Greater Washington Is About To Boom — Courtesy of ISIS

It’s going to happen again.

The Greater Washington area is going to have an economic and population boom as the result of a national crisis: the war with ISIS. Why should this national crisis be any different than all other crises that have preceded it?

In fact, the future of Washington, DC, as the nation’s permanent capital was still iffy until the nation’s first real crisis: the Civil War, when a real government had to be built, the city defended, the war waged, the place made habitable. The city grew by 75 percent. And a precedent was created: ever since, whenever there was a crisis, the Washington area became “Crisis Central,” and the businesses, people and infrastructure necessary to confront the challenges fueled more growth. The crisis was usually war (hot or “cold”), but not necessarily. During the Great Depression decade of the 1930s, when every other area of the nation was experiencing food lines, DC’s population grew by 36 percent.

The most recent boom happened in the wake of 9-11, when the Department of Homeland Security was created and built from Governor Tom Ridge occupying a one-person White House office as a special assistant to the President to what is now the nation’s third largest Cabinet department, employing about a quarter million people directly. In addition, there has been collateral growth including more than 100 congressional committees that one way or another provide some oversight of the DHS. And, at the same time the region benefited by a surge in the government outsourcing of critical services including the design, development and operation of high-tech IT systems necessary for the DHS to complete its mission. In the process, businesses founded to respond to those opportunities discovered other huge markets for the technology they developed. No wonder the Northern Virginia Technology Council became the nation’s largest regional technology association, representing about 300,000 employees in the region. And Greater Washington year after year showed up at or near the very top of the world’s strongest and wealthiest economies.

But with sequestration and governmental gridlock, office vacancy rates have recently fallen to the highest levels in decades, growth slowed and basically flat-lined, and generally the region’s fortunes began to point in the wrong direction – so much so that people began to talk of regional efforts to recruit new businesses to the region that may not be so related to the government. Ha! Not only would that prove to be impossible due to the region’s built-in and entrenched anti-collaborative culture between jurisdictions, but such an effort is not needed because the war with ISIS is going to stimulate dramatic growth in the region for at least three reasons.

  1. The War Itself Will Fuel Massive Growth. As much as we may not like to use the word, we have to acknowledge, as the President of France and the Pope have, that what happened in Paris on November 13 were truly acts of “War.” Within a couple of days, France reacted with powerful air attacks on ISIS targets in Syria. Do we believe that there will not be further retaliation on the part of ISIS? Do we believe that ISIS will limit their attacks to France and not engage much of the rest of the world? Extrapolate out the current trajectory of events, and it is difficult to see anything other than the growth of a new type of war: global, constant, different than any other war in history with enemies living next door and in cyberspace, and thereby requiring new technology, new solutions, new reactions, new expenses. In other words: the war machine is going to grow and the epicenter of that growth will be in the Greater Washington region.
  2. There will be a massive infrastructure improvement program undertaken by and managed from DC. This country has kicked the can down the road for decades when it comes to maintaining its infrastructure – to say nothing about building new infrastructure to bring the nation into the 21st Century, as much of the rest of the developed world has already done. Politicians love to campaign on promises to support infrastructure modernization programs. That must be the reason why they have failed to address the reality of what’s needed for so many years: so that they can continue to campaign with the same promises. But our infrastructure will be looked at differently as the war of terrorism transitions away from episodic events of belligerence to coordinated battles of a planned and strategic war. Our national electric grid can be toppled with less than 20 strategically executed attacks by small groups of Jihadists. How much effort will it take to topple critical bridges that are on the verge of toppling anyhow because of neglect? There are 30,000 miles of levees in the nation, defending major regions from flooding; 20,000 miles of those levees are in sub-standard condition today. How difficult will it be for terrorists to take them out? Our ports are terribly exposed to destruction. A weeklong strike by drivers at the Ports of Los Angeles, Long Beach, San Diego and others on the West Coast in late April 2015 gave us a small hint of what happens when containers languish on docks, or, worse, when ships don’t make it to the dock in the first place. The labor standoff has been estimated to cost the US economy $2 billion per day during the 10 days of complete shutdown on 29 West Coast ports. Residual effects of port strike delays cost retailers $7 billion over the course of 2015. Are our politicians going to be so negligent as to keep our ports at risk of terrorist attacks? What happens if there is a serious attack in the Washington region and the area has to be evacuated, parents and children need to meet up at homes, and the region has to be kept functioning to manage the war effort? The region’s neglected transportation system just cannot respond to that need. It may require one or more terrorist attacks against our infrastructure until politicians respond in a realistic way – but eventually they will have to respond. And although they like to pretend that “only” $250 billion is required to update our infrastructure, the cost is more like $1 trillion. That massive spending program is going to be created, bid for, and managed from Washington.
  3. Growth of the Advocacy Services Industry. With such an extensive effort, with so much money being spent, so many opportunities to promote the solutions of one industry versus another, one company versus another, and one project versus others, there is going to be a surge in business for those who advocate for all the enterprises seeking their piece(s) of the pie. Many think of those advocates as lobbyists. That dramatically under-estimates the size of the industry centered in DC that I have called the “Advocacy Services” industry. In addition, it includes public relations, public affairs, grassroots and ad agencies among other communications firms with major DC operations. It includes trade associations, think tanks, specialized news services, lawyers taking their clients’ cases to court, etc. Steve Fuller of the George Mason University Center for Regional Analysis has begun to estimate the size of this previously non-institutionalized industry, whose global center of gravity is at about 18th and K Streets, NW, in DC. He has estimated that the Advocacy Services industry includes about 116,000 jobs in the region, growing by as much as 20 percent to just shy of 140,000 jobs by 2025 – and that estimate was made before factoring-in what’s going to happen to that industry as the region responds to the new war.

If you stand on the banks of the Potomac and listen carefully to the rumble that is starting to build, you can hear it beginning – but just beginning: Boom!

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