The Fiscal Problem of Being Washington, DC

“Washington, DC: America’s visible, invisible city. Actually two cities; one rich, one poor. One with power, another relatively powerless. It’s white, it’s black, it’s there…but it’s not.”
— Anthony Bordain (from a particularly good episode of No Reservations)

Public policy matters!

I sometimes find myself in the curious position of having to defend this idea from those who would dismiss government as a sham and policy as, “some kind of dodge, or hussle.” Of course I do have sympathy for these folks, because the State tends to be violent and oppressive and there is a good body of evidence to suggest that government is not particularly good at solving social problems. However, there *are* real gains in human happiness that can be achieved by tweaking bad policy into good.

Dr. Alice M. Rivlin from The Brookings Institution has provided a poignant example. (it’s a PDF)

The gist of the chapter is that DC can’t collect taxes for income earned within its borders by non-residents, creating a kind of tax haven for the federal government and those who provide goods and services to said government. These people are the rich (and white) who tend to work within DC but for the most part live outside of it. The District then finds itself cash strapped and unable to provide basic services to its largely poor, black population.

Why is DC so messed up? Rivlin estimates that it misses out on 2/3rds of its revenue base! That might have something to do with it!

The pecuniary problems of the District have been apparent to me at least since I started middle school. I would carpool in from the outskirts to go to a Catholic school in Northeast and every day I would see the obvious signs of poverty as we went eastward. You just don’t expect to see urban decay and de facto segregation in the capitol of the richest country in the world. Indeed the whole reason I was making this trek was to avoid the notorious DC public education system — which is only one aspect of the District’s creaking infrastructure.

It’s snowing as I write this. I like winter’s haunting beauty as much as the next guy, but it is annoying to know that the DC side of Western Avenue will not be plowed for days while the Montgomery County side gets the royal treatment…

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2 Responses to “The Fiscal Problem of Being Washington, DC”

  1. William Bruntrager Says:

    You seem to be confusing the claim that “government is coercive and always motived by the same desire (i.e. staying in power)” with the claim that “government can’t make any group better off.” Of course it can! It accomplishes this feat by making some other group worse off. If it didn’t, it wouldn’t need to be using coercion.

    A common, and weak, argument against anarchism, is to say “But what would happen to poor people who can’t afford protection?” to which I respond “Are you kidding? Look at what happens to poor people under the current system!” How much police and legal protection do you think the poorest communities enjoy? Think about the effects of the “War on Drugs” and then talk about whether the allegedly “free” police services provided by the government are helping the poorest people in our society.

    You assume that because you want the government to take from the rich and give to the poor, that’s what most governments actually do. Sadly, the reality is that the reverse is much more common. Is it impossible that DC could have had better public policy, created by politicians motivated to improve the city rather than benefit themselves by creating a tax haven? Counterfactuals being what they are, I can’t know for sure, but I strongly doubt it.

    Okay, some governments are better than others, etc. Fine. You can get better results by “tweaking public policy”? Well, who do you expect will do the tweaking? The real argument of the critics is not that there is no such thing as good and bad government, but that the quality of government is, if not fixed, well entrenched. Bad incentives lead to more bad incentives. Good incentives lead to more good incentives. You want good government in DC, but you can’t get there from here.

  2. tripinchina Says:

    The thing is, I pretty much agree with you. We should smash the State. I continue to be shocked that you never read Chomsky.

    That said, “some governments are better than others” is all I’m really after here. Well, that *and* it follows that who’s in power makes a real difference. Hence we can agitate for (or think about) an anarchist future as much as we want, but we should also pay attention to politics and policy as it exists in the present. In this instance, there are plenty of beleaguered city officials and DC school children who stand to benefit.

    Actually Chomsky got a lot of flack for supporting Kerry in the 2004 election, since whichever candidate won would surely continue America’s racist and oppressive foreign policy regime. But Kerry was the lesser of two evils…

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