Prosperity is Back...in Washington, DC

There is a fascinating, and somewhat depressing, article in this week’s Time Magazine (Bubble on the Potomac) about the economy in our nation’s capital, unemployment much lower than the national average and median income much higher.  Surrounding counties are among the richest in the USA, and this in spite of a District of Columbia poverty rate significantly higher than average.  In spite of Paul Krugman’s dour warnings, there is no evidence of austerity taking hold in the Capitol.

 We frequently hear that government employment is not growing, and that is true.  According to the article, it is about the same as in the 1960’s.  But outsourcing is the big thing, and there are, according to the article, two government paid contractor employees in the capitol for every government employee.  And, besides the contractors, there are entities such as USPS whose employees are no longer government employees but do work government employees used to do.  Also, in DC, there are the hoards of lobbyists and lawyers.  And a new class of interns, recent college graduates, arrives every summer, often to work for free, at their parents’ expense for a year or so before getting a paid job. 

I suppose outsourcing started with corporations, a popular strategy for keeping company headcount and benefits cost down and dealing with variable labor demands.  But, there is a cost in reduced loyalty and in generally higher compensation and management expense.  And while it is pretty easy to justify bringing in experts for a short-term project, the decision to bring in consultants is often counterproductive, their expert advice being heard but not followed.  These same problems exist, of course, with government contractors and consultants. 

The article includes several examples of conspicuous consumption by the mostly young professionals enjoying the rich and self indulgent life even as they promote environmentalism, green energy, Spartan diets, and exercise for the rest of the country.  The bottom line is that the lives these would be public servants are living are as different from those of the typical American family as from those of the military folks, and their contractors, risking their lives in the Middle East, and from those of the 15% or so, 20% in DC, living in poverty. 

Wealthy former Senator and Democrat Party presidential candidate John Edwards liked to argue during his presidential campaign that there are “two Americas,” the wealthy and the poor, the haves and the have-nots.  I’d rather argue that, if one wants to divide Americans into various “classes,” there are at least a dozen: The happy poor, the resentful poor, the career military, military recruits, the large mass of working families getting along just fine on limited but balanced budgets, the large mass of working families loaded with debt and crying for help, the very rich sports and entertainment figures living extravagant and hedonistic lives, the very rich sports and entertainment figures living modest lives and looking for ways to help others, the very rich working folks living extravagant and hedonistic lives, the very rich working folks living modest lives and looking for ways to help others, the comfortably retired, the uncomfortably retired, the sick and dying, and, in a class all by themselves, government employees and contractors in Washington DC.

One thing for sure is that any attempts to divide us all into one of two categories and make those our primary identities, haves and have-nots, rich and poor, minority and majority, 1% and 99%, labor and management, religious and non-religious, gay and straight, red and blue, conservative and liberal, urban and rural, college educated and not, professional and blue collar, even male and female, are counterproductive nonsense.  We are all individual children of God, whether we like it or not, and that is the controlling and common identity we all have to acknowledge in the end.

With current trends, for the foreseeable future, I think the most secure financial future belongs to those government employees and contractors in Washington DC, but I still think I’ll advise my grandchildren to follow some other path…if they ask.