In nation's capital, the government robs from the poor and gives to the rich

Rick Moran
Reuters has begun a series of articles on income inequality in America and lo and behold, they discovered that a major culprit behind the gap is the government itself.

The initial offering in the series details what has happened in Washington, D.C. since the "War on Poverty" began:

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government's help. And the rich are getting richer because of it.

The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 - a ratio of 54 to 1.

That gap is up from 39 to 1 two decades ago. It's wider than in any of the 50 states and all but two major cities. This at a time when income inequality in the United States as a whole has risen to levels last seen in the years before the Great Depression.

mericans have just emerged from a close presidential election in which the government's role as a leveling force was fiercely debated. The right argued the state does too much; the left, too little. The issue is now at the center of tense negotiations over whose taxes to raise and what social programs to cut before a Jan. 1 deadline. And the government's role will be paramount again next year if Congress takes up tax reform.

The federal government does redistribute wealth down to struggling Americans. But in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too - especially in the nation's capital.

The beneficiaries are not the billionaire financiers and celebrities who have come to personify income inequality in the 21st century. Yet the Washington elite are just as much part of the trend, having influenced laws and decisions that alter the entire country's distribution of income.

"This series of articles explores how government is exacerbating or alleviating the causes and consequences of inequality, by examining three places where the rich-poor gap has widened," the authors write. Those three places are Massachusetts, Indiana, and DC.

And what the government has done for the rich in Washington is incredible:

Two decades of record federal spending and expanding regulation have fostered a growing upper class of federal contractors, lobbyists and lawyers in the District of Columbia area. The federal government funneled $83.5 billion their way in defense and other work in 2010 - an increase of more than 300 percent since 1989, even after adjusting for inflation. Private industry poured more than $3 billion into lobbying to influence the government, nearly double what it spent a decade ago.

Like spokes on a wheel, the high-rise offices of this elite radiate out from Capitol Hill along major arteries deep into suburban Maryland and Virginia. The latest Census figures placed 10 of the capital's surrounding counties in the top 20 nationwide for median household income - up from six in 1990.

I suppose it was inevitable. Those best able to tap into the federal spigot and draw out massive amounts of cash live and work in Washington and the surrounding countryside. Willie Sutton's famous explanation for why he robbed banks - because that's where the money is - can be applied to DC as well. The reason for all that government infrastructure is because Washington is where the tax dollars are. And siphoning the wealth of the American people into the maws of lobbying firms, defense contractors, and others who have learned how to use their influence to recieve contracts and benefits from government appears to be the #1 industry in the nation's capital.




Reuters has begun a series of articles on income inequality in America and lo and behold, they discovered that a major culprit behind the gap is the government itself.

The initial offering in the series details what has happened in Washington, D.C. since the "War on Poverty" began:

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government's help. And the rich are getting richer because of it.

The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 - a ratio of 54 to 1.

That gap is up from 39 to 1 two decades ago. It's wider than in any of the 50 states and all but two major cities. This at a time when income inequality in the United States as a whole has risen to levels last seen in the years before the Great Depression.

mericans have just emerged from a close presidential election in which the government's role as a leveling force was fiercely debated. The right argued the state does too much; the left, too little. The issue is now at the center of tense negotiations over whose taxes to raise and what social programs to cut before a Jan. 1 deadline. And the government's role will be paramount again next year if Congress takes up tax reform.

The federal government does redistribute wealth down to struggling Americans. But in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too - especially in the nation's capital.

The beneficiaries are not the billionaire financiers and celebrities who have come to personify income inequality in the 21st century. Yet the Washington elite are just as much part of the trend, having influenced laws and decisions that alter the entire country's distribution of income.

"This series of articles explores how government is exacerbating or alleviating the causes and consequences of inequality, by examining three places where the rich-poor gap has widened," the authors write. Those three places are Massachusetts, Indiana, and DC.

And what the government has done for the rich in Washington is incredible:

Two decades of record federal spending and expanding regulation have fostered a growing upper class of federal contractors, lobbyists and lawyers in the District of Columbia area. The federal government funneled $83.5 billion their way in defense and other work in 2010 - an increase of more than 300 percent since 1989, even after adjusting for inflation. Private industry poured more than $3 billion into lobbying to influence the government, nearly double what it spent a decade ago.

Like spokes on a wheel, the high-rise offices of this elite radiate out from Capitol Hill along major arteries deep into suburban Maryland and Virginia. The latest Census figures placed 10 of the capital's surrounding counties in the top 20 nationwide for median household income - up from six in 1990.

I suppose it was inevitable. Those best able to tap into the federal spigot and draw out massive amounts of cash live and work in Washington and the surrounding countryside. Willie Sutton's famous explanation for why he robbed banks - because that's where the money is - can be applied to DC as well. The reason for all that government infrastructure is because Washington is where the tax dollars are. And siphoning the wealth of the American people into the maws of lobbying firms, defense contractors, and others who have learned how to use their influence to recieve contracts and benefits from government appears to be the #1 industry in the nation's capital.