The DC Area’s Natural Experiment

July 23rd, 2011 at 11:41 pm

I gave a talk last night on economic development in the DC region and there were “problems” with the PowerPoint system (who could have guessed that would happen?!?).  I liked some of the slides I came up with and if I don’t use any of them here, they may never be seen.  (I know…how tragic…)

This one shows employment growth in the DC region relative to the nation from the Great Recession until now.  It’s not like our area is totally insulated from recession, but the countercyclical expansion of federal spending does give the region a notable edge compared to much of the rest of the country.  (Though the point of my presentation was that with the fed gov’t poised for contraction, our region needs to diversify.)

Note how the jobs line for the DC region is flat while that of the nation falls steeply.  It’s a bit of a natural experiment: if you actually apply some serious Keynesian stimulus, you can minimize job losses.

Source: BLS (my seasonal adjustment of DC regional data)

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5 comments in reply to "The DC Area’s Natural Experiment"

  1. David R says:

    And the nice thing is that Virginia’s Republican Governor gets to take most of the credit for the job growth while blaming Obama for deficit spending increases.

    • Jared Bernstein says:

      Exactly–during Recovery Act we saw a lot of this from R governors: “this program stinks!…now, where’s that check?! Reminds one of the old Catskills joke–“the food at this hotel stinks!” “Yeah, and the portions are so small!”

  2. emptywheel says:

    Don’t you need to also look at the internal differences here? After all, DC city’s UE has remained stagnant, but at a level which now makes it among the worst in the country.

    It still seems like the stability in DC area is Military Industrial Complex spending–which ends up benefiting the affluent a lot more than the poor. That still means it’s stimulus, just stimulus immune from DC’s political infighting.

  3. Mary says:

    This is an older article, but you may find some of his observations interesting.

  4. Sandwichman says:

    Slightly OT, but still on the issue of employment, have you seen this?:

    U.S. Ambassador to Germany a Big Fan of Kurzarbeit

    GlobalPost: Ambassador Philip Murphy speaks out on the European debt crisis, the importance of Berlin on the world stage, and what Germans really think of Barack Obama.

    “Germanyʼs economy has made quite a successful turnaround since the Great Recession. What can the German example teach America?”

    “There are two lessons that Germany can teach. One is that it still manufactures stuff that the world wants to buy and as a big percentage of its economy. That number has gone too far down in our economy. We manufacture less in our economy than we used to. We have to get that back up. The second thing I am a big fan of is “Kurzarbeit” [a scheme where a workerʼs total number of hours each week are reduced to avoid layoffs, with the government covering part of salaries]. I think it’s a great model.”