The DC Economy

Are we living the Hunger Games?

Washington is rich not because it makes valuable things, but because it is powerful. With virtually everything subject to regulation, it pays to spend money influencing the regulators. As P.J. O’Rourke famously observed: “When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.” But it’s not just bags-of-cash style corruption. Most of the D.C. boom is from lobbyists and PR people, and others who are retained to influence what the government does. It’s a cold calculation: You’re likely to get a much better return from an investment of $1 million on lobbying than on a similar investment in, say, a new factory or better worker training.

So Washington gets fat, and it does so on money taken from the rest of the country: Either directly, in the form of taxes, or indirectly in the form of money that otherwise would have gone to that factory or training program.

I’m not the only one to notice this, or even to make the Hunger Games analogy. As Ross Douthat wrote, “There aren’t tributes from Michigan and New Mexico fighting to the death in Dupont Circle just yet. But it doesn’t seem like a sign of national health that America’s political capital is suddenly richer than our capitals of manufacturing and technology and finance, or that our leaders are more insulated than ever from the trends buffeting the people they’re supposed to serve.”

I always have a sense when I visit DC of a corrupt and decadent capital, bleeding the rest of the country, which it barely deigns to fly over, white.

[Update a while later]

Link was missing before. Fixed now, sorry.

8 thoughts on “The DC Economy

  1. B Lewis

    I always have a sense when I visit DC of a corrupt and decadent capital, bleeding the rest of the country… white.

    Implying that the country is white be raciss.

  2. Josh Reiter

    You know I actually just watched the Hunger Games the other day for the first time on Blueray. I’d have to say it was a pretty good movie. I even popped it back in the next day and started the chapter right when they landed in the arena.

    It made me think of something I think I read of Victor Davis Hanson’s, that the rich often preferred to make the distinction quite clear as to who had the power and the wealth. Nowadays we drive the same cars that the rich drive, fly on airplanes that fundamentally perform every bit as well as a rich persons, and eat the same food that they eat. Although I’m sure the bouts between my smoked salmon days are probably a bit more infrequent. But you know if I wanted to shell out the $20 for a package of smoked salmon I’d just drive over to the corner store and get me some.

    The current aristocracy knows they can’t take away my smoked salmon. So, what ultimately drives the crowd in D.C nowadays is that relative wealth no longer distinguishes you, but rather power and control. Directly influencing the outcomes of peoples lives for many people means lots more in terms of satisfaction then just merely earning a buck.

    1. ken anthony

      The game is rigged, but it doesn’t have to be. People just don’t care that it’s rigged. Those skyscrapers were paid for by the unfair advantage of market makers (and their dubious claim of bring liquidity to the table) in the penny gaps between bid and ask. If you have that advantage (the little guy never does) a single dime is worth millions of dollars in a single day (assuming a volume trading stock.) It doesn’t matter if the stock price goes up, down or remains the same. It’s having a priority in the gap that matters. Market makers play by rules that give them that advantage. It doesn’t have to be. A fair market with no advantage to anyone is completely doable.

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