The stimulus may have been too small to save the economy — at least according to Krugman — but the expansion of the Federal Government has done wonders for Washington DC.
POLITICO has a new report on the wide disparity between the DC economy and that of the rest of the world. The unemployment rate in the nation’s capital is just 6%, well below the national average.
The housing market, boosted by the large number of high-income earners in the area, many working in politics and government, is easily outpacing the markets in most of the country. And there are few signs of economic distress in hotels, restaurants or stores in the D.C. metro area.
As a result, there is a yawning gap between the American people and D.C.’s powerful when it comes to their economic reality — and their economic perceptions.
That DC insiders have a rose-coloured view of the national economy isn’t the big scandal here.
The scandal is the continuation of dynasty-preserving institutions. Financial industry hiring may have sputtered out, but there’s a bright new home for the elite and well-connected just down the Acela.
On Friday, the DC insider/pundit Matthew Yglessias mused:
I think a neglected part of the labour market adjustment story is the geographical rigidities imposed by aspects of human nature and the housing market. There are enormous disparities in the unemployment rate from metro area to metro area that underscore the fact that our labour market is not perfectly integrated. Ask yourself why everyone doesn’t just leave greater Las Vegas, where unemployment is 14.1 per cent, and move to the DC area where it’s only 6 per cent. There are plenty of reasons, some we could (and should) try to remediate and some we probably can’t. But they make it difficult for modest growth to translate into maximum employment gains quickly.
Please. Housing-related immobility is not the reason the fine folks of Vegas aren’t just packing up and going to DC. Even if suddenly they did have the mobility to move, there’d be nothing for them to do once they got there. K-Street lobbyists, Congressmen, and the Yglessias’ own centre For American Progress won’t have jobs available for folks fresh off the boat from Vegas, who spent the boom years in the service industry or building homes.
DC is doing great, but it’s for a specific slice of the elites who were doing fine pre-crisis. If you’re a normal yokel, please don’t show up looking for work.
And for your enjoyment, here’s the Magnetic Fields’ excellent song “Washington DC” with another view on why DC is paradise.
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