Saturday, October 23, 2010

Boomtown District Of Columbia

Yesterday, a report about employment and unemployment in various American states was released. One of the most interesting facts was that District of Columbia (aka Washington D.C. or simply Washington) had a lot stronger employment growth than any other state, rising 2.3% in September 2010 compared to August 2010 and 3.3% compared to September 2009.

Why is District of Columbia growing so fast? Well, it might just ben related to the fact that District of Columbia is the seat of the U.S. federal government, and the fact that the federal government is growing rapidly.

That is confirmed by the national employment statistics which said that federal employment rose by 0.9% during the latest year. If you exclude the U.S. Postal service, which operates under a different mechanism (and has its employees spread out through the country to a higher extent) than normal government agencies, federal employment is up by as nuch as 3.2%.

So contrary to the assertions of Paul Krugman, Menzie Chinn and some other leftist economists, the U.S. federal government under Obama is growing rapidly not just in terms of the cost of transfer payments handed out but also in terms of employment. That state and local governments (and the Postal service) makes different decisions doesn't change the fact that government directly controlled by Obama and the Democratic Congress has expanded a lot.