Like many national capitals, Washington, D.C. is often accused of being insulated from the economic realities of the rest of the country. In colloquial terms, it is frequently referred to as a bubble city.
If Washington is indeed sheltered from the discipline and competition that pervades the rest of the country, then serious questions need to be asked about its ability to make decisions for the nation and whether the country would be better served with decisions being made more locally.
Examining the economic data for cities like Washington can be challenging because there is such a high rate of people working in the city but who live nearby in other states, such as Maryland and Virginia.
But three indicators overcome this challenge: business creation, employment, and jobs available to the unemployed. They show how Washington’s economy behaves differently than the rest of the country.
Put simply, Washington is insulated from many of the economic disciplines and constraints that affect the rest of the country — particularly during times of recession. What drives the Washington economy is generally linked to the public sector or government. Even the private-sector jobs in Washington are directly or indirectly dependent on government. Thus, when government expands, Washington prospers.
Indeed, an interesting statistic that highlights this effect is how employment in Washington responds to one-party government rule, which has historically been linked to expansionary government. Ninety-five percent of employment growth in Washington since 1939 has occurred during periods of one-party rule of both Houses of the Congress and the White House.
This insulation from economic reality means that those making and enforcing the laws are not subject to the costs and effects of their tax and regulatory decisions. It seems both reasonable and logical to demand that only a limited set of decisions be made by those in such an insular environment. In many ways this is exactly what the Constitution demands.
History and experience instruct us that the best decisions are made closest to those affected; individuals, families and businesses make the best decisions for themselves. When collective action through government is required, it is best done at the local or county level. If laws are needed at a higher level, the country is best served by relying on the states, which act as laboratories and centers of experimentation.
The last resort should be national policies from Washington that necessitate a one-size-fits-all approach for the country and are clearly made within an insulated environment.
Michael Noffsinger is a research intern at the Pacific Research Institute (www.pacificresearch.org) in San Francisco.