Bubble on the Potomac

The new affluence flooding the nation's capital sets it a world apart from the country it governs

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Andrew Cutraro / Redux for TIME

Sweet Ride. Uber D.C.'s Rachel Holt in one of her company's digitally dispatched luxury sedans. Some riders use them to get groceries.

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Why the boom? The size of the nonmilitary, nonpostal federal workforce has stayed relatively stable since the 1960s. What has changed is not the government payroll but the number of government contractors. It's estimated that, thanks to massive outsourcing over the past 20 years by the Clinton and Bush administrations, there are two government contractors for every worker directly employed by the government. Federal contracting is the region's great growth industry. A government contractor can even hire contractors for help in getting more government contracts. You could call those guys government-contract contractors.

Which means government hasn't shrunk; it's just changed clothes (and pretty nice clothes they are). The contractors are famous for secrecy; many have job titles that are designed to bewilder. What is it, after all, that an analyst, a facilitator, a consultant, an adviser, a strategist actually does to earn his or her paycheck? Champions of the capital's Shangri-la economy like to brag of Washington's knowledge workers.

Peter Corbett isn't so sure about the wisdom of D.C.'s version of the knowledge economy. Corbett heads a social-media marketing company, with corporate clients that have famous names. Most of his work involves nonprofit foundations that have flocked to Washington to be close to the fount of grants and tax breaks. He did a single project for the federal government and then swore it off for good. He describes his first meeting at the Pentagon. "There are 12 people sitting around the table," he says. "I didn't know eight of them. I said, 'Who are you?' They say, 'I'm with Booz Allen.' 'I'm with Lockheed.' 'I'm with CACI.' 'But why are you here?' 'We're consultants on your project.' I said, 'You are?' They were charging the government $300 an hour, and I had no idea what they were doing, and neither did they. They were just there. So I just ignored them and did my project with my own people."

Aside from its wealth, the single defining feature of ber-Washington is its youth. Most of the people who have moved to Washington since 2006 have been under 35; the region has the highest percentage of 25-to-34-year-olds in the U.S. "We're a mecca for young people," Fuller says. One recent arrival says word has gotten out to new graduates that Washington is where the work is. "It's a place where a liberal-arts major can still get a job," she says, "because you don't need a particular skill."

The Conveyor Belt

The young fill entire neighborhoods with an undergraduate air. On a warm night in Clarendon in northern Virginia or in the H Street NE corridor, with the crowded sidewalks and lines outside the door-to-door bars, you might think you've landed on fraternity row in Chapel Hill, N.C., or Charlottesville, Va. They've brought the college lifestyle with them--group houses, hookups, late-night cram sessions and lots of drinking. The local drugstores seem to devote more shelf space to condoms and pregnancy tests than diapers and formula. (Another big seller at pharmacies: Pedialyte, used as the ultimate hangover cure.)

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