The Washington, D.C., region has long been considered recession-proof, thanks to the remorseless expansion of the federal government in good times and bad. Yet it’s only now—as D.C. positively booms while most of the country remains in economic doldrums—that the scale of Washington’s prosperity is becoming clear. Over the past decade, the D.C. area has made stunning economic and demographic progress. Meanwhile, America’s current and former Second Cities, population-wise—Los Angeles and Chicago—are battered and fading in significance. Though Washington still isn’t their match in terms of population, it’s gaining on them in terms of economic power and national importance.
The federal government’s relentless expansion has made Washington, D.C., America’s real Second City. ... it’s the town of the most important government there is, and that distinction matters. Washington is home to a massive number of embassies and international institutions, of course.
But what solidifies Washington’s emerging status as America’s new Second City isn’t its economic performance or its emerging global-city profile. Both of those are secondary effects of the real change in Washington: the increasingly intrusive control of the federal government over American life. An array of programs—the Sarbanes-Oxley and Dodd-Frank acts governing finance; the government’s auto-industry takeover; the EPA’s declaration that carbon dioxide is a pollutant—takes regulation to new levels of detail and intrusiveness, even extending to the micromanagement of particular companies. The trend began long before President Obama took office, but its quintessence is Obamacare, an annexation by the federal government of one-sixth of the American economy via 2,000 pages of byzantine legislation, not counting the thousands of pages of implementing regulations still to come.
All this intrusion emanates from the legislative and especially the regulatory machinery in Washington.
http://www.city-journal.org/2013/23_1_washington-dc.html