Evan Soltas
May 28, 2012

Six Signs of the DisConnect

"Washington is out of touch" -- that's a line one hears a lot from politicians who want to play the outsider. Is it true?

Tyler Cowen of the "Marginal Revolution" blog points us to a disturbing article, "Bubble on the Potomac," in Time magazine which discusses the extent to which that has become true, economically speaking, for the District of Columbia and its environs -- defined, for the purposes of this post, as the Washington-Arlington-Alexandria metropolitan statistical area.

Although I tend to regard the economics coverage of such newsmagazines as sloppy, I was very impressed by the quality of this article. I'd just like to further the point, demonstrating that there is substantial evidence suggesting growth of the federal government in Washington, D.C., and moreover, disproportionate prosperity in the D.C. area.

So here are six signs that D.C. has economically "DisConnected" from the rest of the nation:

#6: Home prices in D.C. have risen 43% over a nationwide average since 2000.

#5: Federal government employment has grown 4% in the District and D.C. area -- a net 40,000 D.C. government jobs -- since President Obama took office in January 2009.

#4: The rise of the contractor conceals the extent to which the federal government has grown in the D.C. area, supporting the argument of the Time article.

#3: The unemployment rate of the D.C. area is consistently two-thirds of the nation's unemployment rate.

#2: The average American's income is 63% of what the average D.C. area resident makes.

#1: D.C. employment contracted only one-fourth as much as the nation's did, and their payrolls are already above their pre-recession highs.