Washington, D.C.’s Other 1-Percent Problem
The nation’s capital is more about what you own these days than what you do.
More than 35 years ago, a colleague and I attended the White House Correspondents’ Dinner to collect an award for investigative reporting for the news service where we worked.
The tables at that black-tie affair were sponsored by the nation’s leading newspapers, wire services and press syndicates. The attendees included a lot of big-name journalists, along with members of Congress and senior administration officials. President Jerry Ford handed us our (modest) check, which was signed by Ben Bradlee, who then, in the wake of the Watergate scandal, was perhaps the most famous editor in America. For a young journalist and his researcher, it was pretty cool.
I’m glad I saw it when I did because now I wouldn’t want to go back. The dinner has evolved (or devolved) into a self-important, narcissistic gathering of corporate chieftains, big-name lobbyists, Hollywood celebrities, reality TV stars and a different breed of journalists -- more from TV, especially cable TV, and glamour magazines like Vanity Fair than The New York Times. A few old-time journalists grouse about the change, but for the most part, the coverage, replete with photos of women in fancy dress and men in tuxedos, is all breathless and gushy.
As much as anything, the dinner reeks of a mixture of hyper-affluence, celebrity and power. And it is emblematic of a profound change that has seeped in since I began my career here almost 45 years ago, when what you were worth had more to do with what you did than what you owned. Sure, there were some wealthy people in Congress and the various administrations. But what really mattered was how much influence you exerted on shaping policy.
That’s no longer true. Power still is important, but money plays a much more critical role in the city, both within the political community and in a much larger social structure reflective of an expanded, more diverse economy.
Put simply, Washington has become a very wealthy town. It recently became the fastest growing city in the nation. Its regional economy has been expanding at a rate almost five times faster than the rest of the country. The city’s highest-earning population -- its top 1 percent -- has seen its annual household income soar to a minimum of $617,000, even in the midst of a recession, according to Sentier Research.
Signs of the ascendancy of affluence are everywhere. The local city magazine, the Washingtonian, is loaded with ads for high-end clothing stores, spas and plastic surgeons. A recent cover story featured the 50 most expensive houses in the region, starting at $7.2 million and topping out at $45 million. But the Washingtonian almost reads like the Public Affairs Quarterly compared to something called Washington Life, which describes itself as “the premier luxury-lifestyle magazine in the National Capital Region, published since 1991 by well-connected lifelong Washingtonians who have exceptional insight into the community.” With cover stories like “The Power 100,” “The A-List,” “The 100 Most Invited,” and a regular feature called “Pollywood” (Hollywood on the Potomac), you get some idea of the community being served.
Unsurprisingly, the overall increase in wealth is reflected in Congress. A recent analysis in the Capitol Hill newspaper Roll Call, using the minimum valuations listed in disclosure forms (not including personal homes), found that members of Congress have enjoyed a 25 percent increase in net worth in just three years. This is at a time when the median net worth of families nationally has fallen by 39 percent, according to the Federal Reserve.
The question is whether that wealth increase is also connected to power. Exhaustive investigations by The Washington Post and 60 Minutes provide some disturbing answers. Basically, some “130 members or their families have traded stocks worth hundreds of millions of dollars in companies lobbying on bills that came before their committees, a practice that is permitted under current ethics rules,” according to the Post. Not only that, but congressional leaders of both parties had adjusted their portfolios after intense discussions with administration and Federal Reserve officials during the worst of the financial meltdown in 2008.
But the real surge in affluence is in the law and lobby firms, the major trade groups and professional associations that surround the Capitol. A National Journal listing of annual total compensation for current and former heads of major trade groups range from $5.6 million at the Business Roundtable to $1.7 million at the American Coalition for Clean Coal Electricity. The same with law firms: A recent news item reported that the financial disclosure of a lawyer who had been nominated as inspector general of the Justice Department showed that he had been paid $4.6 million by his firm in 2010 and the first six months of 2011.
It goes on. One of the greatest concentrations of wealth resides in the private corporations that do an increasing amount of the government’s work, particularly in the defense and IT sectors.
If there is an Achilles’ heel, it is due in large part to Washington’s own dysfunction. The so-called “fiscal cliff” looms ahead at the turn of the year, when scheduled massive budget cuts and tax increases threaten to end the frivolity in Pollywood.
Somehow, I’m guessing it won’t happen.