Why D.C. Is the Richest Region in the Country

All that marble in D.C. shouldn't make you feel patriotic.

The Senate did something this past weekend it hasn't done in four years: passed a budget. The law requires the Senate to pass a budget, but Congress often ignores its own laws. For most of Barack Obama's presidency, a series of continuing resolutions kept the money—your money—flowing. Now the Senate wants to add a trillion dollars of new taxes, even more than President Obama seeks. Despite our growing debt, the Senate wants to fund things like the Senate barbershop, which loses a third of a million dollars every year.

It's like they live in a private bubble.

Politicians say, "I'm going to Washington to serve others." Maybe they mean to. But after most "serve," they never leave. When I visit Washington, I see politicians and bureaucrats serving themselves.

When the housing bubble burst, home prices dropped in most of America, but not in Washington. Our capital feeds off federal spending, and politicians won't allow that bubble to burst.

One result is that, today, for the first time, most of America's richest counties are in the Washington area. Of the richest 1 percent of counties in the U.S., 43 percent surround the nation's capital city.

Nick Sorrentino, creator of AgainstCronyCapitalism.org, notes that average total compensation for a federal employee is now about $120,000, and the gap between government pay and private pay has been growing.

It's not that Washingtonians are smarter or more productive than the rest of us. It's that as government grows, more money flows to lobbyists, trade groups and others who live close to those who pass out your money. Government is a parasite—but a parasite that helps its friends. The way people get rich in Washington is not by inventing things, but by being good at schmoozing and manipulating the bureaucrats who control your money.

Tourists visit Washington and admire the beautiful buildings. All that marble once made me feel patriotic, too, but now I get angry.

Unions claim workers are "under"-paid. But today's union headquarters resemble palaces. The biggest teachers union, the National Education Association, built a $100 million Washington headquarters that it calls "an environmental oasis." The AFL-CIO's beautiful lobby features a giant mosaic made of marble, glass and gold. When I tried to take pictures, so TV viewers could see the elegance, I was told to leave.

Government buildings are grand, too, even new ones like the Reagan office building. "It's very much like Versailles before the French Revolution," says historian John Steele Gordon. Washingtonians have become like the French nobility, who spent their lives in the palace at Versailles "and didn't know much about what went on outside that world."

"But the real royalty is not in Washington, D.C.," Rep. Alan Grayson, D-Fla., tells me. "It's on Wall Street."

It's true that there's more wealth on Wall Street, but Gordon points out that there's a big difference between those fat cats and Washingtonians. "In the private sector, if you find a way to cut costs, you're a hero. If you find a way to cut costs in the (government) bureaucracy, you're a goat."

You're a "goat" because cutting waste hurts the lobbyists who feed off taxpayers. With trillions of dollars at stake, corporations and special interests would be crazy not to lobby. Lobbyists and taxpayer-funded special privilege won't go away unless big government does.

We could improve America's future just by recognizing what so-called "public choice" economists started to realize around the time of World War II: that government isn't just a "public servant." It's not a demon, either. But government and its employees are selfish, like anyone else. That explains most of their behavior better than occasional shifts to the political left or right.

We all tend to overspend and act lazy when we can get away with it. In the private sector, though, that eventually means that you get fired or realize you're depleting your bank account. In Washington, the Fed just prints more money.

As long as Washington spends other people's money, there will be little incentive for them to be prudent—or humble.