City Journal Winter 2016

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Aaron M. Renn
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Agree entirely that Washington as America's new second city is a loser for America, both because that status is dependent upon regulatory intrusiveness (as noted in the article), but also for another reason -- the swaggering military. Following orders and doing what one is told are not prescriptions for global innovation. In the same vein, I suspect that much of the job growth and company formation discussed in the article are little more that well connected former military siphoning off tax dollars. Many of these companies could not make it anywhere else except in the DC Region because they haven't a clue how to produce goods or services that anyone would want to buy.
While there is a lot of truth in this article, the conclusion is misguided. It's not the regulatory state that has spurred growth so much as war spending. In the early periods of growth, Renn neglects the effects of the Civil War, which brought both former slaves as refugees and entrepreneurs to the city during the war years and afterwards. Not just World War II but the Cold War, under Reagan as well as others, further stimulated the region's growth. Nothing Obama has done to regulate markets approaches the buildup of security efforts in the aftermath of 9/11, as well documented in the _Washington Post_. If the size of the military did not grow greatly, the number of private contractors did, a group that was especially hard hit by the sequester. We have a mixed economy. The public sector is not going to disappear any more than the private sector will. Both sides have been working at high speed in the Washington region over the past decade and more. It's not surprising there was a boom.
I'm spending a week in Arlington, VA with frequent excursions into the District.

Coming as I do from depressed America, it's like visiting another country.

In Arlington, the 1950s ranches can't be torn down fast enough. Mini-mansions on 1/4 lots are sprouting like mushrooms. I walked four blocks in NW DC the other day and counted 200 cars, 4 American-made and at least 50% BMW or M-B. There are two Lamborghini dealers within three blocks of each other.

The opulence is amazing. And I'm no stranger to the Emerald City, I've lived in Manhattan, SW London and VIII Paris.

It's incredible.
heya, GeorgeTown Prof. One would suggest that you re-read the article. good luck.
It was some time during the presidents second year in office, I was on I395 southbound cutting through downtown D.C. from Maryland, and just as I passed the power plant on my right, what normally opened up into a less than impressive view of the Capitol I was instead greeted by probably the creepiest thing ever fixed to a billboard.

A detailed graphic of Lockheed's drone, the unmanned aerial assault vehicle took up most of the real estate on the billboard and looked absolutely dreadful. But it was the caption "Peace from above" that really made this a real life 1984 moment. As I made my way around town I saw that the drone billboards were everywhere. It was clear they weren't selling us something, but telling us something, and it was then that I became fully aware of where I was.
The parasite flourishes. The host fades away.
The parasite flourishes. The host fades away.
The parasite flourishes. The host fades away.
- Chicago
Chicago still has Washington beat, no matter what Mr Renn has penned! Just type this in your search engine query box: "World's Most Economically Powerful Cities"
Kenneth T. Jackson February 06, 2013 at 5:44 PM
This article does not mention that Washington lacks real money and real wealth. It has a million upper middle class lobbyists, regulators, and high level government employees, but DC lacks the concentration of billionaires, hedge fund managers, and entertainment moguls that dominate New York, London, and Los Angeles. So the median income statistics hide the fact that it lacks both rich and poor in great numbers.
Meanwhile, America’s current and former Second Cities, population-wise—Los Angeles and Chicago—are battered and fading in significance.

Good Lord. Either of those cities eclipses Washington's importance two-fold, with ot without accounting for politics.

DC-- the master of the chip on the shoulder syndrome
This article was both informative and disturbing. If DC is to embrace this Second City status, and meet increasing demands, one thing it must do is raise height limits. This policy reflects more than anything its hesitance about "going global." Too bad it doesn't feel such hesitance on other aspects of its own growth.
Georgetown Professor February 05, 2013 at 2:02 PM
This article and the comments it is inciting are basically scapegoating and hate speech against decent people who live in the District of Columbia.

You can't point to an entire region's output and say that's just the fruits of corruption or blood-sucking regulation. You can't say DC's growth is illegitimate any more than the New York metro area's is because of excesses on Wall Street or LA's boom because of violent Hollywood movies (or the explosion of online porn).

71% of DC's economy is not related to the federal government. The District has growing industries not directly related to government, especially in the areas of education, finance, public policy, and scientific research. Georgetown University, George Washington University, Washington Hospital Center, Children's National Medical Center and Howard University are the top five non-government-related employers in the city as of 2009. DC is the most educated state in the country, with 28% having an advanced degree (compared to 10% nationally).

This is in spite of the fact that residents of the city itself have much less voice than the rest of the country in national affairs. We have no voting representation in the House, no Senators, and our budget and all our laws must be approved by our unelected overseers in Congress who generally don't share our values and don't care about our preferences.

Congress gets to say how we spend not only the money we pay into the federal tax system (without our input) but also our locally raised tax revenue.

Yes, the DC region is a boomtown, but it shouldn't be an excuse to demonize the bright, talented people who live here and work hard to earn a living, some in public service, most in the private economy.
This article is sortof simplistic.

There are many different types of people in DC.

The author (and may posters) seem to think everyone in DC is some sort of overpaid bloodsucking ghoul, getting immensely rich off the taxpayer.

This is simplistically stupid.

The big corporations are going to get rich no matter where they are headquartered.

Doesn't matter if it's in DC, Spokane, or Dubai.

There are many very hard-working people in DC.

It's one of those towns where many people work 70 hour plus weeks.

It's expensive to live here. To get a 2 br condo or rowhouse will set you back $500,000, or considerably more if you want to try to live in a low crime area. You can get cheaper, but it adds two hours of commuting every day.

So, yes, some people here make $80,000. Or $120,000.

But it's very expensive to live here, and by and large most of the rest of the country has a better quality of life.

Depending on how you measure that, of course.

But a lot of those DC residents you folks so carelessly demonize are crammed into crappy tiny condos, or are living in high crime areas, or both.

Yes, the top echelon of defense contractors (and others) are getting stupendously rich.

But the average worker in DC is not.

Far from it.

To David Hardy:

Criticism was unwarranted in this instance, just a scathing comment. But your questions point towards some of the answers, sir.
Just a correction, but the Bay Area isn't shrinking in population. It's growing, just at a slower pace (limited by geographic and regulatory constrains and housing construction).

And while increased productivity accounts for much of the economic output, jobs are definitely coming back. California's unemloyment rate may be well above the national average, but San Francisco's is a good half point below. And SF is way cooler than everywhere else.
In 2010, federal civilian workers had an average wage of $83,679, according to data from the U.S. Bureau of Economic Analysis.5 By comparison, the average wage of the nation's 101 million private-sector workers was $51,986
When benefits such as health care and pensions are included, the federal compensation advantage over private workers is even larger, according to the BEA data. In 2010, federal worker compensation averaged $126,141, or double the private-sector average of $62,757.
Wouldn't it be nice to have Fed Gov shut down for 3 months to see all those leeches who shop at Bethesda "Balducci" to default on their mortgages?
MrJest has it right. Until we count tax expenditures as negative dollars in the GDP calculation we are lying to ourselves.

Chicago, Houston, Milwaukee, Philadelphia, Denver: they may be full of lib socialists, but they are actually PRODUCING something and are next tax PAYERS.

Washington is nothing but a big suckhole. Anybody that counts the taking of resources from a producer and giving it to a parasite as "production" is in denial of what's really going on.
Apparently Shane got frustrated and quit reading. "How disconnected can you be?" asks Shane, before making the point that is the exact point of the article.

Shane, how disconnected can you be?
How disconnected from reality can you be? The reason for DC doing ''well'' is the massive bureaucracy ensconced there,plus new federal hires, along with the army of lawyers and lobbyists. No other reason. It's doing well on the backs of the taxpayers and small businesses, both of which it is ruining.
Chicagoans know that the term Second City has nothing to do with size or ranking, but with the fact that the First City burned down in October 1871.

Try a little thought experiment;
You get up one morning, come down to breakfast, open the paper and the headline reads;
What would result?
Planes crashing?
Trains running off the rails?
Ships sinking?
No. NO. NO.
The Governors of the states would confer, appoint representatives and senators, choose among themselves someone to act as president and arrange a national election.

Now try this headline;
THE PEOPLE DISAPPEAR-No one left but Federal employees.

How long would it take for tumbleweeds to appear on Pennsylvania Avenue?
The government is built by the people, not the other way around.
A national capital that thrives while the nation declines is an obscenity.
Every elected office holder in Washington D.C. should walk around with their heads hanging in shame.
But they don't.
Its party time in the big DC.

"We bore the famine worthily, but we lost our heads at the feast."
The legacy of the Bay Area will live on through the technological marvels invented and commercialized there. What does Washington DC have to show?
And don't forget, the opulence and excess of Paris on the Patomac ate being paid for with Americans' taxes: that is why they are going up and up. Plenty of jobs (well paying!) in the public sector, while the private sector stagnates. Social mobility for the well-connected elites, again, all funded by taxes. I know because DC now looks like Paris, where I live, and tax and spend is all the government can do. There is a decided lack of ibdividual freedom in the air here, but if you like to be coddled and cosseted, then this place is for you. The changes described by Mr. Renn along with Glenn Reynolds' piece this morning should mafe us wake up and smell the Maxwell House...
'Cept, here's the thing: "GDP" does not apply positively to those funded by tax dollars. In fact, it can be argued that anyone who draws a salary paid for by taxes (and/or government borrowing - perhaps even more so there although it's impossible to differentiate)is contributing a NET NEGATIVE GDP number.

They are not PRODUCING. They are CONSUMING.

Big difference.

Viewed that way, this article simply points out how big a DRAIN on the national economy DC really is.
What nonsense: "But it’s a loser for America... the regulatory superstate depends on inflicting pain on the rest of the country, pain that only Washington itself can relieve—if you pay up and have the right connections, that is."

America is a democracy. Perhaps beset by donation influence and the lobbying teams of the large corporations. But our democracy is never in the business of inflicting pain. And it is simply dishonest to belittle our democracy as a "regulatory superstate." That is shamefully false.

This a government of the people, by the people, and for the people. Those whose families never serve in the military forget that. We do not.
In this age of air travel and the Internet why do our "representatives" need a residence in Washington, DC? Why not make it a rule that the state domicile definitions apply to all of the state's citizens including elected representatives at the Federal level? This would mean that no one who was not domiciled in a state by the state law of the state in question could represent that state in the Congress. It would be interesting to see which congresspersons and senators today would fail this simple test.

In 2014 I am simply voting against all of the incumbents. They've had enough time to sort things out for us, but they've spent that time taking care of themselves.
I wonder what will happen if the debt ceiling isn't raised? Will all this "progress" stop, or will private money (aka graft) pour into this place to replace the public monies.

There is no doubt this is beginning of a new phase of American history. To figure out where this is going, just read the history of Rome. We are certainly making our citizens poorer as the central govt prospers.

Elections have consequences.

Even the infamous Matt Yglesias is aware of (but does not understand) the futility of government regulation. Writing recently at Slate on the difficulties he encountered while truing to obtain the necessary approvals from the D.C. government to enter business as a small landlord, Yglesias observed:

“The striking thing about all this isn’t so much that it was annoying — which it was — but that it had basically nothing to do with what the main purpose of landlord regulation should be — making sure I’m not luring tenants into some kind of unsafe situation.”

Unfortunately (but not unexpectedly), Yglesias never questions the wisdom or efficacy of government regulation; he simply pines for more effective and efficient control. And that's what it's really all about: control. A large portion of our elite, particular those with no actual business experience, simply can't imagine that any economy can self-organize and operate efficiently and fairly without the guiding hand of disinterested experts issuing coordinating commands from Washington, D.C.

Apparently, the lessons of the Soviet Union's experiment with its command and control economy are lost on today's youth.
A new book comically explores what the Founders would think of today's DC, "Foundering Fathers: What Jefferson, Franklin, and Abigail Adams Saw in Modern D.C.!"
Old School Conservative February 04, 2013 at 10:24 AM
Like a cancer the tumor that is DC just keeps growing.
I have argued for several years that the primary battle in this country is geographic, not ideological, political or cultural. It is literally the D.C. area versus the rest of the country. I believe that it should be completely quarantined military, and all contact between it and the outside world should be cut off. Or else it will suck us all dry and ruin the entire country.
In the last two paragraphs of his article, Mr. Renn claims that the emergence of Washington D.C. as the nation’s second city has negative consequences for the nation and runs counter to the intentions of the nation’s founders. But he provides no evidence of either point.

In regards to the latter issue, as Mr. Renn himself notes, many of the founders “hoped that its location on the Potomac River would help it grow into a commercial as well as a political capital.” Indeed, the founders designed the government to grow with the nation. Congress literally increased in size every time a new state was admitted to the Union. And the two largest bureaucracies of the early Republic (the Land Use Office and the Post Office) were designed to grow as the country grew.

In regards to contemporary growth, Mr. Renn implies that there is a zero-sum game in which the growth of Washington D.C. comes on the back of the rest of the country. First, the nation’s economic growth and government taxes and regulation are not long-term substitutes, but rather complements. For example, economists agree that investment in infrastructure and research & development would be inadequate without government involvement and subsidies. Many lucrative economic markets could not exist without government regulation.

Finally, Mr. Renn conflates the growth of Washington D.C. with the growth of the federal government. He ignores the fact that the engines of growth in Washington D.C. over the past decade are in the non-governmental sectors of the economy (education, health care, construction, services etc…). This omission strikes me as particularly problematic and raises the question of whether Mr. Renn piece is driven by ideology rather than a non-partisan, systematic study of the growth of Washington D.C.
Dear Richtea,
Please explain your criticism. Too simplistic? Outdated? Contradictory to the degree of mutual exclusion? What did you mean?
"demographic progress"?
"racist fears"?

The writer needs to remake his vocabulary, and rearrange his thoughts before he takes up the quill again.

I suspect it may take years, if he is lucky.
"the regulatory superstate depends on inflicting pain on the rest of the country, pain that only Washington itself can relieve—if you pay up and have the right connections, that is. Washington’s fortunes and America’s are increasingly at odds."

You can't recite a litany of growth and impressiveness and then end it with this - it make the article entirely misleading. In othe rwords, you can spend paragraph after paragraph talking about the history of Washington and gushing about its growth, and then end it on this note. The fact that the power of Washington has been at the expense of the rest of the Country, and that Washington is supported by practical and instiutional corruption should have been the leadoff, not the after thought.

This is the only article I've seen in City Journal that cries out to be rewritten - everything is here but it is out of order. The shame is that it won't be done, since what is being said is vitally important, and more or less unspoken.

By the way, as I read this I can't help but think of the parallels between Washington and ancient Rome. Rome, the first city to have over a million people (and when it fell, there wouldn't be another for over a thousand years), was parasitic to an extreme - the city's residents were entitled to a grain dole sent from North Africa and Egypt. The City also had coming to it the wealth of the empire. I'll skip the other parallels - too depressing at this point.

I tried to email this article to a friend, but the format doesn't have a "send" command---how do you do it?
Dear Mr. Brian Reilly,
While your resume is certainly impressive, we are not at this time seeking another fool.

Truly yours,
Washington D.C.
The breakthrough realization for business is that there are far greater returns to be gained in gaming the system than in actually producing goods and services that people want. Such gaming obviously involves expropriating from those unwilling or unable to participate in this exciting realm, AKA the 99%. So the capital thrives, while the rest of us trudge through a rigged landscape.
DC's prosperity is a manifestation of our latest economic bubble - the FEDERAL GOVERNMENT! It will collapse soon & DC will slide back into the swamp from which it emerged.
Good article, although disapointing to know our Government in surrounded bu all that money when I recall a private like myself fighting WW2 for $50.00 per month to make it all possible.
I don't really mind too much the wealth of the DC region. If we could pay those government drones billions to just have them leave the rest of the U.S. alone, doubtless it would be worth the imperial tribute.

But sadly this heartless city toils 24/7 to take away our freedoms -- an even more important commodity than our earnings.
A "highly educated work force"? Well, they certainly weren't products of the DC public school system -- a district that spends more money and produces fewer educated young adults than any other school district in America. No contest.
I used to live in the D.C. area from 1987 'til '93. Even then it had all the aspects written in this article. The thing was that I did not feel like a citizen of the US. I felt like a foreigner in a different country. Now that D.C. has taken the fire from NYC in regards to economic policy and direction, I see us not as Brussels but more like the former Soviet Union, where every aspect of our lives will be regulated from one city alone. Welcome to a Brave New America!
Washington DC is becoming "an imperial capital on the Potomac."

How pathetic.

Any suggestions on how I can help re-establish a small federal government and reduce this "imperial" city to just another freedom loving community?
DC's public schools remain markedly worse than those of any one of the 50 states, according to the National Assessment of Educational Progress (NAEP). Until and unless the schools are fixed, DC will remain an artificial success, largely dependent on lavish federal spending, without any visible thing the city produces. (The real product of the city is what the economists call "rent"...people outside DC pay the city and its federal establishment danegeld. In Roman times, it was called tribute.)
Washington DC is not "becoming" an Imperial City, it has BECOME an Imperial City. Me? I am shopping for some tights and a funny hat. I heard that the Fool can do pretty well in Court...