Tuesday, May 29, 2007

How to Re-Populate Detroit: Urban Economic Opportunity Zones by Akindele Akinyemi


If we are in the business of re-populating Detroit we need to take a look at how poverty has ravaged our city. I have written several articles on poverty. Instead of leaving poverty we should fight to eradicate it here in Detroit.

Poverty is not created by people who are poor. They are the victims. Poverty has been created by the present economic and social system that we have designed for the city. It is the institutions that we have built, and feel so proud of, which created poverty. It is the concepts we developed to understand the reality around us, which contributed to the creation of poverty, made us see things wrongly, and took us down a wrong path, causing misery for people. It is our policies born out of our reasoning and theoretical framework, with which we explain interactions among institutions and people, that caused this problem for many human beings.

The most important step to ending poverty in Detroit is to create educational opportunities that will lead to employment and income opportunities for the poor. But orthodox economics recognizes only wage-employment. It has no room for self-employment. Yet self-employment is the quickest and easiest way to create employment for the poor. I have been arguing that credit should be accepted as a human right, because it is so important for a person who is looking for an income. Credit can create self-employment instantaneously. Why wait for others to create a job for you? A person can create his or her own job.

This is so much more convenient for women who would prefer to work out of their homes. We are so much influenced by socialized economics that we forget that our forefathers did not wait for someone else to create jobs for them. They just went ahead in a routine manner to create their own jobs and incomes. They were lucky. They did not have to learn economic theories and end up with a mindset that the only way they can make a living is to find a job in the job market.

A big step towards eliminating poverty is to make sure that we Detroiters become financially literate so we can offer financial services that will even benefit the poorest people in the city, that nobody is rejected by a bank on the ground that he or she is a poor person.

Notice I said becoming financially literate and NOT giving away handouts..that is a HUGE problem in our community. We develop programs to give, give, give and never TEACH to CREATE opportunities for ourselves and family. Constant giving is a form of welfare.

Detroit has to change the way we do business. This is why I am always talking about electing Christian leadership with free market ideals to the Detroit City Council.

We can eliminate poverty in our community by understanding how virtually every social pathology, which contributes to sustained poverty is financially underwritten, if not encouraged, by government policy.

For example:

City Government regulations prevent poverty-stricken residents from entering into business because they require small capital start-up costs. Taxi driving is an example of this.

City Government-operated schools deliver an astonishingly poor education, and poor people are unable to receive vouchers which would allow them to attend better schools. Also, they cannot afford to move to more affluent suburbs, which could at least offer adequate public schools.

City Government monopolies on police and corrections have often failed to keep poor neighborhoods even minimally safe.

City Government building codes have escalated the cost of housing to the point of virtually drying up the construction of new low-income dwellings.

Perhaps most damaging have been the government income support mechanisms which, until very recently, gave young mothers life-sustaining benefits on two conditions: Do not work and do not marry. This occurred despite study after study which showed that unemployed, unmarried motherhood strongly correlates with lifelong poverty for both the mother and her children.

Together, these policies make it extremely difficult for residents to improve themselves, thereby creating the psychology of despair which characterizes Detroit.

The Detroit City Council, Detroit State Representatives and State Senators must take leadership and develop an element that will implement change of this vicious cycle of dependence forever.

The idea of government and the free market working together sounds either like a love song or a novel title. It is neither, but it is what we should be striving to do in Detroit as well as other urban areas across Michigan. I propose the erection of an Urban Economic Opportunity Zone that will take Michigan's most distressed urban locations and both reinvigorate and reinvent them. We want to make them enticing to employers and developers by declaring them tax-free zones.

Our Michigan Legislative Black Caucus should be right on top of this without question.

Within this free market zone we will be working in a public-private partnership for one purpose, to stimulate jobs and community development by making certain blighted urban areas so attractive to employers and developers that they cannot afford not to come in.

Within this zone we will not be skirting on the tax issue. We will waive taxes for up to 12 year - all taxes. If one chooses to live in one of these opportunity zones, we will waive personal income tax for the residents. We will waive corporate net-income tax, the capital stock, and franchise tax. We will also waive the sales tax for goods used and consumed by businesses in the area. By waiving local, real estate, business, sales, and income taxes, this will be a tax-free zone for its residents.

Our community development financial institutions, community development credit unions, crime prevention grants, charter school grants, abstinence education programs, and family savings accounts are all under our Project for Community Building, which is targeted for the Urban Economic Opportunity Zones.

Detroit must begin to believe in the free market and the free enterprise system if it wants to eradicate poverty in the 21st century.

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