America’s post-industrial Midwest is far from being the country’s poorest region. To find the direst economic conditions in the United States, one generally has to look toward Appalachia, the Mississippi Delta region, the Rio Grande Valley, and a smattering of heavily Native American counties in the Southwest and Great Plains. What the Midwest’s recent economic struggles bring, however, is not just large-scale political salience but a particular kind of fixability.
The poorest places in the United States have been poor for a very long time and lack the basic infrastructure of prosperity. But that’s not true in the Midwest, where cities were thriving two generations ago and where an enormous amount of infrastructure is in place. Midwestern states have acclaimed public university systems, airports that are large enough to serve as major hubs, and cities whose cultural legacies include major league pro sports teams, acclaimed museums, symphonies, theaters, and other amenities of big-city living.
But industrial decline has left these cities overbuilt, with shrunken populations that struggle to support the legacy infrastructure, and the infrastructure’s decline tends to only beget further regional decline.
At the same time, America’s major coastal cities are overcrowded. They suffer from endemic housing scarcity, massive traffic congestion, and a profound small-c political conservatism that prevents them from making the kind of regulatory changes that would allow them to build the new housing and infrastructure they need. Excess population that can’t be absorbed by the coasts tends to bounce to the growth-friendly cities of the Sunbelt that need to build anew what Milwaukee, Detroit, and Cleveland already have in terms of infrastructure and amenities.
A sensible approach would be for the federal government to take the lead in rebalancing America’s allocation of population and resources by taking a good hard look at whether so much federal activity needs to be concentrated in Washington, DC, and its suburbs. Moving agencies out of the DC area to the Midwest would obviously cause some short-term disruptions. But in the long run, relocated agencies’ employees would enjoy cheaper houses, shorter commutes, and a higher standard of living, while Midwestern communities would see their population and tax base stabilized and gain new opportunities for complementary industries to grow.
A lot of the government doesn’t need to be in DC
There is a compelling basic logic to the idea of a capital city that concentrates government functions in one place so agency leaders can consult with Congress and staff can coordinate across agencies. The Treasury Department is located next to the White House, and there’s literally a secure tunnel between the buildings so the president and his team can take advantage of Treasury’s considerable institutional knowledge and expertise when crafting economic policy. Foreign diplomats are sent here to Washington, so America’s domestically based workforce of foreign service officers also needs to be based here.
But a lot of important things the government does are not political in this way.
The National Institutes of Health, for example, employs a staff of some 20,000 people — a disproportionately well-educated group of technical experts — out in the suburbs in Bethesda, Maryland. They play a crucial scientific and public interest role, but they’re not involved in day-to-day politics. The NIH’s work could easily be done from Cleveland, where 20,000 highly educated, taxpaying workers would be welcomed. Their presence would create secondary jobs in industries like restaurants, education, and home remodeling. And an infusion of skilled workers alongside the metro area’s existing health and educational resources would help build up the larger regional biomedical research sector.
In general, looking at which agencies are already not going through the trouble of locating themselves in downtown Washington is a decent signpost of which agencies’ core mission is not profoundly helped by proximity to the centers of political power.
- Nearly 3,000 people work at the National Institute of Standards and Technology in Gaithersburg, Maryland.
- The Social Security Administration’s central office is in Woodlawn, Maryland, outside of Baltimore.
- The 4,000 employees of the Center for Medicare and Medicaid Services are also in Woodlawn.
- The US Patent and Trademark Office already has a satellite office in Detroit but maintains its main headquarters in Alexandria, Virginia.
- The US Geological Survey has several thousand people working in Reston, Virginia.
- The National Weather Service has 5,000 employees and a headquarters in Silver Spring, Maryland.
These and other agencies moved out of DC years ago in search of more affordable real estate — a recognition that their mission does not require routine physical proximity to elected officials. Keeping this kind of agency near DC was, obviously, more convenient for existing staff who were spared the need to drastically relocate or find a new job elsewhere. But given the growing strains of regional inequality in the United States, it would make sense for Congress to insist on taking a broader view of the national interest. Many of these agencies have technical or scientific missions whose highly skilled workforce would be a tremendous asset to cities with proud legacies that are currently suffering from brain drain and population loss.
Some DC power centers are supposed to be independent
Another bloc of agencies that we should consider relocating are the ones where close coordination with elected officials is explicitly contrary to their mandate.
The alphabet soup of independent, commission-style regulatory agencies — SEC, CFTC, FTC, FEC, FCC, FAA — fits the bill here. But so do major DC players like the Federal Reserve Board of Governors and the FBI (which is moving out to the suburbs anyway). These agencies’ heads do interact with Congress more frequently than the technical agencies, so decentralization might be more trouble than it’s worth. But at the same time, these are arms of the executive branch that are by law supposed to be operating independently of the White House. Symbolically manifesting that independence by having the work done out of Detroit rather than DC could have some value.
Each of these regulatory agencies is surrounded by a swarm of highly paid lawyers, economists, and lobbyists who make careers out of influencing their decisions. Right now, those folks all live in the DC metro area, where they drive up the cost of already expensive housing. Their spending would do a lot more good in Detroit, Milwaukee, or Cincinnati, where they would create secondary jobs and bolster a larger regional economy.
Greater Washington will get over it
Of course, pulling tens of thousands of federal jobs out of the DC area will, in the short term, impose some pain on the local economy here. But a crucial element of the case for decentralization is that this is not a purely zero-sum transfer. The DC region of 2016 has grown big enough, rich enough, skilled enough, and expensive enough that the marginal dollar of federal spending does little real good.
Five years ago, Congress passed the sequestration deal, which imposed large spending cuts and then exempting major entitlement programs from those cuts, leading to severe cuts to the kind of federal programs whose dollars tend to stay local. At the time, DC officials worried that this would hammer the regional economy.
But we bounced back quickly. The DC region’s current big economic difficulties don’t stem from a lack of high-end jobs for highly skilled workers. We struggle instead with affordable housing, a creaking Metro system, overburdened roadways, and a consequent lack of upward mobility for the region’s less skilled workers.
If even a fairly large number of well-paid federal jobs vanished, it would just slightly stall the overall upward march of regional housing costs. If politicians from Maryland and Virginia could convince congress to throw in some money for much-needed upgrades to our mass transit system as compensation for lost jobs, it would be a win-win.
In the long term, we should think bigger
Obviously, the federal government has a unique ability to alter the concentration of economic activity in the DC area. But the general problem of good-paying jobs being overly concentrated in expensive coastal metropolitan areas that don’t particularly want to build oodles of new housing — even while existing residential infrastructure goes to waste in Midwestern areas suffering population loss — isn’t limited to DC.
My work over the years has largely focused on the idea of trying to persuade Silicon Valley, Greater Boston, and New York City and its suburbs to agree to build more. That remains a good idea under any scenario. But it’s also absurd for a great nation to leave its long-term economic trajectory so fully hostage to the whims of the Palo Alto planning commission and a motley assortment of New York community boards and snob zoning groups on Long Island.
Congress is not going to pass a law telling Google it needs to move to Toledo.
But if Donald Trump is going to invest time and energy in jawboning a single medium-size company to keep a single small production facility open in Indianapolis, he should take a little time to think bigger. I’m not sure what it would take to convince a technology giant or three to decamp from Silicon Valley — where the local political system doesn’t seem to want them — to more welcoming pastures near the Great Lakes. But it would at least be worth trying to find out.
