Location, location, location!

If you wanted another sign of our end-of-empire times, you could do worse than consider the report by today’s Washington Post on Washington, D.C. metropolitan area residential real estate values. It seems that the enclaves of our modern Forbidden City are one of only four metropolitan areas that has shown an increase in residential real estate prices over the previous 12 months. The other three are all in California which had suffered from a much more severe price down-turn than our own Oz. Washington’s increase was by far the greatest, 3.7%, and is especially impressive when compared to metropolitan areas that have to make due with enterprises other than dealing the with federal government—for example, Portland, -5.2, Chicago, -6.5, Dallas, -3.1, Charlotte,
-4.2, Atlanta, -6.2, Seattle, -4.1.

Of course, the price rise owes to the availability of high-paying jobs. And there are a lot of such jobs around the Mecca of all payola. We found out last month that the only two counties in the US where median annual household incomes surpass $100,000 are Fairfax and Loudoun counties in Virginia. So what pays these large and numerous incomes? A great medical research institution that seeks to prolong life? An engineering operation that is looking how to save the planet or ameliorate our lot a bit? A center of great learning whose job it is to reduce ignorance and preserve the best of mankind? Entrepreneurs who can devise and deliver products or services that people want? Well, no. See how the highest paid of our fellow workers are employed in a wealthy DC suburb (also sporting annual incomes of $100,000+), Falls Church, Va. “Professionals,” data managers, “technical.”

If you want to make money, as I once heard someone say, see where large sums are trading hands and try to get between. This, of course, was what it was that built Wall Street. But now, when Wall Street has to be a bit more discrete in raking in wealth, the real source of money manipulation is where our rulers sit court. They themselves are quite happy—nay, they insist—on collecting vast sums of money so that they can persuade you of their need to return to Washington. So they have to do business with those who have large amounts of disposable cash. Businessmen, however, don’t give money for public interest; their shareholders would object. So they generally focus their spending on such things that would preserve their oligopolies, or market share, or continue or increase their government revenue stream. But since America is not a third-world country, a CEO can’t just wire money directly to a Congressman’s or Commissioner’s bank account with instructions. No, they must hire go-betweens: lobbyists, lawyers, “technicians.” These are the ones who draw the connection between contributions and killing the public option or preventing Americans from buying drugs from abroad. They are the ones who secure contracts for Blackwater or Halliburton. They are the ones who explain how the public benefits when a particular corporation obtains a monopoly or favored position or some public good is regulated for their benefit.

If you want to see how essential is the role of government lobbying. Take the case of Google. Google once believed that it could prevail by applying engineering smarts to real world problems. But reality struck and it found that it needed a vast array of lobbyists and insiders to do business in a country where competition is more fierce for government favors than market approval.

And of course really good government-specialized lawyers, lobbyists and “technicians” can really save you a pretty penny. Take, for instance, another Washington Post story from today about how companies can repatriate money they “earned” abroad without paying taxes. One of the heart-warming tales of hard-working consultants ended happily: Merck was able to repatriate $9 billion dollars without paying taxes. (Merck needed the money not to be used in research, of course, or even hiring—just to buy another company to enhance its oligopoly position.) This was a big item in the CEO-meeting with the President last month, where he was seeking “cooperation” in reducing unemployment. The solutions these patriots always come up with is that they avoid taxes to the extent feasible (and vastly beyond).

So if you have or know school-aged children who want to know what kind of skills will be necessary to succeed in the American economy of the 21st Century, you can confidently tell then that there really are only two: 1) The skill of having inherited large sums of money; or failing that 2) the ability to act as a go-between–skillfully matching the wants of those possessing large sums and money and those with the skills to raise enough money to become our rulers.

And if they can’t manage that, they can also be a data technician. Our rulers will still need to keep track of us.

  1. January 10th, 2011

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