After the 2000 Census, the richest county in America was Douglas County, Colorado. By 2007, Douglas County had fallen to sixth. The new top three are now Loudon County, Virginia; Fairfax County, Virginia; and Howard County, Maryland. All three are suburbs or exurbs of Washington, D.C. In 2000, 14 of the 100 richest counties were in the Washington, D.C., area. In 2007, it was nine of the richest 20.Arnold Kling reacts at EconLog,
All of this is fine if you happen to live in the D.C. area. It's not so great for the country as a whole...
The problem is that, save for the tech corridor in D.C.'s Virginia exurbs, the Washington Metro area doesn't actually produce anything. Washington doesn't create wealth, it just moves it around—redistributes it. As government grows and takes control of more and more of the private economy—either through spending, regulation, or taxes—more and more wealth that's created elsewhere comes to Washington to be devoured.
The Washington wealth boom is the result of the massive expansion in government over the last 10 years, which has populated the region with an increase in well-paid federal employees, and wealthy federal contractors and lobbyists...
America's wealthiest counties ring a city where the chief industry is government - and the entire region's only getting richer. That doesn't seem like a trend that bodes well for the health of a market-based economy.
My guess is that there is a pretty strong relationship between the share of government spending in GDP and the share of incomes in the DC area. Since the former is going to rise dramatically in the coming years, the latter will, too.
If you thought it was unproductive for the best and brightest to go to Wall Street to become investment bankers to decide to use other people's money, watch what happens when the best and brightest come to Washington to decide how to use other people's money.