I work in a less developed part of downtown Washington, D.C., which is now booming.
Construction cranes dot the sky. To walk two blocks to lunch, I keep having to cross the street to avoid sidewalks blocked by new construction. The big, solid, modern office building next door has been torn down — to be replaced by a larger and more luxurious building.
Yes, in the fifth year of Republican control of Washington, Washington is booming.
Republicans took control of Congress in 1994 by promising “the end of government that is too big, too intrusive, and too easy with the public’s money.” A look out my window says that isn’t happening.
A review of the federal budget confirms it. Federal spending was up 33 percent in President Bush’s first four years, making Bush the fastest spender of taxpayer dollars since President Johnson. Between the pork-filled highway bill, the emergency spending bills for the war in Iraq and now the blank-check plans for Hurricane Katrina, he’s breaking that record now.
When Katrina spending is factored in, Bush will likely be the fastest-spending president since Franklin D. Roosevelt during World War II.
Predictably, as resources are pulled from around the country to the capital, Washington is thriving. In the past four years, the Washington area gained more jobs than any other U.S. metro area. Real-estate prices have risen 89 percent in five years.
Three of the four richest counties in America are Washington suburbs. Only two states had faster income growth last year than D.C.
That’s good news for those of us who own homes in Washington and enjoy the finer restaurants that serve a larger and wealthier population. But it’s not good news for the rest of the country.
Money spent in Washington is taken from the people who produced it all over America. Washington produces little real value on its own. National defense and courts are essential to our freedom and prosperity, but that’s a small part of what the federal government does these days. Most federal activity involves taking money from some people, giving it to others and keeping a big chunk as a transaction fee.
Every business and interest group in society has an office in Washington devoted to getting some of the $2.5 trillion federal budget for itself: senior citizens, farmers, veterans, teachers, social workers, oil companies, labor unions - you name it.
Walk down K Street, the heart of Washington’s lobbying industry, and look at the directory in any office building. They’re full of lobbyists and associations that are in Washington, for one reason: because, as Willie Sutton said about why he robbed banks, “That’s where the money is.”
It’s not just money that’s being sucked into Washington. It’s human talent, the most valuable productive asset of all. Too much of the talent at America’s most dynamic companies is now diverted from productive activity to either getting corporate welfare from Congress or protecting the company from political predation.
Slow economic growth can be blamed in large measure on just this process - the expansion of the parasite economy into the productive economy. The number of corporations with Washington offices increased 10-fold between 1961 and 1982. The number of people lobbying in Washington doubled in the late 1970s - and it has doubled again just since 2000. The number of lawyers per million Americans stayed the same from 1870 to 1970, then more than doubled in just 20 years. The Federal Register, where new regulations are printed, now prints a record 75,000 pages a year.
As the parasite economy grows, taxing some people and doling out favors to others, everybody gets sucked in. Even if you don’t want a government subsidy, you need a lobbyist to protect you from being taxed and regulated by the other groups and their lobbyists.
No wonder so many corporations have opened Washington offices, and so many luxury condominiums are being built in the blocks around my office.