Like the elected officials that come and go, Washington is in perpetual transition. It’s a markedly different creature today than it was just 10 years ago—let alone in 1800, the year it became the Nation’s Capital. It is fitting that Washington’s growing pains reflect America’s. It was almost destroyed in the War of 1812, and in the Civil War it reflected the nation’s hotly divided sentiments. It celebrated the arrival of the Second Industrial Revolution and the success of the great barons who transformed the nation’s economic landscape. It teemed with energy and a sense of sacrifice during World Wars I and II. It grew wary and then outright divided over the Korean and Vietnam Wars. It became cynical in the wake of Watergate; hopeful, then pessimistic during the Carter years; and a bit overconfident during the Reagan/Bush tenure. Clinton found himself right at home for eight years in the heavily Democratic region, while George W. Bush’s two terms were plagued with divisive issues of national security.
In recent years the United States has faced economic turmoil, foreign wars, and a wide range of other domestic and foreign problems. The burden and responsibilities of leadership fell upon Barack Obama, who upon taking his position as the country’s 44th president in January 2009 captured the attention of the world as he implemented a wide range of new laws and programs designed to put America back on its feet. His inauguration as the first African-American President was one of the most recent history-making events to take place in Washington, D.C.
While D.C. suffered from the same economic downturn as the rest of America (at least as of late 2009), there has been a strong sense of hope in the area that under the leadership of President Obama, the economy will improve, as will the many problems America is facing. In the years to come, D.C. and the rest of the country will be impacted directly by the decisions and actions taken by President Obama.
Meanwhile, the downtown area and many of the surrounding suburbs are experiencing a cultural renaissance. While growth has slowed down a bit due to the economy, trend-setting restaurants and designer boutiques, which in past years eschewed Washington as too stodgy, now compete for hot metro area locations.
To really understand where the District and its surrounding suburbs are today and where they’re headed in the twenty-first century, it’s helpful to go back a few decades, to at least the beginning of the post–World War II years. As the 1940s gave way to the ’50s, Washington’s population soared. In the nearby countryside of Maryland and Virginia, forests of oak and pastures of bluegrass yielded to subdivisions and shopping centers. Business was booming. The future looked bright. As the Federal government continued to grow dramatically during the ’60s, so did the physical size (and, some may say, the ego) of the region.
Then came a bombshell, a watershed event that changed the face of Washington and impacted the entire country: the 1968 assassination of the Reverend Martin Luther King Jr. Parts of Washington erupted into a riot zone. Many residents who could afford to do so fled to suburban enclaves. The city became a ghost town by night. The suburbs ballooned farther out, and the resulting polarization was both psychological and physical. On the one hand were the commuters, a daily influx who increased traffic problems exponentially but paid no taxes that might have helped the D.C. infrastructure meet new demands placed on it. Remaining in Washington were the riot survivors, who lived in burned-out neighborhoods a few blocks from the White House. Amidst the downtown chaos were pockets of extreme affluence: Georgetown, Foxhall Road, Embassy Row. The lines of demarcation were clear and rarely crossed.
The Vietnam War and the Watergate era, culminating in President Richard Nixon’s resignation in 1973, only added to the divisiveness in Washington. But those events also indirectly revitalized D.C. because they brought about a new era of grassroots activism. The activism resulted in closer interaction between government and industry as consumer advocates and environmental groups demanded that Washington investigate and regulate U.S. business. No large company or industry in America could afford to be without a presence in the Nation’s Capital. Some opened government relations offices, some funded industry coalitions, and some even moved their companies’ headquarters to the area. Big government started to get strong competition from big business for the Metro D.C. labor force. In reality, each was fueling the growth of the other as business realized that it would have to answer to government. At the same time government experts on industry were a labor pool in high demand by the very companies they oversaw. Many were and are wooed by the private sector, thus the infamous Washington “revolving door.”
Today, hundreds of foreign-owned firms or affiliates have a foothold here, and a quarter, or nearly 2,500, of the nation’s trade and professional associations are headquartered in Metro D.C.
The Washington area claims more than 200 telecommunications and information giants. Journalism is big business here as newspapers, wire services, news agencies, and radio and television networks (some of the world’s most prominent) call D.C. home, not to mention a complex network of bloggers. A handful of Fortune 500 companies also call the Metro area home.
But Washington’s growth hasn’t all been an easy, downhill coast. In the mid- to late 1980s, local business development officials used to talk of Washington’s “recession-proof” economy. They touted the fact that the federal government’s employment and spending base had a stabilizing effect on the economy and that the diversity of business here was too great to allow for any major slowdowns.
Well, things didn’t quite turn out that way. Washington, like everywhere else, was hit hard by the recession of the early 1990s. Commercial real estate, already dangerously overbuilt, took a beating, primarily due to unleased existing space and a dramatic slowdown in new development. Defense contractors awoke to a post–Cold War New World Order and an anticipation of scarcer federal outlays. Banks failed. Engineers, architects, technicians, and journalists, among others, were handed pink slips faster than Congress writes checks. Local governments wrestled with fiscal problems. Those accustomed to the prosperity of the ’80s were thinking the world was coming to an end.
But in recent years (prior to the country’s current economic downturn), the Washington economy grew faster than anyone imagined. Unemployment dropped to a record low of 2.6 percent in some suburban areas. With booming job growth, especially in the technology sector, record home construction, and a thriving, even frantic, home sales market, no one imagined Washington’s economic bubble would burst.
But with job loss already on the rise since late 2000 as technology jobs disappeared, the terrorist attacks in September 2001 fueled the unemployment rate. The region’s unemployment rate rose to 3.6 percent in the aftermath of the tech bust and then leveled off at 3.4 percent. However, more people moved to the region than new jobs were created, thus leading to a drop in overall employment.
As of January 2009, the Washington, D.C. unemployment rate was 9.3 percent. By June 2009, the unemployment rate was up to 10.7 percent, although similar unemployment rates could be found across the United States, so the D.C. area was no better or worse off than most metropolitan cities based on the overall economic situation facing the country.
One factor keeping the unemployment rate from worsening these days is the enormous amount of money the government has pumped into the region to fight the war on terrorism.
Although the business development people may have blown their recession-proof theory, they were on target as far as the diversity of the economy is concerned. The region’s broad mix of industry is one of the great untold economic stories of the past two decades.
Today, private-sector jobs outnumber government jobs practically four to one, with much of the job growth in high-tech and service industries. At the same time, Washington’s growing stature as a high-tech and international business center has brought the benefit of a more robust and flexible economy.
A culture of entrepreneurship is growing in the region, fueled by the still-strong presence of new telecommunications and Internet-related businesses, especially in the suburbs of Northern Virginia and Maryland.
Although the District lost 5.2 percent of its population between 1990 and 2000, outlying counties gained huge numbers of people: Loudoun County’s population nearly doubled, while Prince William’s grew by 30 percent. Both are projected to nearly double again by 2010.
Unfortunately, this recent growth has deepened the divisions between the “haves” and “have-nots” in the metro area. Increasingly, better-off communities lie west of Interstate 95 in the suburbs and 16th Street in the city (with some exceptions in Prince George’s County). So although one half of the area enjoys robust growth, there’s not enough growth in large parts of the eastern half, according to a study released by the Brookings Institution.
Practically every block of the District’s major historic artery, Pennsylvania Avenue, has been renovated with new plazas, office space, retail areas, theaters, restaurants, and more. The “Avenue of the Presidents,” once deserted by night, has again become a thriving thoroughfare, and its renewal has sparked development throughout the rest of downtown. On Capitol Hill, Washington’s historic Union Station was painstakingly restored over several years and is now the “grande dame” of all train stations. It houses Amtrak corporate headquarters and serves as their flagship station, with trains arriving and departing from beneath the magnificent, statue-lined roof.
In the District of Columbia, information and power spring not only from business and government but also from global financial institutions such as the World Bank and the International Monetary Fund. Equally vital are the city’s 150-plus embassies that provide instant access to commercial and government representatives from nearly every nation.