In the dystopian blockbuster movie The Hunger Games, a
restless and resentful population in the nation of Panem is
controlled by the wealthy and powerful who reside in the fortress
city of Capitol.
Is that all that different from today’s United States, where
wealth and power seem increasingly to gravitate toward the Beltway
and its suburbs? Money magazine recently looked at the
3,033 counties in the U.S. based on income and found that the top
one-half of 1 percent is dominated by Washington, D.C. Of the 15
counties with the highest median household incomes, an astonishing
10 are in the Washington area and have an average income almost
double that of the nation as a whole. Four of the remaining five
surround New York City, and are populated by many Wall Streeters
who benefited from TARP and other federal bailouts.
“[T]imes are booming for Washington’s governing class,” noted
Politico, the well-read chronicler of Beltway mores, in
2010. “The massive expansion of government under Obama has
basically guaranteed a robust job market for policy professionals,
regulators and contractors for years to come.” That year, a poll
conducted by Penn Schoen Berland for Politico found that
45 percent of Washington elites thought the country and economy
were headed in the right direction, compared to 25 percent of the
general population in the rest of the country. A full 74 percent of
Washington elites said the recession had hurt them less than most
Americans.
Mark Penn, the former pollster for President Clinton who
conducted the poll, concluded that “the disconnect between D.C.
elites and the general public is stoking the growth of more direct
popular movements like MoveOn and [the] Tea Party.” He says one
thing both right and left agree on is that a pampered “ruling
class” of bureaucrats, Beltway Bandit contractors, consultants, and
lawyers seem to have their noses permanently in the federal
trough.
How has it come to this? Through a relentless ratchet effect,
government has remorselessly grown, no matter which party is in
power, to a point where the federal government now spends about $4
billion more a day than it takes in. And residents of the
D.C. area prosper most from that deficit spending. The Cato
Institute says that in 2008, the average compensation in pay and
benefits for federal civilian workers was $119,900 annually,
compared to the private industry annual average of $59,900. In
1980, when Ronald Reagan was elected president, only 3 percent of
Washington residents had incomes of $200,000 or more in today’s
dollars. Today, more than 13 percent, or almost one in seven,
do.
A Virginia woman recently wrote to the Washington Post
to complain about this discrepancy:
If you drive through Northern Virginia, you will find nearly
entire neighborhoods of $500,000 to $900,000 homes owned by
government workers or contractors. Then you can drive five streets
over and find $200,000 to $400,000 homes owned by those who pay the
salaries for those government employees. It’s a fascinating
distribution of wealth. Most government employees and contractors
could not earn more than $60,000 on the free market. Their only
chance to make that kind of money comes from having an employer
that not only never has to make a profit but can forcibly take
money through taxation.
Dan Mitchell, a senior fellow at Cato, wrote on the institute’s
blog that the income numbers tilt strongly toward the New York and
Washington areas: “As far as I can tell, the only untarnished
jurisdiction in the top 15 is Douglas County, Colorado. And given
that these are the folks who are implementing a good school choice
plan, it seems that we have a group of productive people who also
believe in doing the right thing.”
As Angelo Codevilla has warned in the Spectator’s
pages, the danger of this nation’s new Ruling Class is that it will
cement an unholy alliance between big business rent-seekers and
Washington power mongers to the detriment of ordinary
Americans.
The archetype of this alliance in the Obama administration would
appear to be Treasury Secretary Tim Geithner. As Kevin Williamson
of National Review sardonically notes, Geithner “came up
through the ranks as part of the bipartisan Robert Rubin–Hank
Paulson–Citigroup–Goldman Sachs cabal.” Once he was kicked upstairs
to Treasury after failing to anticipate the 2008 financial collapse
while chairman of the New York Fed, Williamson writes:
Geithner’s main job became shoveling tens of billions of federal
dollars into Citigroup, in an ingeniously structured investment
that allowed the government to buy a 27 percent share in the bank,
for which it paid more than the entire market value of the bank. If
you can’t figure out why you’d pay 100-plus percent of a bank’s
value for 27 percent of it, then you just don’t understand high
finance or high politics.
IT SHOULDN’T SURPRISE ANYONE that discussion about “the 1
percent” of Americans with the most wealth dominates the campaign
season, while Washington’s wealthy rarely seem to enter the
conversation. But they should be central to any discussion. To join
the top 1 percent of D.C. earners, a household must have an annual
income of $527,000, a far higher amount than in the rest of the
country.
The Occupy movement enjoyed sit-ins almost everywhere over the
last year. The one place its adherents didn’t spend much time
squatting was Washington, D.C., in part because the federal
government made clear it wouldn’t be as spineless in dealing with
them as, say, New York’s Mayor Michael Bloomberg.
But based on who really has the ill-gotten gains in this
country, an intellectually honest Occupy movement would have
focused its attention inside the Beltway. That it didn’t explains
not only why the Tea Party will outlast the Occupy movement, but
why it has been a much more coherent and perceptive force.
