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At various times in American history, cities or regions have become symbolic of capitalist success. People who lived in these cities and areas in their heydays led the country in personal income.
In the 1930s, it was Hollywood. Even with depression gripping the nation and unemployment as high as 25 percent, people who worked in Hollywood’s film industry earned high incomes, had plenty of work and lived well.
At the same time, many parts of Texas looked like the place to be. Tyler and the surrounding area essentially sat out the Great Depression, a fact made possible by the prodigious output of the East Texas oil field.
After World War II, demand for automobiles made Detroit the capital of industrial success for the entire world. In a country that was riding high on the post-war economic boom, Detroit rode higher still. No longer in the top 10 today, in 1950, Detroit was the fifth largest city in the United States.
Recently, it has been California’s Silicon Valley, home to Apple, Hewlett-Packard, eBay, Google and a host of other high-tech giants. One third of all venture capital invested in the United States in the past decade was invested in the Silicon Valley. The iconic and wildly successful products of Apple constitute just a small part of the economic output of the area around San Jose, California. Innovative products on the cutting edge of technology and culture with worldwide markets helped crown the Silicon Valley as the highest household income area in the country.
But no more.
Today, if you want to live where the average income is highest, it’s not Silicon Valley. It’s Washington, D.C. According to the Census Bureau, the average household income in Washington is $84,523. The average for the rest of the nation: $50,126.
Washington, D.C., which produces nothing, now has the highest paid workers in the country. The average federal employee in Washington makes a staggering $126,000 per year.
And just for perspective, let’s don’t simply compare Washington to the heyday of the auto industry in Detroit or the high tech boom in the Silicon Valley. Washington doesn’t even produce the prosaic carpet and floor covering of Dalton, Georgia; or the arcane radio and television transmission equipment of Quincy, Illinois; and certainly not the much-maligned corporate jets of Wichita, Kansas.
Washington, D.C. is perhaps the ultimate company town. Yet it doesn’t produce anything.
Never did the founding fathers envision that a constitutionally-limited central government would one day become the largest single employer with the highest paid workers in the land.
The founders understood that wealth is created by producing goods and services upon which people, acting of their own free will, place economic value. They then set about creating an environment in which that could happen.
So I’ll say it again. Government produces nothing. It has no capital of its own. It is by its very nature parasitic. The money to pay the lavish salaries of federal employees is not given freely. It is confiscated from productive citizens in the form of taxes. Therefore government is, and can forever only be, a net consumer of wealth.
Thus the inescapable fact that the richer the wages of those government employees in Washington, D.C. become, the poorer the rest of the nation becomes.
That government has never been bigger — and that the economy has never been so persistently weak — is no mere coincidence.