Saturday, July 26, 2003

Here's an astute observation as to why so few politicians in the White House aren't that worried about the economy - I saw this in ReachM High Cowboy Network Noose, who in turn got it from this article;


Today the Washington-area unemployment rate is 3.4 %, roughly full employment, while the rest of the country struggles by with a 6% unemployment rate which stubbornly refuses to fall. Of the more than 300 metropolitan areas in the U.S., DC has the 32nd lowest unemployment rate, and all the places doing better are small towns. The next best showing by a big city is Atlanta, which has an unemployment rate almost 50% higher than DC.

DC is booming because this year the federal government is pumping 9% more money into the local economy than it did last year. Welcome to wartime. I suspect most of the money is in the form of consulting contracts for homeland defense and DOD (what exactly does the Department of Defense defend now that we have a separate homeland defense agency?). As a result of this money Washington-area housing prices are up by 20% in a year, making all the middle-aged types euphoric and rich; a townhouse in Arlington worth $200,000 at the beginning of the Bush administration is worth $350-$400,000 now. Traffic is reaching LA levels but the place is, considering how the rest of the country is doing,almost indecently prosperous.

The strange part is that no one in DC seems to know that the national economy is stagnant; they assume the recession is ending because it is over in DC. My professional economist friends assumed, until we checked the bls.gov website, that the U.S. and DC unemployment rates were roughly the same.

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