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Business/Finance See other Business/Finance Articles Title: Capital gains: Spending on contracts and lobbying propels a wave of new wealth in D .C. So much money to be had if you know where to look. The avalanche of cash that made Washington rich in the last decade has transformed the culture of a once staid capital and created a new wave of well-heeled insiders. The winners in the new Washington are not just the former senators, party consiglieri and four-star generals who have always profited from their connections. Now they are also the former bureaucrats, accountants and staff officers for whom unimagined riches are suddenly possible. They are the entrepreneurs attracted to the capital by its aura of prosperity and its super-educated workforce. They are the lawyers, lobbyists and executives who work for companies that barely had a presence in Washington before the boom. During the past decade, the region added 21,000 households in the nation’s top 1 percent. No other metro area came close. Two forces triggered the boom. The share of money the government spent on weapons and other hardware shrank as service contracts nearly tripled in value. At the peak in 2010, companies based in Rep. James P. Moran’s congressional district in Northern Virginia reaped $43 billion in federal contracts — roughly as much as the state of Texas. At the same time, big companies realized that a few million spent shaping legislation could produce windfall profits. They nearly doubled the cash they poured into the capital. The signs of the new Washington are everywhere — from the Tiffany & Co. store that Fairfax County development officials boast is the most profitable in the country to the new Tesla dealership in Tysons Corner. Every morning on the Beltway, contractors, lobbyists and some of the country’s highest-paid lawyers sit in the nation’s worst traffic. Sports talk radio crackles with rants about the Redskins and the latest ads from Deltek, a firm that advises companies on “capture strategies” for winning government contracts. The radio signal doesn’t extend much beyond the Washington commute. It doesn’t have to. The ad barely makes sense to most Washingtonians, let alone those living outside the capital. At Cafe Joe, a greasy spoon near the National Security Agency in suburban Maryland, software engineers with top-secret clearances merely have to look at the place mats under their fried eggs to find federal contractors trying to entice them away from their government jobs with six-figure salaries and stock options. The place-mat ads cost $250 a week. They are sold out through 2014. The new money and jobs have raised Washington’s stature in the global economy. Tens of thousands of the nation’s best-educated workers have flocked here, some for contracting jobs, some simply to be part of the newly energized business climate. The money and brainpower have supercharged the region. Now, with lawmakers struggling to shrink the nation’s debt and contract dollars declining, Washington is revving its economic engine. If it can run on its own — if all this new wealth and brainpower can innovate and produce beyond government work — the region may be able to sustain its growth. Venture capital is already flowing in, and the thriving local economy continues to draw the nation’s best-trained workers. Essentially, Washington has been the beneficiary of a decade-long, taxpayer-funded stimulus package. “We could have been a dodo bird,” said Mark Muro, policy director at the Brookings Institution’s Metropolitan Policy Program. “Instead we are the center of the universe.” Washington has long been a place where power outshone money, where companies tried to be discreet about their influence, where defense contractors knew not to wear watches that outshone the admirals’. The new Washington has lost some of those old inhibitions and has begun to resemble other global financial centers. Power still animates the city, but so increasingly does the pursuit of wealth. Post Comment Private Reply Ignore Thread
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