Government Spending

D.C.'s Wealth Boom Projected to Get Boom-ier

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I wrote a column last month about how Washington, D.C. is not only largely escaping the recession, the D.C. metro area has become the wealthiest region in the country—a troubling development, given that the largest employer and chief industry here is government.

Business Week reports that it's only going to get worse.

In fact, Moody's Economy.com estimates that metro Washington's economy will actually grow 2.5% from mid-2008 through mid-2010. New York's economy is expected to shrink 4.2%…

Washington is getting a boost from government spending to fight the recession and fix the financial system, as well as the ongoing expenses of fighting wars in Iraq and Afghanistan and promoting homeland security. While President Barack Obama pointedly left Washington for Denver to sign the $787 billion stimulus package on Feb. 17, locals expect the metro area to garner a big share of the dollars.

The cost of course goes beyond the price tag of the bailout. All of the money spent lobbying for a cut of the largess is also money sent to Washington that could have been spent actually creating wealth. The article also points to a looming brain drain, as the country's best and brightest no longer fan out across the country to innovate and thrive in the private sector, they're going where the money is.  Which means they're converging on D.C. for lucrative jobs with government contractors.

Job-seeking Wall Streeters who jump on Amtrak's Acela to Washington may be dismayed to find that the maximum pay for an FDIC bank review examiner is close to $180,000. That's great for most folks, but paltry next to the bonus-swelled compensation many bankers are used to. The pay can be a lot better, though, at the Beltway Bandit consulting firms that are ramping up to assist the FDIC, Treasury Dept., and others. Consulting jobs for senior specialists in finance "can pay north of $200 an hour," says Andrew Reina, a practice director for risk consultant Ajilon Solutions.

Companies such as Computer Sciences Corp., Science Applications International Corp., or SAIC, and Booz Allen Hamilton employ tens of thousands of people in the Washington area and continue to expand. Even before the current crisis, professional and business services, which include private-sector lawyers, accountants, engineers, and consultants, made up 21% of metro Washington's annual economic output, even more than the 20% made up by government itself, according to a BusinessWeek estimate based on government data. The financial crisis "creates opportunities for companies like ours" to provide expert assistance, says David Booth, Computer Sciences Corp.'s president of global sales and marketing…

According to George Mason University's Center for Regional Analysis, metro Washington leads the nation in the share of jobs that are in high-tech and the share of workers with advanced degrees.

The problem of course is that all of that money and talent isn't being harnessed to produce goods and services consumers actually want.  It's being used to fulfill the wish lists of the politicians who hand out the checks.

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  1. That’s the way it goes in an empire. Looted wealth piles up in the capital.

    -jcr

  2. This is too depressing. Let’s lighten this place up: name your favorite serial killer. Mine’s Albert Fish.

  3. But, don’t we want all The Smart People in one place. Its just _so_ inefficient to have them scattered throughout the country, when they can rule us from the same cocktail parties.

    You know, I’m not sure I’d want someone who went to Washington because “that’s where the action is” to be my boss, broker, etc.

  4. Good choice, Warty. Mine’s Carl Panzram.

  5. He’s not my favorite, because he tried to last-minute weasel out of his elaborate suicide-by-government, but Ted Bundy is probably the serial killer who’s most on-topic. His cozying up to local politicians seems to have kept his name low on suspect lists and bought him a couple dozen extra corpses to fuck.

    That’s some fancy rent-seeking.

  6. You’re going to have to get up early to beat Jeff Dahmer at serial killing. Your average psychopath isn’t suave enough to have cops returning teenage boys to your death dungeon after they escape and are bleeding from their anuses.

  7. All of the money spent lobbying for a cut of the largess is also money sent to Washington that could have been spent actually creating wealth. The article also points to a looming brain drain, as the country’s best and brightest no longer fan out across the country to innovate and thrive in the private sector, they’re going where the money is.

    Where is Reason’s main office located again?

  8. Give me a C!
    Give me an O!
    Give me an M!
    Give me an S!
    Give me an O!

    What does that spell?

  9. Ted Bundy for me. But what about the guy who decapitated his mother, violated the corpse’s throat, and stuck the head on his mantelpiece – what was his name again?

  10. what was his name again?

    Richard Nixon?

    -jcr

  11. But what about the guy who decapitated his mother, violated the corpse’s throat, and stuck the head on his mantelpiece – what was his name again?

    That was like half the guys I went to high school with. Adolescent shit.

  12. I live about an hour outside of DC. Even though I don’t have any government clients, this post would still explain why I really haven’t really noticed the recession. I’ve actually kind of been wondering what the hell the big fuss is about.

  13. David Berkowitz, because his reason is hilariously ridiculous. Honestly, your neighbor’s dog is possessed by a demon, tells you to kill people, and you think it’s a good idea? Am I the only one looking for any excuse to shoot my neighbor’s dog for excessive barking? If I heard something along the lines of “rhoot random rinnocents,” I would not hesitate to pull an Old Yeller on his ass.

  14. I had no idea Davey and Son of Goliath was based on a true story.

  15. Count Chocula.

  16. The problem of course is that all of that money and talent isn’t being harnessed to produce goods and services consumers actually want.

    Aw, shoot. I was hoping the lesson was going to be that if we could make the whole rest of the world like Wash., D.C., we could all be rich.

  17. God is my favorite serial killer… he’s killed billions to this day, and he remains at large!! 😉

  18. America has to cut back while DC sucks the blood from the rest of America.

    Give it a year or two and there will be more than just Tea Parties.

  19. Wow PT, that’s some original and witty humor. I love sophomoric humor as much as the next idiot, but isn’t it way past your bedtime?

  20. Cuernimus, did you ever think of going into law enforcement.

  21. Wasn’t the city of Rome itself the last to go?
    Somebody needs to cut off DC’s water supply.

  22. Wasn’t the city of Rome itself the last to go?
    Somebody needs to cut off DC’s water supply.

    Careful, ed, that could be construted to be a threat to the President, get you pulled over, arrested, then have a visit from the Secret Service to make sure you aren’t part of same hate group.

    Just wait for a law that makes it illegal to criticize any Obama appointed official or a member of Congress, shoved through a compliant majority on Congress, no longer willing to deal with the little people…

  23. paleotarian | February 23, 2009, 7:15pm | #
    […]
    Where is Reason’s main office located again?

    Editorial & Production Offices:
    3415 S. Sepulveda Blvd.
    Suite 400
    Los Angeles, CA 90034
    (310) 391-2245

  24. Where is JOE BOYLE these days?

  25. Cuernimus, did you ever think of going into law enforcement.

    I have thought about how being sheriff in a small town would be a really sweet gig, pretty much just sitting on your ass all day and getting paid for it. As for shooting the neighbor’s dog, if you’ve never thought of killing something firing off over 70 yips/minute when you are trying to sleep, you have patience worthy of song.

    Where is JOE BOYLE these days?

    Quit posting on account of the joe pile-on.

  26. Wasn’t the city of Rome itself the last to go?

    The capital of the eastern empire had been moved to Constantinople and the western empire to Ravenna long before the western empire fell in 476. At that point, Rome was largely depopulated.

  27. I was wondering about the budget that pays for all the extra brain power President Obama has crowded into the Executive offices. Not just the Czars and Czarinas, but staff. I understood folks were doubled and tripled up. Anyone know where I can find that kind of info?

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