5 Places Where the Rich Got Richer -- Mostly on the Government's Dime
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This story originally appeared atSalon.
Census Bureau data released recently shows how five of America’s wealthiest counties have gotten wealthier while most of the rest of the country endures foreclosures, joblessness and recession.
As the Occupy Wall Street movement has zeroed in on the wealthiest 1 percent of Americans who dominate politics, the geography of American wealth and poverty displays a slightly more complicated picture. Some of the country’s richest counties are flourishing as bastions of the upper middle class or just plain rich — but not necessarily of the super rich. These are already well-to-do areas where median income has grown since the recession began in 2007. In this sample, only one, Rockland County, N.Y., is partially fueled by Wall Street money.
The others, selected for geographic and economic diversity, embody the contradictions of a country that often rejects government rhetorically while embracing it practically.
In Loudoun County, Va., many are benefiting from ever more privatized government and military spending by the federal government.
In Wyoming, Gillette County makes much of its money from the extraction of low-sulfur coal made commercially profitable by the Clean Air Act.
Fayette County, Ga., and Rockwall County, Texas, are wellsprings of the Tea Party movement. Though the government funded the mortgages in their suburbs and paid for the highways that connect them, many residents in these areas persist in believing that their success has little to do with government.
In so many ways, we all pay for America’s few economic bright spots.
1.Loudoun County is the wealthiest county in the Washington, D.C., metropolitan area and has the highest median income of any county in the nation: $116,802 per household. Among the richest fifth of the county households income has grown 11.5 percent since 2007.
As in much of the region, federal spending has provided it an economic buffer throughout the recession, funding a military-industrial complex on steroids, and a high-tech industry that has helped numerous localities weather the downturn.
Efforts to preserve Loudoun’s rural areas have bolstered the county’s upper-income character by keeping poorer people out and housing prices up, according to University of Washington urban historian Margaret O’Mara. Other suburbs in the Washington region, like the largely black Prince George’s County, Md., have not fared as well
The recession has made it all the more clear that government and big business, and not some mythical free market, picks winners and losers.
“If you’re out in Loudoun County, you get far enough out into the suburbs, the presence of the government recedes, and people get more and more libertarian,” says O’Mara. Residents like to think they have nothing to do with the government, she says, “but they do. If you’re looking at economic dynamism, it’s government assisted. Whether you’re an investment banker, or a defense contractor, or working in the aerospace industry, government investment is the underpinning that’s driving vitality.”
In September, a study by the Project on Government Oversight found that in 33 of 35 job categories, the government paid billions more to private companies than they would have paid government employees to do the work — on average, about twice more.
The July 2010 Washington Post series “Top Secret America” uncovered a vast new security machine created in the wake of Sept. 11. Nationwide, the Post counted 1,271 government entities and 1,931 private companies working on counterterrorism, homeland security and intelligence, employing 854,000 people holding top-secret security clearance, 265,000 of them private contractors. The Post found that contractors often pay employees twice as much as the government, and they often poach the most experienced public sector employees. Taxpayers then foot a bigger bill twice, as workers get paid a large private sector salary while receiving a government pension.
Loudoun County is a prime beneficiary. Military contractors Northrop Grumman and Lockheed Martin are located here and are neighbors to a number of top-secret government offices and suburban shopping amenities.
Fairfax County, which borders Loudoun, has the second-highest median household income nationwide. The military contractor General Dynamics, whose offices are based in Fairfax, has seen revenues grow from $10.4 billion in 2000 to $31.9 billion in 2009. Fairfax is also home to a new top-secret security complex called Liberty Crossing, which employs 1,700 federal employees and 1,200 private contractors.
“It’s not your grandfather’s military-industrial complex anymore,” says O’Mara. “It’s this privatization of defense and privatization of government services more generally.”
Loudoun County’s prosperity shows that government can be a force for economic growth. But while government critics champion privatization as a method of protecting taxpayer dollars, Loudon’s prosperity also shows how privatization funds an economic elite tied not only to the military-industrial complex but to a corporate shadow government that is taking over once-public functions.
2. A coal, oil and natural gas boom has lifted Wyoming’s economy into the stratosphere. This is what explains the relatively high median income ($76,863) in Campbell County, home to the rich coal beds of the Powder River Basin. It also explains why the wealthiest people here have seen their income grow 6.9 percent since the recession started
“We’re up to nearly 400 million metric tons [of coal] shipped out of Wyoming,” says Jason Shogren, professor in economics and finance, at the University of Wyoming. “A good chunk of it comes out of Campbell County. Despite the push to move to renewables, coal is still a vital part of U.S. energy supply.”
Wyoming, he says, provides more energy to the rest of the lower 48 than anyplace in the world. Ironically, it was the 1990 amendments to the Clean Air Act that set off the boom for Wyoming’s low-sulfur coals. It is, of course, not low in carbon.
Today, fast-growing Asian economies sustain the growth. “China’s consistent demand has pretty much kept Wyoming out of the recession,” says Samuel Western, a writer who specializes in Wyoming economic history.
But Wyoming has seen booms go bust before. Gillette, the county’s largest city, gave rise to the term“Gillette Syndrome” during the 1970s, when rising oil and coal prices pushed up violent crime and domestic violence.
“Wyoming has gone from being one of the poorest states in the nation to one of the wealthiest,” says Western. “There’s a collective memory in this state of what it was like to live without. And man, that is a very powerful dynamic,” so he does not begrudge his neighbors the success. “I am grateful to see Wyoming prosper so much. Damn, Wyoming’s been poor for a long time.”
Wyoming is also overwhelmingly conservative and highly suspicious of the federal government. Sen. Mike Enzi, once mayor of Gillette, has been a good friend to the mining companies. But the natural resources that fuel the state’s boom times are often extracted from federal land, and taxes on the collectively held resources pay for the new social services. In the end, the earth’s atmosphere will pay for Wyoming’s carbon boom. Politicians in Washington have yet to reckon with the cost.
3.A planned community where people drive around in golf carts called Peachtree City is the residential centerpiece of Fayette County, Ga. A developer named Joel Cowen built Peachtree in the 1950s, and became its first mayor in 1959. At the time, it was not contiguous with Atlanta or any suburb. It was a town sprouting up on farmland off I-85, 30 miles southwest of Atlanta.
Today, median family income here is $80,466; for the richest fifth of households income has increased 4.7 percent since 2007.
So Fayette County is not exactly rich. It’s more of an upper-middle-class utopia (or dystopia, depending on your perspective) that has protected itself against the economic downturn by keeping people out. Charles Jaret, sociology professor at Georgia State University, points out that Forsyth County, north of Atlanta, has a higher portion of residents making over $125,000, and a higher median income. But Fayette is the county that saw its median household income rise the most.
“It’s an exclusive little community,” says Larry Keating, professor emeritus at the Georgia Tech School of City and Regional Planning. “It’s a cutesy little community.”
The golf carts counter the subdivided isolation characteristic of suburban developments. But Keating, who served as an expert witness in a recent case that forced the city to allow for moderate-income development for the elderly, says that Peachtree has done its part to keep undesirables away from the 88-mile network of asphalt cart roads that crisscross the town and the community’s three golf courses.
“They’ve had a moratorium on new multi-family housing for 10 years, and that’s illegal,” Keating says. “The rationale is that if you’re inundated with development, you need time to plan it. But they’ve used it as a way to keep multi-family housing out” — and thus poorer people of color who might bring down the median income.
The majority of the county’s population lives in Peachtree, which has a median household income of $93,072. Fayetteville, the county seat that is about half the size of Peachtree, has a median income of $54,230.
Peachtree is a hotbed of right-wing politics. Republican state Rep. Matt Ramsey is the author of Georgia’s controversial anti-immigrant law. In August, American Atheists sued the city demanding that it cease opening City Council meetings with a prayer to “Our Heavenly Father.”
4. The median income in Rockwall County, east of Dallas, is $78,275, and for the top 20 percent, it has grown 9 percent since 2007.
It is no surprise that Rockwall is an attractive destination for local businessmen, many of whom are very, very conservative, says newspaper publisher J.J. Smith.
“Every elected official in Rockwall County is a Republican,” Smith says. “The Democrat Party here, great people. But very few active members. We have a Rockwall Tea Party that has drawn hundreds of people to events. That goes along with the family orientedness of the community.”
The county is growing at an incredible rate. The aptly named town of Fate is the state’s fastest growing municipality, ballooning from 497 residents in 2000 to 6,357 in 2010, according to the Dallas Morning News. The region’s post-urban character is well described by its nickname, the Dallas-Fort Worth “Metroplex.” The Metroplex contains nine cities of more than 100,000 people, and has experienced most of its growth since 1980. Rockwall’s population has tripled in the time.
According to Texas A&M economics and finance professor Steve Shwiff, Rockwall has benefited from the Texas economy’s strong state banking, a housing market that didn’t bust too badly and the global trade in energy and high-tech.
“Rockwall County is geographically one of the smallest counties in Texas but has a very high median family income,” says Shwiff. “Dallas-Fort Worth, like Texas in general, has done better in this current recession than the nation at large. Since county residents are employed in Dallas-Fort Worth-based electronics, petroleum, warehousing/distribution and healthcare sectors, they have escaped, so far, the worst this recession has brought.”
Rockwall is largely well-to-do, but not uniformly so. While Heath City has a population of 6,921 and a $115,932 median household income, Mobile City is home to just 188 people and made up entirely of trailer parks. The median income there is just $21,591.
“These people are substantially richer than Texas as a whole, and they’re substantially whiter than Texas as a whole,” says Michael Phillips, a history professor at nearby Collin College. “What really drives the rise of Rockwall after World War II and particularly after the 1960s is that you had this protracted battle in Dallas over desegregation. By the time you get to 1970, they’re still just barely getting started with implementing Brown v. Board of Education.”
“The politics are a spectrum between very conservative and fringe conservative,” says Phillips. The county is represented in Congress by Ralph Hall, Tea Party Caucus member and Republican congressman. He’s the oldest member of the House, and one of its most conservative too.
5. The New York City metropolitan region has done relatively well during the recession, and Rockland County, judging by its high median household income of $82,245, has done particularly well. The richest 20 percent here have managed to increase their income by 2.0 percent since 2007.
It’s likely that “most of the people who have higher incomes here are people who are employed in New York City and Manhattan,” says Susan Meyer, senior information specialist at the Rockland Department of Planning. Of the 17,000 Rockland residents who work in Manhattan, about 22 percent work in lower Manhattan where the financial industry is based, she says.
Robert Puentes, senior fellow at the Brookings Institution’s Metropolitan Policy Program, says suburban communities like Rockland have “largely retained their position as home to some of the most highly educated and wealthy residents, highest shares of residents with white collar jobs, and the highest housing values. So they began the recession at a competitive advantage.”
Rockland County became a commuter suburb of New York City on Dec. 15, 1955, when the first car traversed the newly constructed Tappan Zee Bridge over the Hudson River. Droves of families came to take advantage of federally backed low-interest mortgages supplied by the Federal Housing Administration (FHA) to find the single-family-home American dream. FHA loans and federal highway dollars built the American suburbs, but the loans were generally denied to non-whites and to older urban neighborhoods.
Nationwide, the older first-ring suburbs built after World War II have diverged: Many have become poorer and much more racially diverse, as wealthier residents move to far-out exurbs popping up along the interstate. Some, like Rockland and Westchester, have retained much of their affluent character.
Rockland is known for being home to police officers, so its high median income might have as much to do with upper-middle-class exclusivity than with millionaire profits from Wall Street.
Al Samuels, president of Rockland Business Association, says that it’s wrong to characterize the county as wealthy. Some local boosters tout the county’s high median income to corporations thinking about relocating, he says, “and it might be a number that impresses them. But if they have a due diligence team that does its work, they’re going to find out that it doesn’t mean anything.”
Economists use something called the Gini coefficient to measure inequality (the closer to 1, the greater the inequality), and the new Census data shows the New York City region, at .50, is the nation’s second most unequal after Bridgeport, Connecticut.”
There are certainly less affluent municipalities in Rockland. Spring Valley Village, population 31,347, has a median household income of $50,101. It is also considerably more black and Latino than the rest of the county. At the same time, Rockland has 11 municipalities with median household incomes over $100,000, including New City, population 33,559, which stands at $116,871. New City is 79 percent white.