The landmark Blackstone Hotel in downtown Chicago, which has hosted 12 U.S. presidents, opened in 2008 after a two-year, $116 million renovation....Be sure to visit the link for more depressing details of how another program intended to help the poor, does little more than enrich private enterprises.
What’s surprising isn’t the opulent makeover: It’s how the project was financed. The work was subsidized by a federal development program intended to help poor communities.
The biggest beneficiary of taxpayer help for the Blackstone revamp was Prudential Financial Inc., the second-largest U.S. life insurer. The company got $15.6 million in tax credits from the U.S. Department of the Treasury for helping to fund the project, according to Chicago city records, Bloomberg Markets magazine reports in its March issue....
Building high-end commercial projects goes against the intent of the New Markets program, says Cliff Kellogg, a former senior policy adviser at the Treasury Department who helped design New Markets.
“Things like luxury hotels are entirely contrary to what we set out to do,” says Kellogg, who’s now a bank consultant. “Some hotels may create jobs and spur other nearby investment, but you have to ask if these projects prevent worthwhile ones from getting done.”
Such stories reinforce my pessimism about government's ability to carry out complex schemes designed to help the poor. I really think we should just use Social Security as the model of a highly effective and efficient anti-poverty program: Define a simple criteria for who needs help, write that person a check, collect taxes to cover the checks.
Anything beyond that and we are just as likely to create opportunities for the rich and well-connected to game the system as we are to actually help any poor people.