Washington Is the New Wall Street


Pages: 1 2

Washington got richer while America got poorer. The contrasting trajectories aren’t coincidental.

The Washington, DC-area has just eclipsed Silicon Valley as the most prosperous metropolitan market in the nation. The median income for DC-area households stood at $84,523 last year. Nationally, median household income was $50,046. Encircling America’s wealthiest city are America’s wealthiest counties. The three richest counties in the United States surround the nation’s capital. Nine of the top fifteen counties also reside within Washington’s neighborhood.

Why is Uncle Sam suddenly Daddy Warbucks?

As recently as the 1990s, Washington, DC distinguished itself as the “murder capital” of the United States. Now it’s the money capital. Some point to the heavy presence of lobbyists, lawyers, and politicians in the region. But when wasn’t it this way? The capital has more capital now because the federal budget has ballooned so rapidly. It took 200 years for federal spending to eclipse $1 trillion in 1987. It took just fifteen more years for it to reach $2 trillion in 2002. Just seven years later, in 2009, federal spending expanded to more than $3 trillion. And now, just two years later, a $3.8 trillion budget quickly approaches the $4 trillion benchmark.

Despite talk of spending cuts from both Congress and the White House, federal spending is actually up in 2011. The summer’s debt-ceiling agreement, and the spring’s ballyhooed Boehner budget cuts that averted a government shutdown, didn’t cut anything—at least not yet. For the first nine months of the year, Washington spent $120 billion more than what it spent for the corresponding period last year. That is a five percent increase. Just as in Greece, where public employees riot over “austerity” measures that have resulted in a 7 percent increase in state spending this year, American pundits such as economists Paul Krugman and Robert Reich decry illusory spending cuts.

It has been an era of austerity and budget cuts in America—just not in Washington. In the decade leading to Obama’s presidency, federal pay rose 58 percent. The spike has been even more dramatic the past three years. The number of federal workers making in excess of $150,000 has more than doubled during the Obama presidency. The average annual salary and benefits package for federal workers are nearly double those of their private sector counterparts. The growth of Washington-area wallets is a direct result of the growth of Washington’s budget.

The contrast of rising bureaucrat income with falling citizen income is jarring. Median household income dropped seven percent the last decade, the first decadal decline since the Census Bureau began tracking the metric more than a half-century ago. The number of Americans living in poverty is the most in two decades. Unemployment? Inflation? Deficits? Up, up, and up. In the private economy, unlike the government economy, the cuts really have been draconian.

Pages: 1 2

  • Rifleman

    This is the number one clue that the flea baggers are full of it, and just soros/union/dp tools. They ignore the problem and go after a symptom, one that just so happens to be an old-school marxist target. American commies have been railing against "Wall Street lackeys," since the early 20th century at least.

    • Herman Caintonette

      The fatal flaw in Flynn's tendentious analysis (and, for the most part, the Tea Partiers) is that he believes that Washington is the core problem. OWS is going after Wall Streeters because they are the ones who have been buying up our politicians. Take money out of politics and create a mechanism for accountability, and you restore the Republic.

      • Rifleman

        As long as there are political favors, people will find a way to buy them, and the politicians and bureaucrats that dispense them. To take money out of politics you have to take their power and spending.

  • sedoanman

    The shift is not recent; it came long ago. When the Great Depression hit, Old Man Kennedy correctly predicted that power would move from Wall Street to Washington, and managed to get a political appointment out of Roosevelt.

    Working on the West Coast, I had many occasions to travel to D.C. over the period from 1972 to 2002, and on every trip I was amazed at all the construction going on. Through good times and bad, it didn't seem to matter.

    • http://www.flynnfiles.com Dan Flynn

      Ironic that you should cite the Kennedy patriarch: I planned on using the very quote you reference in the article as a sort of prophetic historical reference point for political entrepreneurs overtaking market entrepreneurs. Alas, it didn't make the final cut. I almost fell off my chair when I read your comment. Amazing. And as a former DC-area denizen, I too was amazed at the constant construction. My neighborhoods changed even when I didn't move.

      • gatekeepbeta

        Agree here, good points guys. Muay Thai

  • StephenD

    Stick around. Just wait until we're asking the Federal Government to maintain order in our streets and they oblige with Martial Law. You think we pay a lot now….

  • http://www.facebook.com/michel.richy.7 Michel Richy

    Researchers have found that the mind can rearrange itself when encountered with new difficulties, even through maturity. Based on this research, Lumosity's workouts are designed to practice a range of intellectual features, from working memory to liquid intellect.

    fun for brain