Reality Gap: U.S. Struggles, D.C. Booms

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Politico:

Reality gap: U.S. struggles, D.C. booms

By JIM VANDEHEI & ZACHARY ABRAHAMSON | 7/19/10 6:51

America is struggling with a sputtering economy and high unemployment — but times are booming for Washington’s governing class.

The massive expansion of government under President Barack Obama has basically guaranteed a robust job market for policy professionals, regulators and contractors for years to come. The housing market, boosted by the large number of high-income earners in the area, many working in politics and government, is easily outpacing the markets in most of the country. And there are few signs of economic distress in hotels, restaurants or stores in the D.C. metro area.

As a result, there is a yawning gap between the American people and D.C.’s powerful when it comes to their economic reality — and their economic perceptions.

A new POLITICO poll, conducted by market research and consulting firm Penn Schoen Berland, underscores the big divide: Roughly 45 percent of “Washington elites” said the country and the economy are headed in the right direction, while roughly 25 percent of the general population said they felt that way.

Click here for full poll results.

The online poll, the first in a six-month Power and the People series, surveyed 1,011 people nationally to compare their views with the views of 227 people who live in the D.C. metro area, earn way more than the national average and are involved in some form in policy or politics.

The sample of Washington elites was aware of its propitious situation: Seventy-four percent of those surveyed said the economic downturn has hurt them less than most Americans. They should be self-aware, given the economic indicators for people who live and work in the area.

Since the most recent recession began in December 2007, metropolitan Washington has shed about 71,000 employees on nonfarm payrolls, the fewest number among the nation’s 15 largest metropolitan areas.

In May, unemployment in metro Washington hit 6 percent — an uptick from April’s rate for the area but well below the national average of 9.5 percent and far milder than the May rates of the shattered manufacturing towns of the Midwest, including Flint, Mich. (at 14.7 percent), Elkhart, Ind. (at 13.7 percent) and Rockford, Ill. (at 13.9 percent).

“The unemployment rate in Flint today is as high as it was when my grandfather graduated from Flint Central High School in 1935,” Flint Mayor Dayne Walling told POLITICO. Walling pleaded for something few in Washington are willing to do in this political climate: jack up government spending right now.

“I understand that the federal government has a large, long-standing structural problem with its spending, and that needs to be addressed,” he said. “But the middle of an economic crisis is not the time for that conversation.”

As Democrats were celebrating passage of the financial regulatory bill this week — legislation that will create many new government jobs for regulators and implementers — Wisconsin was among many states reporting new signs of economic distress. The state lost jobs in June in both the private sector (for the third time in the past four months) and government (despite the stimulus plan).

Washington has been largely shielded from the economic downturn, even in 2009, when most states and cities were hit the hardest.

During 2009, the Bureau of Labor Statistics reported more than 11,000 initial claimants for unemployment insurance associated with extended mass layoff events in the Flint metropolitan area and less than half that number for the D.C. metro area — a region that includes the District itself and the wealthy, highly educated counties of Northern Virginia and southwest Maryland. It’s a sobering reminder of the District’s distance from the epicenters of the Great Recession.