Tag Archives: Washington

A hard look at Washington, DC’s economic boom

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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?

Car free in DC

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Washington, DC is seeing fewer cars these days, at least on a per-person basis:

Car registrations in the District have hovered around 275,000 over the last decade, according to D.C. Department of Motor Vehicles Director Lucinda Babers, even as the city’s population ballooned by more than 40,000 people in that time.

Experts say two forces are driving the change. There are more ways to get around the city without a car, and the down economy has everyone looking for ways to cut costs, like getting rid of that second vehicle.

As new residents of the DC area, my wife and I are part of this trend (though our location in the suburbs a few miles beyond the District’s boundary line means that we’re technically not part of this cited statistic).  There are indeed plenty of ways to get around the metro area without owning a car.  My wife’s office is a 10-minute bus ride away from our apartment (it would be 8 minutes by car), and I work mostly from home.  It’s hard to imagine that paying ~$600/month (i.e., conservatively, $200 car payment and/or maintenance, $200 insurance for two, $200 gas) vs. ~$60 for her bus fares is worth the extra 4 minutes a day.

To be sure, we are fortunate to have such great transit options available for our work (short bus ride and telecommuting, respectively).  But what really makes our situation workable is that we can (and do) still use cars quite often.  For short weekly trips (e.g., grocery shopping, doctor’s appointments, etc.), we use Zipcar (~$10/hour all inclusive, including rental, insurance, and gas).  For more special occasions (e.g., weekend getaways), we hire a vehicle from a traditional rental car company (e.g., Hertz, Budget, Enterprise).

Moreover, not owning a car has had a surprising, unforeseen side effect:  I actually like driving again.  I used to commute 1.5 hours/day through the Chicago suburbs, and I detested driving.  Now, I drive a handful of times throughout each month, and every drive feels like I’m zooming through car-commercial-world, fused with the open road.

All in all, our monthly transportation budget is considerably more than the $60 “minimum” needed for my wife’s bus commute.  It is also far less than the $600/month it would cost us to own (and use) our own car.  And there are plenty of intangible benefits of not sitting in traffic every day.  Down economy or not, it doesn’t always make sense to own a car.

Secondary liability, approaching the limit

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The Seattle Times reported a few weeks ago that Microsoft “is pushing Washington legislators to pass a law making it illegal for manufacturers that use pirated software to sell goods in the state”:

The proposed legislation would create a legal cause of action by making manufacturing companies liable for damages, and it would give the state attorney general and companies the right to pursue injunctions in civil court to stop the manufacturers’ goods from being sold.

For example, if a large Washington store sold T-shirts made from a company in China and the Chinese company uses pirated copies of Excel at an office in Shenzhen, Microsoft could seek an injunction to prevent the manufacturer from supplying T-shirts to be sold in Washington state.

This represents a sweeping change to current intellectual property law. It is one thing to grant monopolies via copyright for “limited Times” in order “To promote the Progress of Science and useful Arts”. It is another thing entirely to extend copyright’s monopoly over physical objects alleged to have been manufactured in another country with the help of pirated software and thus to hold the buyers of those physical objects legally responsible.

To put it concretely:  this isn’t holding the buyers of obviously stolen TV’s out of the back of a pickup truck legally responsible for their purchases.  This is holding GM, maker of that pickup truck, legally responsible because the Chinese manufacturer of one of the parts in the truck’s engine used a pirated copy of Microsoft Outlook to receive emailed purchase orders from GM.

Now that’s secondary liability.

Hat tip to Groklaw, where I ran across this story earlier today.  If you’d like to read more about this, Pamela Jones has written rather extensive commentary, including a hypothesis Microsoft is pushing for this and similar laws in other U.S. states in order to unleash a “litigation storm against Linux” — including derivatives like Android:

The law would make it possible for Microsoft to block Android sales in whatever state passed such laws if it could find some tie between the Android product and some manufacturer of a contracted part in China or wherever who happened to use a pirated version of Microsoft Word — not to make the part but to write up an ad for it. Ephemeral, much? But can you imagine how much litigation could spring from a law like this? How little it would take to keep litigation in the air forevermore? And you don’t have to even prove infringement in China, just allege it to initiate proceedings.

Of course, Jones is quick to note that the state of Washington’s “protections” do not extend to companies like Red Hat that profit from selling open source support and services.  Under the law, software companies with proprietary licenses like Microsoft

can sue in civil court and the Attorney General can go after the “wrongdoer” US company, if a notice is sent and no amelioration occurs. But if the violation is of an *open source license*, the victim can’t sue anyone under the bill, and the Attorney General does nothing for you. It’s an exception to the law.