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Region's Private Sector Isn't So Private
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Washington always booms in times of national crisis, and that is why it's booming today, more than any other region in our nation.
During the 2004 presidential campaign, much was made of the fact that total employment in the United States barely grew from early 2001 to late 2004. First there was the technology stock meltdown of 2000 and the ensuing bear market in all stocks.
The nation suffered its first economic recession in a decade. Business profits plunged, and many companies cut back their employment or ceased hiring. Then came the economic and psychological trauma of Sept. 11, 2001, followed by wars in Afghanistan and Iraq.
Most large metro areas saw their total employment stagnate or decline in the early 2000s. New York, Boston, Chicago and San Francisco suffered net job losses.
It was the rare million-plus metro area that gained any jobs at all. But for job growth among top 10 metro areas, Washington was No. 1 by a mile. We left the rest of America in the dust of our torrid job creation over the past seven years -- more than 350,000 net new jobs. Washington prospered economically from national crisis and the attendant growth in government -- the war on terrorism and two foreign wars.
The surge in federal spending on homeland security and defense will gradually taper off, and our annual number of net new jobs will taper off, too -- from the incredible 70,000 to 80,000 of some recent years to a still-pretty-amazing 50,000 a year.
Washington will keep growing for one simple reason: Complex national and international challenges always lead to an expansion of federal power.
The next major expansions of federal power will be in environmental and energy regulation, as global warming becomes the hot new crisis of this century. And it will occur in national health-care regulation. Washington will benefit from the growing complexity of international trade, with more trade disputes, and from litigation over technology patent law. These will keep Washington's lawyers and trade associations in clover for years to come.
Knight Kiplinger, a lifelong Washington area resident, is editor in chief and president of Kiplinger Washington Editors Inc., publisher of the Kiplinger Letter and Kiplinger's Personal Finance magazine. His commentary is adapted from a speech Wednesday to the Greater Washington Initiative, a marketing group that gets support from several area firms, including The Washington Post Co.
