The $700 Billion Honeypot

The Washington Post reports:

[There is] an army of accountants, financial advisers, asset managers, lobbyists and others descending on Washington as part of the government’s attempts to rescue the economy and bail out industries.

Big consulting firms like PriceWaterhouseCoopers and Ernst & Young have booked extended-stay apartments and blocks of hotel rooms. Out-of-town financial experts are scouting for office space, expecting to lease it for several months as they help do work for Treasury and others.

Commercial real estate brokerage companies have pulled lawyers and salesmen who usually put together deals on downtown offices to work out loans and foreclose on properties. Some have dubbed themselves the “TARP team” after the Treasury’s Troubled Asset Relief Program created to sort through assets.

“Everything from the policies, the regulations, to the money and the contracts to do the work will be emanating out of Washington, so people want to be here,” [lawyer Larry] Wolk said. “Wall Street has moved to K Street.”

National crises often provide a stimulus to the Washington economy….

“Firms see this as a potential gold mine,” said Anirban Basu, an economist and chief executive of Sage Policy Group in Baltimore. For Washington, “that has to translate into business sales, high-powered restaurant meals, business suit purchases, and travel and luxury hotel stays. We often talk about D.C. being different economically than the rest of the country and this is perfectly true. I don’t see much evidence of a slowdown here.”

As I wrote two years ago, “When you spread food out on a picnic table, you can expect ants. When you put $3 trillion on the table, you can expect special interests, lobbyists and pork-barrel politicians.”