Washington’s Wealth Boom
The new top three [wealthiest counties in America according to per capita income] are now Loudon County, Virginia; Fairfax County, Virginia; and Howard County, Maryland. All three are suburbs or exurbs of Washington, D.C. In 2000, 14 of the 100 richest counties were in the Washington, D.C., area. In 2007, it was nine of the richest 20.
While the D.C. metro area hasn’t completely escaped the recession, it’s doing much better than most everywhere else. Real estate advisers Grub & Ellis Company recently ranked the D.C. metro area the top market in the country for commercial real estate investment. Investment advisers are high on D.C. area real estate even in down times, because they know the federal government’s only going to get bigger. That means more federal employees, more grantees and contractors, and more wealthy lawyers and lobbyists setting up shop inside the Beltway — both to get a piece of the federal budget (or, more recently, the $7 trillion-and-growing pot of federal bailout honey), and, as the federal regulatory state expands, to lobby for regulations most favorable (or, least unfavorable) for their clients.
The problem is that, save for the tech corridor in D.C.’s Virginia exurbs, the Washington Metro area doesn’t actually produce anything. Washington doesn’t create wealth, it just moves it around — redistributes it. As government grows and takes control of more and more of the private economy — either through spending, regulation, or taxes — more and more wealth that’s created elsewhere comes to Washington to be devoured.
The Washington wealth boom is the result of the massive expansion in government over the last 10 years, which has populated the region with an increase in well-paid federal employees, and wealthy federal contractors and lobbyists.
It’s axiomatic, really, that the more powerful government is in our lives, the more money that there is around the seat of power. The combination of a massive global recession, a multi-trillion dollar federal stimulus, and the impending handover of the executive branch to a Democrat eager to consolidate control of the economy in Washington do not portend a reversal of this trend any time soon.
While neither Radley nor I are directly involved in government service (disclosure: I was once a federal contractor and was a federal employee as an Army officer) we’re part of the Washington economy as well, studying and commenting on public policy for a living. It’s worth noting, too, that the figures are somewhat skewed by the high cost of living in the area, which artificially raises “income” while not necessarily improving living standards.