Income Figures Present a Warning Sign for the Incumbent

If we hosted a poll asking readers to guess which metropolitan area had the highest average income last year, Silicon Valley might rate highly. However, though its well-educated residents work in potentially very lucrative ventures, the area around San Jose only came in second. Perhaps with all of the anger being directed toward Wall St. these days, it is the land of bankers which would top the list. That would be another good guess, but the New York City metro area wasn't in the lead last year either.

According to Census Bureau figures, even though nearly 11% of the area's residents qualify as 'very poor,' the bragging rights actually go to the Washington, DC area. According to Bloomberg, "Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose (ie Silicon Valley)." Overall, the average household in DC makes nearly $85,000. Meanwhile, the national average was just over $50,000.

Sara Kline, a Moody's analyst interviewed for the Bloomberg piece, suggested that it was government spending which has enabled the area around the capital to weather the recession more easily than the rest of the nation. There is, of course, a plausible economic argument that as this government spending has helped the employment rate in DC, it has therefore boosted the national economy. Spending created well-paid jobs for federal employees, and the management of the political process created additional trickle-down jobs in the form of the lobbyists and lawyers. An economist might label this a sort of bureaucratic multiplier effect.

However, economics could also be used to point out that this was done at the expense of increasing the national debt. In addition, as a purely practical matter, it is unlikely that an angry and underemployed public would view the proliferation of highly-compensated federal jobs on the public dime to be a benefit to the economy, regardless of whether statistics could be found to support the notion. On the contrary, such jobs are more likely to be decried as excessive and another example of how government has gotten 'too big.'

It is clear that Wall Street has drawn the bulk of the ire of the American public recently. Indeed, the perception of the nation's banking establishment likely hasn't been this poor since trust busting was in vogue. However even if 'Big Government' has found a reprieve in the Occupy Movement, anger at government spending is never far from the surface. If I were one of President Obama's advisers, I would be trying to figure out a way to deflect criticism over Washington's political class. Indeed, it wouldn't be too much of a stretch to think that populist politics in 2012 could dictate the President disassociating himself from the very spending he has for so long championed.

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