Why is DC so rich? It's the lobbying, not the policy.

D.C.'s Riches: More Lobbying Over Less

D.C.'s Riches: More Lobbying Over Less

Moneybox
A blog about business and economics.
Sept. 25 2012 11:57 AM

D.C.'s Riches: More Lobbying Over Less

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A man in his underwear and a tie holds a sign at Dupont Circle in Washington,DC on August 2, 2011 as part of a drive by clothes store Men's Wearhouse to collect used men's clothes for at-risk people transitioning into the workforce.

Photo by NICHOLAS KAMM/AFP/Getty Images

I'm not sure my post yesterday on how the D.C. metro area came to be so rich persuaded anyone, but Dylan Matthews has gone and presented a more rigorous version of the argument with charts and graphs that will finally make it real: The income surge in D.C. is about a surge in spending on influence-peddling that's not matched by a comparable change in the volume or composition of federal spending or regulation.

Maybe a different way of thinking about it from what I wrote yesterday is to go back to a 2003 article by Stephen Ansolabehere, John M. de Figueiredo, and James M. Snyder called "Why Is There So Little Money in U.S. Politics?"

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Their somewhat Slatepitches view was that as much as people deplore the high volume of political spending (or at least did in the early aughts, when the bipartisan McCain-Feingold push against "soft money" was in its heyday) that actually the influence-peddling sector seemed to be undercapitalized relative to the stakes. The federal government, they argued, was a really big deal and people weren't spending a commensurate amount of money on trying to shape outcomes. But they were writing a time when the amount of money in politics was already rapidly rising—rising in a way that was alarming people and setting the stage for their contrarian take—and in the intervening decade it's just kept on rising.

A lot of commentators want to see this surge in influence-peddling as reflecting a change in public policy—"big government" has somehow made influence-peddling more worthwhile—but the evidence of past research is that it's simply would-be influencers catching up to a longstanding reality.