This has not been the best week for economic news. The housing market lapsed back into a double-dip. The May jobs report showed the slowest private sector employment growth this year, with the average length of unemployment hitting its highest level on record.

But on all these indicators and more, Greater Washington DC flies in the face of the national trend. I’m not exaggerating:

• Metro DC clocked the highest level of housing appreciation on the Case-Shiller Home Price Index, 4 plus percent, while every other metro is tanking.
• Greater Washington posted the second lowest rate of unemployment according to the latest BLS figures, 5.4 percent, as many metros remain above 10 percent.
• And DC households boast the nation’s second highest real household income, $61,449, when cost of living is taken into account, considerably more than Greater New York’s $34,931, which is the nation’s second lowest. Only McAllen-Edinburg-Mission, Texas fares worse.

Then there’s the icing on the cake. Just to add insult to injury, DC takes first place again – on the North American Vexillological Association’s survey of the best city flag. Like the rapper K’naan says, “So wave your flag, now wave your flag, now wave your flag!”

Take that other cities!

After the inauguration here, my wife joked/hoped that Oprah would be buying a home in D.C. In that vein, Joel Kotkin offered a really interesting piece in the WAPO highlighting the D.C. Metro’s ‘coronation’ as the undisputed power broker among U.S. metros.

Kotkin directly states his thesis: “For more than two centuries, it has been a wannabe among the great world capitals. But now, Washington is finally ready for its close-up.”

While D.C. has been growing in stature (in terms of population, wealth, tech, and lifestyle) for the last 20 years or so, our current economic crisis and the submission of other great power centers has put the District at the ‘height of its power.’ From Kotkin,

No longer a jumped-up Canberra or, worse, Sacramento, it seems about to emerge as Pyongyang on the Potomac, the undisputed center of national power and influence. As a new president takes over the White House, the United States’ capacity for centralization has arguably never been greater. But it’s neither Barack Obama’s charm nor his intentions that are driving the centrifugal process that’s concentrating authority in the capital city. It’s the unprecedented collapse of rival centers of power.

This is most obvious in economic affairs, an area in which the nation’s great regions have previously enjoyed significant autonomy. But already the dukes of Wall Street and Detroit have submitted their papers to Washington for vassalage. Soon many other industries, from high-tech to agriculture and energy, will become subject to a Kremlin full of special czars. Even the most haughty boyar may have to genuflect to official orthodoxy on everything from social equity to sanctioned science.

At the same time, the notion of decentralized political power — the linchpin of federalism — is unraveling. Today, once proudly independent — even defiant — states, counties and cities sit on the verge of insolvency. New York and California, two megastates, face record deficits. From California to the Carolinas, local potentates with no power to print their own money will be forced to kiss Washington’s ring.

Kotkin goes on to explain that D.C. is ready for this moment with a huge talent base and a great amenity-driven metro. He also argues that those of us who live here will benefit from this concentration of power in D.C. via greater opportunities and rising real estate values. Although I may benefit from this personally, I have great concerns about what this will mean for innovation, growth, and entrepreneurship (sustainable growth) in the U.S. Any thoughts?