In this issue, the Department highlights a policy initiative identified with supply side economics and the Reagan Administration: urban enterprise zones. Richard Mounts, currently a program director specializing in energy and economic development with the U.S. Conference of Mayors, offers his views of pending legislation which would employ a variety of tax incentives to induce businesses to locate in zones designated by the Secretary of Housing and Urban Development. As Mounts points out, the proposals are quite in keeping with the spirit of deregulation and the belief that previous federal urban programs have been ineffectual, wasteful, and frequently counterproductive.These criticisms notwithstanding, Mounts is skeptical that the proposed zones (&dquo;shameless free enterprise&dquo;) will greatly improve matters. They focus on only one facet of the phenomenon of urban decay: economic deterioration. Moreover, previous attempts to use tax incentives to shape urban outcomes give little reason for optimism. In any event, Mounts suspects that the success or failure of the zones will be heavily (if not totally) dependent on the fortunes of the general economy. Ultimately, however, Mounts' criticisms rest upon a conviction that economic development through unfettered capitalism is not likely to undo the social and cultural concomitants of urban blight (and may even worsen them, even as some believe that it has contributed to their emergence).A former administrative assistant for Los Angeles, Mr. Mounts has done graduate work in political science (University of Colorado-Boulder) and worked for the Washington offices of the National League of Cities and the Center for Renewable Resources prior to taking his current position. The views presented here are those of the author and do not represent the official stance of the U.S.
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