A hard look at Washington, DC’s economic boom

In light of the recent fiscal cliff showdown, Annie Lowery at the New York Times writes a long profile on “Washington’s Economic Boom, Financed by You“:

Billions in federal spending, largely a result of two foreign wars, were pouring into the local economy by the early 2000s. Then came the housing bubble. But after it burst, a remarkable inversion occurred: as the country withered, Washington bloomed. Since 2007, the regional economy has expanded about three times as much as the overall country’s. By some measures, the Washington area has become the richest region in the country. It is now home to the three highest-income counties in the United States, and seven out of the Top 10.

The growth has arrived in something like concentric circles. Increased government spending has bumped up the region’s human capital, drawing other businesses, from technology to medicine to hospitality. Restaurants and bars and yoga studios have cropped up to feed and clothe and stretch all those workers, and people like [developer] Jim Abdo have been there to provide the population — which grew by 650,000 between 2000 and 2010 — with two-bedrooms with Wolf ranges.

Despite its recent success, however, the article suggests that “Peak Washington” is already here, that there is nowhere to go but down:

And yet there is a sense that the capital is headed for a slowdown. Among the Pentagon’s plans to cut nearly $500 billion over the next decade could be reductions not only in materiel but also to all manner of support staff. The homeland-security budgets look certain to see significant reductions, too. One recent estimate noted that more than two million jobs would be at stake if the sequester comes into effect.

Lowery suggests that a tempering of expectations in metro DC would, on balance, be a good thing:

There’s something unsavory about having a capital city doing outrageously well while the rest of the country is limping along — especially when its economy is premised in part on capturing wealth rather than creating it.

To the extent that DC’s economy is indeed “premised in part on capturing wealth rather than creating it,” I agree.  Nevertheless, Lowery cites plenty of evidence that “creative” (as opposed to “capturing”) work is being done in metro DC (“Google has opened an outpost….LivingSocial owns a huge, hiply decorated space….Audi, Intelsat, Hilton Worldwide and dozens of other firms have opened up offices or moved their headquarters to the region”).  Presumably, every urban area “captures” some of its wealth and “creates” some.  How much “capture” is too much, thus making a whole region “unsavory”?

Along these lines, I’m also intrigued by the quote from Virginia Congressman Jim Moran (D), who observes that “Maryland got the life sciences [centered around the National Institutes of Health in Bethesda, MD], and Virginia got the death sciences [centered around the Pentagon in Arlington, VA]….Of course, NoVa [Northern Virginia], given the two wars, it’s done even better than suburban Maryland.”  Does this suggest that DC’s Maryland suburbs are less “unsavory” than DC’s Virginia suburbs?  Or does it only matter that the National Institutes of Health and the Pentagon both spend tax revenue, making them equally offending because they “capture” the country’s wealth?

The shopping available inside the Pentagon

The Pentagon has more than just military related offices and facilities within its 6.5 million square feet: it also has shopping.

The Pentagon is one of the largest office buildings in the world. But you are never more than a stone’s throw away from fast food. McDonald’s. Popeye’s. Burger King. There’s a Baskin Robbins barely 50 yards from the press pen, which is just cruel. The Taco Bell is more of a hike, but military life rewards the bold…

Imagine if Thomas Kinkade had served in uniform. That’s what you’ll get at the Pentagon’s paintings shop — gauzy, unsubtle oil-on-canvas depictions (and tasteful reproductions!) of military scenes. Why someone would want portraiture of being wounded in battle is a separate question…

Military life means changing addresses — a lot. To cope with the dreaded PCSing (that is, the verbed version of the acronym Permanent Change of Station; what we civilians call “moving”) there’s a luggage store a few corridors down from the office, and it sells the finest in leather goods. Especially if you like marked-down Louis Vuitton…

Bored by the endless PowerPoints that a day in the Pentagon promises? Sneak out to the Best Buy to figure out how you can finance an iPad on a bureaucrat’s salary. Or linger in front of the big flatscreens and get caught up in a Lost episode. The store has saved many a beat journalist whose voice recorder ate it right before a budget briefing.

It seems like you have quite a large captive set of consumers though it would be interesting to know how many employees visit these retailers. What kind of bidding takes place to get your business in the Pentagon?

This does make me wonder how much designers/architects of big office buildings design things so that workers will stay within the building to spend money at chain retailers. At some point, having a large enough building likely justifies placing a number of service businesses within the building itself. Are there any civilian structures that rival the selection of the Pentagon?