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JACK KEMP'S BAD IDEA
By Lee Smith

(FORTUNE Magazine) – You've got to feel a mite sorry for Jack Kemp, Secretary of Housing and Urban Development. HUD's name is mud, splattered by allegations that under Kemp's predecessor, Sam Pierce, the department's primary interest seemed to be enriching friends of the Reagan Administration. Kemp wants to get the focus back on the poor, and he has urged the House Ways and Means Committee to designate blighted inner-city neighborhoods as enterprise zones. This would reward the creation of new businesses and the expansion of old ones through tax breaks. The poverty rate in the inner cities averages more than 20%, and Kemp has strong bipartisan support. The move to set up such zones could be unstoppable. Unfortunately, Kemp's well-intentioned idea might not help the unemployed. All the evidence indicates that lack of skills and not lack of jobs keeps people out of work. In the meantime, the zones could cost the Treasury $5 billion in lost taxes over ten years. The better way to help those on the bottom would be to spend more on job training.