his play was, “Oh, I’m going to make some more money doing this.” If I had to bet, I would bet that he really did think, in that classically neoliberal way, that concentrated capital is the most important element in the economy. And if you just put it in the right places, everything will be fixed. Right? And that he really believed that by doing this, you would have these investments and places that required needed investment. And it would benefit everybody. I just, I really struggle to believe that he had some sort of nefarious self-serving purpose here. But you know, that’s what happens when you believed in neoliberal bullshit. And this is just yet another example of the way in which that ideology has shaped policy in ways that was sold as a benefit to everybody, but really only benefits the top 1% or 0.1%. That’s a classic instantiation of that.

David Goldstein:

Yeah. I think it gets beyond economics, Nick, our listeners, if maybe you want to go back and listen to our interview with Anand Giridharadas and the point that he makes about philanthropy that maybe instead of giving more, the super rich should just take less. Because you’re not necessarily rich just because you’re smarter than everybody else. I know you, Nick, you’re really smart. You’re smarter than most people. But my God, you were so lucky and you admit that. And even really smart people may make mistakes, they don’t know everything. So the idea that somebody like Sean Parker can step in and say, “Ah, everybody else got this wrong. The problem with all of these place based tax credits in the past was that there were too many restrictions, too many regulations, too much reporting. If we just remove all that bureaucracy, the market will direct this money where it needs to go.” And of course, as usual, the money goes to benefit the very wealthy.

Nick Hanauer:

Yeah. But Sean Parker is neither the first nor the last-

David Goldstein:

No.

Nick Hanauer:

… wealthy person to have had a big impact on this kind of policy, for better worse.

Speaker 3:

Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to subscribe, rate and review us wherever you get your podcasts. Find us on Twitter and Facebook @CivicAction and @NickHanauer, follow our writing on Medium at Civic Skunk Works and peek behind the podcast scenes on Instagram @PitchforkEconomics. As always, from our team at Civic Ventures, thanks for listening. See you next week.