Go ask Ramsay MacMullen

by on September 21, 2012 at 2:37 pm in Current Affairs, History, Political Science | Permalink

It used to seem shocking that five of the ten richest counties in the United States were part of the DC Metropolitan Statistical Area, but  the 2011 American Community Survey numbers released yesterday show that the DC suburbs now account for seven of the ten richest counties in America.

Loudon, Fairfax, and Arlington in Virginia lead the way followed by Hunterdon County, NJ then Howard County in Maryland; Somerset, NJ; Prince William and Fauquier in Virginia; Douglas, CO; and Montgomery County, MD.

Here is more.  File under “Makers vs. Takers.”  Here is Will Wilkinson on making vs. taking.

RM September 21, 2012 at 2:58 pm

Tyler, it almost seems like you agree with Romney.

Andrew' September 21, 2012 at 3:52 pm

I agree with Romney about this: I always try to say stuff exactly how I wouldn’t if I were running for president.

Spencer September 21, 2012 at 3:57 pm

But the people that account for these counties wealth are not the 47% that do not pay taxes.

Rather it is the corporate lobbyist that are being paid the big bucks to get tax and regulatory changes to favor their employers.

Doc Merlin September 21, 2012 at 4:19 pm

+1
Government, its where the money is!
Government, if you don’t lobby and pay them off, they will screw you over with regulation!

Orange14 September 21, 2012 at 5:00 pm

Defense contractors also make up a significant portion of the employment base which is another reason the fiscal cliff is troubling for this area. Many have put off hiring until the issue is resolved.

RM September 21, 2012 at 5:15 pm

Well, I was trying to be a bit sarcastic and my excitement got ahead of me. My real point — this time — is: Who does Tyler really believe will deconcentrate wealth? Not just in DC, but across the country? It will not be Romney.

ladderff September 21, 2012 at 6:40 pm

ok RM, I’ll bite—who will it be?

(mypoint is that distributing it to your friends places besides these counties isn’t really the improvement we’re looking for.)

charlie September 21, 2012 at 3:11 pm

My god, who knew! Stimulus worked!

rob September 21, 2012 at 3:27 pm

no wonder I can’t afford a reasonable house in NoVa

Brian Donohue September 21, 2012 at 3:48 pm

Very good article by Wilkinson.

msgkings September 21, 2012 at 3:51 pm

Agreed, +1

Michael September 21, 2012 at 6:23 pm

I’m not so sure. Nearly every paragraph had something that made me wince a little bit. A few examples:

He makes the obvious point: “But of course most of us put some in and take some out.” But the next sentence is, “…if it is a fact, that we’ve reached a point where nearly half the population takes more out than it pays in.”

That’s a reference to the 47%. But that’s just the 47% that put in NOTHING in terms of federal income taxes. The percent that puts in something, but gets more out is most assuredly well-passed 50%. After all, if you pay $1 in Federal Income taxes, you’re not part of the 47%, but you still likely take out much more than $1 (especially if you benefit from Child Tax Credits, Mortgage Interest Deduction, etc.) So where is the line? I suspect you’re income has to get up to around $100k before you’re a net “maker.” But there are always exceptions…like what about an oil executive? Do oil subsidies that help his company (and thus his bonus?) count?

Second, his comment about Democrats thinking spending is always the answer, reminded me too much of the quips against the GOP about tax cuts always being the answer. It seemed too much like, “I know you are but what am I?” Possibly Obama’s joke about “take two tax cuts and call me in the morning” (or whatever he said during the DNC) rubbed him the wrong way.

I also thought the idea of democratic denialism was too strong. It’s not hard to find examples of Democrats who realize there are long-run deficit issues. It just tends to be more of the, “Let’s get the economy on solid ground first,” position. That’s different from denialism.

And finally…personal pet-peeve, but I really hate that “economic freedom” index. From my understanding, it’s heavily based on gov’t spending. So, if we disbanded the military altogether, more economic freedom! But, disbanding the military altogether would be bad. Ergo, more economic freedom does not always equal better. And, one could argue that someone assured of health care is more likely to start a business than someone reliant on employer sponsored health care, which could serve as a reason to not leave a current job and start something new, but the taxes and gov’t control count against Economic Freedom. There’s a debate to be had there. But, it’s mainly an ideological debate. That’s the root of my problem with that measure. In so many ways, it’s just a metric of someone’s preferred ideology, but they named it “freedom” so that if your ideology is different, then you hate freedom…or something. There are decent aspects of that measure, openness to trade, capital controls, etc. but it’s all too wrapped up in ideology. Heck, even if you believe in free trade, sometimes, if a large trade partner has a non-free-trade policy on their end, it could be in your best interest to enact a counter-policy. Yes, the world is worse off than if you’re both open, but if one country is indeed enacting it’s best-response policy, can you really fault them?

All in all, not an article I’d rave about…

Brian Donohue September 21, 2012 at 6:52 pm

I agree with your first point. One of Romney’s mistakes was in not framing this around ‘net’ takers and ‘makers’. Of course, this isn’t always easy to apportion. Someone who is destitute might wonder what all this defense spending does for him.

As far as Democrats and spending, I can’t think of a single example of a Democratic leader talking about making ANY kind of meaningful spending cuts (Republicans have a similar allergy to talking about tax increases.)

As far as economic freedom indexes, it’s the directionality that troubles me. I thought the US used to rate near the very top on these measures. It’s not like the bloated Pentagon is a new development, but maybe it’s the war spending that’s responsible, I dunno.

Orange14 September 21, 2012 at 7:33 pm

The Clinton administration was ruthless with respect to Federal agency budgets and it was one reason that they ran surpluses at the end. I was still working at the time and had to deal with the User Fee portion of the Food and Drug Administration. The legislation required a certain baseline of appropriations before FDA could collect the fees from industry. There were two years where the program came pretty close to defaulting on this because the Clinton OMB had slashed the FDA’s original budget request. I heard from friends in some other government agencies that the same thing was happening there.

maguro September 21, 2012 at 10:22 pm

The reason the Federal government “ran surpluses” in the 90s was due to the internet bubble, not any kind of Clinton ruthlessness. Federal spending grew every year of his administration.

kthejoker September 22, 2012 at 11:37 am

All things being equal, shouldn’t federal spending grow every year in absolute terms in a country with positive GDP and population growth? More constituents and businesses to administer, regulate, defend, etc.

As long as the rate of spending was less than the rate of GDP growth, it wouldn’t really matter.

FY US GDP ($Bil) Govt Spending %
1993 6667.4 36.31
1994 7085.2 35.38
1995 7414.7 35.53
1996 7838.5 34.69
1997 8332.4 33.76
1998 8793.5 33.24
1999 9353.5 32.64
2000 9951.5 32.56

Brandon Berg September 22, 2012 at 4:06 pm

Taxes and spending each count for only 10% of the economic freedom index. If they counted for more, Scandinavian countries would tend to score much worse than they do.

Turing Test September 21, 2012 at 4:18 pm

Isn’t the government the worst “taker” of them all? Nozick was right: taxes are theft.

msgkings September 21, 2012 at 4:26 pm

No, they’re not.

Doc Merlin September 21, 2012 at 9:32 pm

You are right. Theft is too small of a word for it. Its like calling the Mona Lisa “a doodle.”

msgking September 22, 2012 at 1:20 am

Yes, I must concede ‘theft’ is too small a word… how about ‘taxes are a holocaust’ or ‘taxes are like getting AIDS’ or ‘taxes are soul-destroying hell-spawned monstrosities’?

Too much?

Doc Merlin September 22, 2012 at 6:04 am

Taxes are a way to partially internalize the externality that is the state.

Michael September 21, 2012 at 6:45 pm

Recently, I’ve been thinking a lot more about Paine’s “Agrarian Justice.” One aspect of it is that man did not create land, nor did “the creator” ever hand out land deeds. The whole concept of private property can only exist within the context of society and the state. Without them, whomever had the most guns could just take your stuff. Even the staunchest of Libertarians agree this is one of the, if not most, fundamental aspects of government, to protect those “rights.” (My old professor Israel Kirsner comes to mind as an example.) So, in that sense, taxes are the payment given back to society to both thank the system and support the system that provides the protection of your stuff and the right to exploit it. This extended to not just paying your share of the costs of the military, police, and judicial system that protected those rights, but also something due to all members of that society. Paine was talking purely in terms of land and property taxes, and that still works. After all, many make money off minerals, gas, or oil off land they did not create. They just happen to hold the deed, sometimes through payment, sometimes through conquest, and sometimes through pure luck.

Heck, one could imagine someone making a killing off mineral rights on their land, land inherited through their father, and from their father before them, possibly originating from the federal government via something like the Homestead Act, and possibly before that, by conquest of the natives. Is it wrong to ask the owner to give back to the system that bestowed upon him the right to exploit God’s creation that, by luck, happened to be beneath his feet?

But it really can be extended to much more than just property. We don’t live in a Mad Max world. Why is that? Has that benefited you? Do you owe nothing back to those entities, be they people or institution that help perpetuate the non-Mad Max nature of the land you inhabit?

One could move to Somalia to avoid the “theft” of taxes by the US government, but it likely comes at a cost to the self much higher than the tax money that was “stolen.” Granted, there are countries in between, and maybe ones where the protection/tax-theft ratio is more to your liking. But, if they share the same anti-immigration sentiment that’s growing in America, they may not let you conduct business there.

This may sound quite a bit like, “You didn’t build this,” but there’s a lot of truth to that. Romney made a statement about the biggest advantage he had was being born in America. I think we can all agree, out of all the countries to be born to, it’s a pretty good one (some may have preferred others), but is it really theft when that country asks for something back in exchange for those advantages?

Note, I’m not saying, “taxes are all good.” Surely many are bad and many create bad incentives. But to declare that taxes are theft? That’s just silly. They are the payment you give to the society that protects you, your land, your belongings, and nurtures the social structure that makes everything possible. The payment might not be the right level, or excised on the right aspects of life, but some payment, in some form, is totally justifiable. It’s not all pure theft.

ssssssssssssss September 21, 2012 at 10:40 pm

tl;dr – Men are slaves to the state. Be grateful for what small amount of your labor it lets you keep, for it could bind you into slavery and that would be no more than its due.

Dan King September 21, 2012 at 4:31 pm

One has to be a bit careful here. Counties in Virginia include a lot of independent cities. Fairfax County, for example, is just the smallish city of Fairfax. And likewise with Arlington. These counties are not comparable to counties elsewhere in the country. So the numbers mislead.

Counties in Colorado can suffer from the same defect – though I don’t think Douglas County falls into that category.

F. Lynx Pardinus September 21, 2012 at 4:39 pm

They’re talking about the 1m+ population Fairfax County, not Fairfax City.

yi September 21, 2012 at 5:32 pm

Dan King, you are ignorant and wrong. You know nothing of virginia counties. You make the world a dumber place.

George Balella September 21, 2012 at 4:55 pm

Hummm… so who’s is dependent on government? I thought it was the lower 47%.

Brian J September 21, 2012 at 5:14 pm

Has anybody tried to be more specific with this alleged influence peddling?

Also, why does a place like Hunterdon County, New Jersey, or Douglas County, Colorado, have a similar profile to Loudoun County, Virginia, despite not being near D.C.? Wouldn’t this suggest that some sort of affiliation with the government fails to explain the whole story?

dead serious September 21, 2012 at 5:25 pm

I don’t know specifically about Hunterdon County – it actually surprised me as I would have expected counties a bit closer to NYC to be richer, but here is more information:

http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

My guess is that these are pharma execs and managers, given that nearly 1/5 of the workforce falls in the “Educational services, and health care and social assistance” industry bucket and in the occupation breakdown, half are in the “Management, business, science, and arts occupations” category.

NJ is the second richest state due in large part to those employed in the financial services sector plus relatively high-paying pharma.

Brian J September 21, 2012 at 6:45 pm

That makes sense. Whatever the case, though, doesn’t this call into question the notion that the this is all due to leaching from the government? I’m sure there’s some of that, but it seems like people such as Yglesias are making a lot of logical leaps. They could be right, but are they? Has anyone looked at how, say, Loudoun County fared over a few decades?

Orange14 September 21, 2012 at 7:36 pm

There’s not as much pharma in NJ as there used to be. Roche is gone and Novartis only has a small corporate presence. Merck has headquarters but most all of R&D and manufacturing is outside the state. Bristol-Myers has a facility in the Princeton area that is sizable (not corporate) and the only other one I can think of that still is significant is Aventis.

IVV September 21, 2012 at 11:06 pm

Hunterdon is where many execs and middle managers live. Many of the surrounding counties also have many high net worth individuals, but they aren’t as rural as Hunterdon, so contain many low income individuals in the more densely populated areas as well, bringing down the median income of the county. I live in Essex County, which contains some of the highest-income cities in NJ like Millburn, Essex Fells and North Caldwell, but it also contains Newark.

Brian J September 21, 2012 at 11:28 pm

See, now we are talking something that makes more sense than talking about influence peddling, like Yglesias.

Richard Drake September 21, 2012 at 5:26 pm

I’m sure that “takers” has quit a lot to do with it all (we all know jobs in DC were the best ticket in town during the recession), but you are neglecting to point out a very unique geographical, regulatory and cultural situation Washington D.C. has going on. For one, Washington D.C. being Federalized District splits it’s suburbs with two neighboring states. The likelihood of a large percentage of counties within a given area surrounding a major city expands because of that simple fact.

Second, unlike most other major centers of business Washington D.C. has regulatory limits on construction of high rise buildings, meaning there is an extremely finite limit of high density available housing. This creates a situation where most people with larger incomes move outside of the city due to crowding and limited housing availability. The result is there is a large spread of people with high incomes moving outside of the city to single family homes in the local area. There is no corollary to elites living in Manhattan’s upper west side for example.

Finally it is important to point out that Washington D.C. is an extremely educated city with thriving business but traditionally lacks the draw for unskilled individuals to move there. Thus you have a lot of highly educated and highly paid individuals residing within in a smallish geographic area, but there are very few non-local residents that would compromise the less educated or “blue collar” portion of a city that are drawn to other major cities and their surrounding areas such as LA, Chicago or New York. I can’t begin to tell you how much this effects the dating scene where all eligible women are at home having book clubs or wine nights instead of being out in bars like other cities. Miserable.

chuck martel September 21, 2012 at 8:07 pm

You’re completely full of it. Every big city has surrounding suburbs and many are close to state borders, Chicago, Kansas City, St. Louis, Cincinnati, Louisville, the list goes on and on.

Most people anywhere but upper west side Manhattan don’t live in high-rises.

There evidently aren’t any janitors, garbage men, waitresses, bartenders, C-store clerks, etc. in suburban DC, at least according to you. Do you work for the US Census?

Yi September 21, 2012 at 5:34 pm

The wealth of DC and the surrounding parasite counties just shows one thing – insider trading works.

David September 21, 2012 at 6:11 pm

A bit of caution should be exercised not to conflate “high average incomes” with “greatest concentration of wealth”. I have familiarity with many of the areas in the top 20, and while they do have a good deal of wealth, it’s the lack households with lower incomes that makes the average so high. In a nutshell, it’s white suburbia. There are many other areas with greater absolute wealth, but more poverty as well.

Bill September 21, 2012 at 7:03 pm

+1 Segregation by income will also give you the same effect. Have a low income inner core and an outer core of higher income. If you take the total Metropolitan Statistical Area, you get different results.

Bill September 21, 2012 at 7:07 pm

From a 2006 article reporting on the Metro Statistical Area:

The greater Washington area, including the District of Columbia, and neighboring areas of Maryland and Virginia, had the highest U.S. median household income, at nearly $72,800, ahead of the San Francisco area at $71,201 and Boston at $63,958, according to the report from the Greater Washington Initiative, which cites data from the U.S. Census Bureau, the Bureau of Labor Statistics, market data firm Claritas Inc and other sources.

The report also found the Washington area, which has seen a major increase in defense-related technology employment in recent years, to have the largest science and engineering work force of any U.S. metropolitan area, at 324,530, ahead of the combined San Francisco and San Jose, California, work force of 214,500 and Chicago at 203,090.

The report said 42.5 percent of Washington-area residents have a bachelor’s degree and 19 percent have a graduate degree, greater than San Francisco’s bachelor’s degree rate of 37.3 percent and graduate degree rate of 14.1 percent. Washington also claims the highest percentage of PhDs, at 2.5 percent of the population.

Brian J September 21, 2012 at 7:40 pm

This begs the question, is this anything unexpected?

Leave aside whether you want or do not want government of a certain size and assume it’s there. Given that it’s there and that what form it is involves people who would naturally have higher incomes, should we be surprised the areas where these people live is wealthy? Why are we to assume influence peddling?

Bill September 21, 2012 at 9:25 pm

Brian, Please point out where I said that I said it was from influence peddling? As to the meme that others, not you, make that somehow it is government workers that account for the income effect, they probably don’t know the civil service GS pay schedule.

Brian J September 21, 2012 at 10:58 pm

I was referring to what Yglesias said, not you. I should have made that clear.

As far as government workers, I doubt they could be that big of an influence. But those who are connected in some way, through lobbying something else where you need to be educated? Well…The implication from Yglesias and others was that this is a symptom of something nefarious, but that’s not at all clear. It could be, but given that the type of person that would be involved in something like this is someone who is probably educated and who would, in any sort of job, command a higher salary.

The Anti-Gnostic September 21, 2012 at 9:50 pm

Lobbyists, tax attorneys, federal appellate and regulatory lawyers, high-level government employees and government contractors all subsist largely if not entirely on externalities and tax revenue. Of course they peddle influence. I can’t assume everything they do is a net drag, but I’d guess most of it is.

Romney should have warmed to his theme and gone on a real tear about the whole war of the High and the Low against the Middle, but then his backers would stop sending checks and Rush Limbaugh would accuse him of “class warfare.” Lindsey Graham would hold one of his unctuous press conferences and solemnly proclaim that the politics of “angry white men” have no place in the Republican party.

Claudia September 21, 2012 at 10:13 pm

AG, you have no evidence that those government-related workers are mostly a net negative on the economy/society. But more importantly, if you’re right, what are you doing about it? (Gnashing of teeth doesn’t count.) You do realize that not every government employee thinks “big is beautiful” for the government…many actually work to make it more effective, less invasive. “Angry white men” might cheer up if they get out there and do something productive.

Millian September 21, 2012 at 7:00 pm

GMU: makers or takers?

Doc Merlin September 21, 2012 at 9:33 pm

Some of both (definitely many profs contribute way more than they cost), although it being academia, I suspect more of the latter.

Rich Berger September 21, 2012 at 8:31 pm

Seems like Bob Hope was on to this: “I love to go to Washington—if only to be near my money”

Mogden September 21, 2012 at 8:35 pm

The epicenters of corruption / crony capitalism are Washington DC and New York, so this is entirely to be expected. What is astonishing is that so many citizens continue to advocate madly for more of the same.

Yancey Ward September 22, 2012 at 9:59 am

Exactly!

So Much for Subtlety September 21, 2012 at 8:49 pm

Further down MR there is a link to an article by the vile Ezra Klein. Klein includes a table that shows in the last election, Obama comfortably took the majority of vote from people earning less than $50,000 – what we might call the Welfare Queen vote if we want to needlessly annoy. He narrowly lost the $50-75,000 group (48 v. 49), but he took the $75-100,000 group fairly easily (51 v. 48). What we might call the DC senior bureaucrat vote. He then lost the next two categories but took the $200,000+ group with ease – (52 v 46). What we might call the Crony Capitalist or Warren Buffet group. Although it is interesting to see so many of them seem to have voted for neither. I doubt their vote when libertarian.

So why is this a surprise? There was a substantial group of people with a lot of money voting for Obama. I doubt that included Donald Trump. Presumably most of them are senior civil servants or wealthy people who hope to profit from Obama’s programs. No doubt a lot of them cluster around DC.

I am with Rick Perry on this – the only sensible aim of politics is to make Washington as irrelevant to our daily lives as possible. Which would mean these people would have to go and get real jobs.

AndThenThere'sMe September 22, 2012 at 4:14 am

Maybe, just maybe, not every high income family votes R and every low income family votes D. My wife and I earn $200k+, vote D, and we aren’t civil servants or people hoping to make a lot of money off of the federal government. We don’t like the GOP positions on gay civil rights or cozy church/state relations or saber rattling bluster toward Iran. And I know plenty of people with incomes below $50k who similarly don’t vote their pocketbooks and go R.

So Much for Subtlety September 22, 2012 at 7:08 pm

May I ask what you and your wife do? Generally speaking.

However I am sure what you say is true. After all what is interesting is how all but the lowest income groups split more or less evenly for both sides. A big chunk of America is in that 50 v. 50 territory.

But I would think the civil servants and crony capitalists manage to tip the balance.

Brandon Berg September 22, 2012 at 4:11 pm

Obama was something of an anomaly in this respect. If you look at the House elections in 2008 (Google CNN’s exit polls), support for Republicans increases monotonically as you go up the income brackets, all the way to the top. Obama appealed to rich people (or McCain repulsed them) in a way that Democrats more generally do not.

Tom September 21, 2012 at 10:37 pm

DC can largely thank the success of the Republican Party over the last few decades for turning DC into a heaven for lobbyists and making it the most rewarding thing Corporate America does.( Anyone remember the K Street project?) Am I the only one that finds it odd that a libertarian is proud of the governemnt being turned into a spoils system where lobbyists conspire with politicians to loot the government and rig the system against the little guy. What about the assumptions made in free markets? The libertarian profs don’t like the Stiglitz crowd. I remember seeing a picture of the room when Congress was deciding an a major food policy – one blogger had most of the room identified, they were all lobbyists for corporations or their front groups, just about no one representing people who eat food or people concerned about them.

Cliff September 22, 2012 at 12:10 am

Which libertarian are you referring to?

Yancey Ward September 22, 2012 at 10:02 am

Imaginary one.

mehr Infos... September 22, 2012 at 11:45 am

240p WTF! Get with the HD program arseholes

Ray Lopez September 22, 2012 at 1:25 pm

This is the well known {b}capital effect{/b} that the Brookings or Cato Institutes once described. In every capital around the world the real estate has gotten much more expensive since WWII because of rent seeking. All of us Washingtonians have gotten rich from this effect. Just the other day, I saw how the average Maryland household income was close to $80k while for Mississippi it was $36k. DC is the second most profitable market for real estate behind London (another capital), aside from the capital of Angola, which is the most expensive place in the world to live. Much as we Libertarians gripe about Big Government, it cannot be denied some of us got rich off it–same with Republicans and the “West”, most of it Federally owned with valuable mineral concession historically to be had for the asking.

Comments on this entry are closed.

Previous post:

Next post: