Washington: A paradise for parasites

While the rest of the nation suffers from horrendous unemployment numbers and stagnant, if not vanishing wages, one city seems to be awash in money. Washington suburbs are booming as that city sucks up tax dollars from the rest of the nation to feed a Leviathan that seems to be thriving quite well.

From the Washington Post:

Washingtonians now enjoy the highest median household income of any metropolitan area in the country, and five of the top 10 jurisdictions in America - Loudoun, Howard and Fairfax counties, and Falls Church and Fairfax City - are here, census data shows.

The signs of that wealth are on display all over, from the string of luxury boutiques such as Gucci and Tory Burch opening at Tysons Galleria to the $15 cocktails served over artisanal ice at the W Hotel in the District to the ever-larger houses rising off River Road in Potomac...

A white Mercedes sits next to a black Jaguar in the student parking lot at the local public high school, Langley High. At the community Easter egg roll, children grab eggs filled with chocolate and tiny gemstones like blue topaz and citrine.


The fuel that fueled this bonfire of vanities? Us. Must be nice out there. Real estate values are holding up quite well; vacancy rates in office buildings are quite low, and the purveyors of luxury are counting their (our) money all the way to the bank.

As the column makes clear it is the growth of the federal government that has created these luxe havens isolated from the woes of the rest of America:

Forty years ago, few people thought of Washington as a place to get rich. It was a staid town where a third of the residents earned modest but steady paychecks working for the federal government.

The new Washington is a global business hub with thriving technology, biotech and communications industries. Only 12 percent of workers are federal employees. But the federal government remains an engine of job creation, outsourcing its tech support and other services to contracting firms ringing the Capital Beltway, a phenomenon that exploded in the years after 9/11.

More than $80 billion in federal contracting dollars will flow to the region this year, up from $4.2 billion in 1980, according to Stephen Fuller, director of the Center for Regional Analysis at George Mason University. Adjusted for inflation, that's a seven-fold increase. A third of the region's gross regional product now comes from federal spending.

But that tide is likely to slow because of a $1 trillion debt-reduction package approved earlier this month by Congress and President Obama. In the coming months, a bipartisan"supercommittee" will be searching for another $1.5 trillion in savings. Defense contractors are already bracing themselves for deep cuts in military spending.

Federal cash has been "the major catalyst for economic growth in the last 30 years," said Rep. Gerald E. Connolly (D-Va.), former chairman of the board of supervisors in Fairfax County, where companies garner more federal contracting dollars than anywhere else in the country. "Clearly that [federal] presence and that pattern of investment has transformed the economy."

Many taxpayers no doubt would prefer the sleepy (and un-airconditioned) Washington of years past when the bright, eager, and greedy gravitated not towards Washington to make their fortunes but towards Silicon Valley and other hot spots of innovation. Now, wealth can be created not by new products but by working the Rolodex to tap into the vast stream of tax dollars being sucked into the black hole of Washington.

Ironically, the article notes that the wealth gap between high-paid workers and low-paid workers in the wealthy suburbs of Washington is among the highest in the nation. Don't Democrats decry this wealth gap? Or is it only a campaign point to demagogue when applied to private industry? Do fat cats only live in New York City?

While the Tea Party has made strides in putting Leviathan on a diet, much work remains to be done. This is no time to rest. The article points out that there is a new mood in town. The wave of Republicans are seeking a rollback. But what is Obama doing? Despite his claims that he will overhaul regulations to spark job growth, the only job growth that seems to be happening is in the government work force (and the various private sector outfits that also feed from this trough): the regulation business and regulatory jobs are booming under Obama.


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