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Tuesday, February 5th, 2013

Hail Columbia! Welcome to America’s New Second City

My latest article from the Winter edition of City Journal is now available online. Called “Hail, Columbia!,” it makes the argument that Washington, DC is not just an economic boomtown, but is emerging as nothing less than America’s new Second City. This is for three key reasons:

1. Washington has developed a unique prosperity in the modern economy that goes well beyond its traditional recession-proof nature. Cities like Dallas boast “horizontal” success in adding people and jobs. Places like San Francisco boast of “vertical” success in raising per capita GDP and income. But Washington alone among big cities combines the stunning wealth and productivity of a New York with the volumetric growth of a Houston. It is a city simply without peer in America.

2. The scale of Washington now enables it to play with the big boys. In 2000, Chicago’s economy was about 50% bigger than Washington’s. Now it is only 25% bigger. Washington has more people with graduate degrees than Chicago and is on the verge of passing Los Angeles. At current growth rates, the combined Washington-Baltimore region will pass the 10 million population threshold in about 15 years to join the ranks of the world’s megacities.

3. Washington’s wealth extraction model has evolved from simply profiting from federal spending to a form of economic hegemony based on the regulatory superstate. The region may actually take a blow in the near term from fiscal retrenchment at the federal level, but the increasingly intrusive, fine grained control of the federal government over every aspect of American life ensures that the country will continue to pay tribute to Washington no matter what, and means you basically have to play in Washington to make it as an industry in America today.

There’s a lot more in there too, including the stunning transformation of the District of Columbia itself and the totally unexpected emergence of Washington as a global city. Please read the whole thing for yourself. It’s exciting or depressing depending on your point of view.

21 Comments
Topics: Demographic Analysis, Economic Development, Education, Globalization, Talent Attraction, Urban Culture
Cities: Washington

21 Responses to “Hail Columbia! Welcome to America’s New Second City”

  1. the urban politician says:

    Aaron, I agree with your conclusion in the end:

    Washington is turning into an imperial capital.

    And we all know what has happened to most imperial capitals in history…

  2. Matthew Hall says:

    when I moved to D.C. in the early 90s people still went to Baltimore for a good time and I walked to the White House on Sundays through quiet streets where the only foot traffic was drug dealers and transy-hookers. I left in 1997. When I visit D.C. today, I struggle to remember what it was like just 15 years ago and where the endless crowds of people have all come from in that short time.

  3. Matthew Hall says:

    We shouldn’t assume the permanent success of D.C. It will likely do very well for years to come, but in the decades ahead, I think that D.C.’s power will confront strong and conflicting interests from the South and West Coast. Miami, San Fran, L.A., and Seattle get more from their relations with Latin America and/or Asia than they do from the rest of the U.S.

  4. John Morris says:

    Without reading Aaron’s piece, it seems clear he means the broad metro DC region. Think that should be more clear in this blurb.

    If one takes the whole region, there’s a lot going on that seems pretty sustainable.

  5. John Morris says:

    Great Job! Pretty much captures what seems to be going on.

  6. John Morris says:

    Anther wildcard that’s not insanely unlikely is that the country actually splits into two or more parts with DC remaining the capital of just part of it.

    Aaron does nail the issue of the regulatory state which is much harder, to grasp or understand. People have a slim idea, of spending; know little about entitlements and unfunded liabilities and almost nothing about the impact of regulation.

  7. the urban politician says:

    The Government of the United States really has devolved into a business of its own, a pay to play scheme where the Feds pick and choose which industries will be the winners and losers. Free market capitalism has truly been on the decline in this country for a very long time, and that benefits DC as much as it weakens most of the other cities.

    The only way this will change is, as John above suggested, the nation splits into 2 or more smaller nations. I cannot predict the future, of course, but there certainly is enough inherent tension in this country between regions for that to happen at some point in the future. But alas, I don’t see that happening in my lifetime, and I also doubt it would ever happen in a peaceful fashion.

  8. Chris Barnett says:

    TUP, the government in DC has been picking winners since “these United States” became “the United States” at the conclusion of the Civil War.

    The US has never had a “free market”. Until WW2 we had significant tariffs to protect the domestic marketplace (originally to prevent the UK from dominating the US economically, then it devolved to protecting specific “critical” industries).

    The “great capitalists” in the post-Civil War expansion (Huntington, Morgan, Vanderbilt, Gould) got lots of free handouts from Uncle Sam through the railroads…and they had no federal income tax to pay.

    Since the Progressive era (100+ years now), we have had plenty of significant and intrusive Federal regulation: FDA, USDA, DOJ anti-trust, ICC, FRA. My great-grandfather was among the first federal meat inspectors, more than 100 years ago.

    Sure, the scale is different today, but that is a consequence of the scale and complexity of the whole interconnected world, not some inexorable march to Empire. And it has been repeatedly discussed on these pages…the various states are becoming ever more irrelevant when the organizing principles of the world focus on nation-states and city-metros.

  9. the urban politician says:

    Chris,

    I digress that you are correct. I would argue that some of America’s largest metros (NY, LA, Chicago, etc) are already city-states in their own right. I gather they will be around for a long time after the United States (if ever) disappears.

    DC, however, is grounded on the existence of the United States of America. It regulates the nation as a collective nation, and if the political landscape were ever to shift dramatically from either decentralization or fractionation of the republic, DC will suffer the most.

  10. Ziggy says:

    Aaron, congratulations on the City Journal piece – accompanied by illustrations from the hand of the great and magnificent Arnold Roth no less. Very impressive!

    I think if anything you understate the case for D.C.

    Given the merger of multi-national corporations and the state cemented by Citizens United and the unprecedented powers of the Executive Branch – as exemplified by the 16-page white page white paper released last night (http://www.guardian.co.uk/commentisfree/2013/feb/05/obama-kill-list-doj-memo) – plus the unilateral use of military power by the Bush / Obama administrations, one could make the case that Washington D.C. (as of 02.05.13) is Numero Uno when it comes to global cities. Not because of its individual cultural, social or economic assets but because of the enormous power it has to influence those qualities in every other city around the globe.

    Of course this power and prestige may not last for long. I personally think the sustainability of the track we’re on is increasingly fragile with each passing day. And, yes, New York is still a great global center of culture and finance. But it doesn’t have an army deployed around the globe. And one could argue that Washington D.C. is the defacto home of all Fortune 100+ corporations.

    The world has never seen a city with this level of global power and influence.

  11. EJ says:

    There is something very wrong with a situation in which the nation’s capital amasses so much of the wealth, power, and resources for itself, to the detriment of the rest of the US, and even to the point that it eclipses global-tier cities like NYC, LA, and Chicago. Why even bother having a federal republic at this point? The US is too vast of a space to let one city, even the capital, act as if it is all that matters.

    I certainly am in agreement with this sentiment, and the one also expressed by others that some sort of regional re-alignment or breakup along these lines may be inevitable for the United States. It may or may not adhere to state lines, but I predict many of the traditional regional cultures, if ignored too long by Washington, may do far more than simply re-assert themselves on the national stage.

  12. Chris Barnett says:

    “The world has never seen a city with this level of global power and influence.”

    Rome, Constantinople, and London at the height of power come to mind. (I realize this may contradict my point above about Empire.)

    Is the basis of today’s US power and influence in its economy and productivity and finance, or is it the projection of military power? Or more subtly, the ability to project power?

  13. J.D. Hammond says:

    Hey, I remember the last time the meme went around shaming Washingtonians for the temerity to act like we have or deserve nice things as much as anyone else does. At the same time, we’re shamed by New Yorkers and west-coasters for being too “beige” and culturally conservative to be interesting. I guess we just can’t win.

    If it helps, DC will probably never be as primary as any other “real” national capital, like Paris, London, Beijing, Moscow, Tokyo, Seoul….

  14. James says:

    Ironically Washingtonians have less power than citizens of any other big American city since they lack voting representation.

  15. Ziggy says:

    “Is the basis of today’s US power and influence in its economy and productivity and finance, or is it the projection of military power? Or more subtly, the ability to project power?”

    Chris, I would argue all of the above.

    Also, the references to London, Rome and Constantinople are apt for their day and age. But today, decisions by the Fed (as only one example) affect the economic prospects of China and Europe immediately. Decisions by the President or Joints Chief of Staff can have similar near term affects around the globe.

    In this age instantaneous communications, no city wields power like Washington D.C… for better – and, at the moment – mostly for worse.

    No contemporary city in the world has the potential to advance human progress like the U.S. capital, and it’s failing quite miserably. If one looks at polling data, however, there are clear indications that the hearts of Americans are in the right place. There’s always hope, even if does not currently reside in the corridors of world’s most powerful city.

  16. Chris Barnett says:

    Ziggy, “day and age” is exactly why I selected those examples.

    I agree that in the age of instantaneous, interconnected global communication, that the power in Washington is as none has ever been before.

    But that same power to influence world events, financial instruments, and commodity prices also belongs to every kook or group with some C-4, an automatic weapon or RPG.

    Indeed, one might argue that cognitive dissonance in this realm should be at an all-time high. While the US is probably still the most powerful nation on earth, in the asymmetric-warfare world Washington is powerless against such groups and their events, which can change oil, gold, and currency prices instantly.

    In some ways, it’s 1915 again. The death of some minor strongman/monarch could probably change the world in ways we can’t foresee. Assad? The Sultan of Brunei? The PM of the UAE?

  17. Hoss says:

    Washington, DC: Lots of pigs feeding at the trough.

  18. the urban politician says:

    Hoss,

    You could say that about a lot of well paid administrators. America was once a place where people got paid to actually work.

    Now a bunch of administrators get paid to have meetings while everybody else is doing actual work.

  19. Jonah says:

    If we’re talking about metro areas, the greater SF / San Jose metro area is growing at a decent clip ( http://en.wikipedia.org/wiki/List_of_Combined_Statistical_Areas ) while bringing in educated people as well. Best of all, it’s doing that by producing valuable things, not just by spending the rest of the country’s money

  20. @Jonah, the Bay Area (SF metro + SJ metro) lost about 400,000 jobs from 2000 to 2011.

  21. Jonah says:

    @Aaron

    What a convenient time frame to include both the dot com burst and the current economic malaise.

    High paying tech jobs are about back to where they were at peak ( http://www.sfgate.com/technology/article/S-F-tech-jobs-climb-near-level-of-dot-com-peak-2388053.php – I’ve seen a more recent version of this but can’t find it now) which pays better than most of the jobs that’ve been shed.

    But I definitely agree that DC has held up well during the last recession, but all that’s artificial..

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