Post Magazine: The Doom Boom

Since al-Qaeda declared war on Washington five years ago, the federalcity has responded the way it knows best: by throwing money at the problem.As a result, the local economy has gotten its biggest boost since Pearl Harbor.

David Von Drehle, whose story about the Doom Boom appeared in Sunday's Washington Post Magazine , was online Monday, April 10, at 1 p.m. ET to field questions and comments.

David Von Drehle is a Magazine staff writer.

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David Von Drehle: Greetings. Thanks for reading my piece in yesterday's magazine. Bad news is good news for Washington, D.C. and what doesn't kill us makes us richer.

If you missed it, be sure to check out today's front-pager by my colleague Ellen McCarthy. She introduces us to some of the newly wealthy Doom Boomers.

Let's go to the questions ...

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Bowie, Md: Great piece.

The one question that your article doesn't specifically address is the impact of the Doom Boom on local residential real estate. Everyone has been talking about a "bubble" and things certainly have felt frothy since 2000 (baking cookies and sending notes with pictures of children to "win" the right to pay over the asking price for a house?)

But the history of these booms, as you so eloquently document, is that people move here to tackle the present crisis--and stay. So did any of your sources have any opinions about the likelihood of DC facing a housing market like Houston in the 1980s, when the boom is over and housing prices fall by half?

David Von Drehle: I appreciate the kind words. As a Washington-area homeowner myself, I was also curious about that very question.

The experts I spoke to were not forecasting a big drop in Washington area real estate prices--though few were anticipating a continuation of the amazing escalation of recent years. Rising interest rates, if nothing else, will tend to cool things down.

But Washington has both a hot jobs market and a relatively slow-growth approach to local home building. WAIT, wait! I know folks who see the new developments sprawling west to the Blue Ridge and south to the Rappahannock are scoffing, but I'm speaking in in comparison to places like Houston ...

The combination of job growth and udersupply of housing means that tens of thousands of new Washington-area workers cannot find Washington-area homes. They commute from Annapolis, Baltimore, Stafford County, etc. That should work to prevent a collapse in area home prices.

Let me note here that my brilliant colleague STeve Pearlstein tends to take a gloomier view ...

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washingtonpost.com: Contractors Cash Out but Try to Stay Humble , (April 10, 2006)

David Von Drehle: Here's that story I mentioned:

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Palo Alto, Calif: The Doom Boom is also the focal point of several ongoing Federal Procurement Investigations (former Rep. Cunningham, MZM Inc., former White House Procurement Director David Safavian, etc....)

How do you think the sudden surge of Federal Spending has affected the integrity of the Federal Procurement System?

David Von Drehle: Excellent question.

I mentioned in my story that something like one-third of all the start-up wartime spending during the Civil War was wasted -- and by "wasted" we're really saying "stolen" or "bilked."

I for one would be surprised if similar abuses have not gone on during the past four years. Massive spending, emergency conditions, confused bureaucracies and one-party government tend to create ideal conditions for graft.

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Washington, D.C.: Are there any watchdog groups to ensure that money from American taxpayers don't go to contractors motivated by greed? I keep hearing about contractors hiring, not necessarily great talents or proven managers, but anyone who fits a specific profile (ie, degreed or certified from any so-called institution spawned by the internet) just so they can bill more to the government and increase their bottom line.

David Von Drehle: There are many watchdog groups. The government agencies have internal wathdogs in their Inspector General shops. The government has a watchdog agency in the General Accounting Office. Local newspapers like the San Diego Union try to keep an eye on local Congressmen--in the Union's case, Duke Cunningham. National newsapers like this one also try to keep watch. This year, The Post has won honors for our investigations of homeland security contracting and of Jack Abramoff's lobbying. There are lots of dedicated public interest groups, and lots of prosecutors on the hunt for public corruption.

The problem is ... there is SO MUCH MONEY out there. Hundreds of billions of dollars on top of the trillions that were already being spent. Imagine trying to eliminate a colony of ants by picking them up one at a time with tweezers. That's what it is like, in an era such as ours, to try to track every contract and weigh every transaction.

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Washington, D.C: Do you think Ft. Meade area is going to get a lot of federal money because NSA is located there?

David Von Drehle: Yup. I think the Ft. Meade area is going to experience a Doom Boom thanks to NSA and other Pentagon-ordered relocations.

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Britain: Hello David. Don't you have some fear that United States is moving away from the once free and open market economy, and, what I sense from your excelent article, towards a more intrusive, suspicious and restrictive way of doing business. Is US slowly becoming less attractive as a commercial environment? With surveillance already here, and other securities measures yet to be introduced, do you think that investors will be repelled from the land of opportunity. From James, U.K.

David Von Drehle: Glad you liked the article. Thanks for the intriguing question.

It seems to me that commerce is just one of many realms of American life that will be wrestling in the coming years with the competing impulses--between fear and exuberance, the bollard and the crane.

That said, I don't see much sign yet of a slump in the desire to invest in the American economy. Foreign investors continue to buy U.S. debt and to seek positions in what is still a growing economy.

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David Von Drehle: We'll leave it at that. Thanks again for your interest, and please -- keep reading!

David

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