Acela - CC image from wiki

Last month, the New York Times Magazine featured a story on the “Empire of the in-between,” the places along the tracks traveled by Amtrak’s Acela Express.  Decaying post-industrial landscapes, battered and half-abandoned residential neighborhoods, and so on. The train serves as a metaphor for the changing nature of the American economy:

But for most of the 180 or so years of the train line’s existence, the endpoints of this journey — New York and D.C. — were subordinate to the roaring engines of productivity in between. The real value in America was created in Newark’s machine shops and tanneries, Trenton’s rubber and metal plants, Chester’s shipyard, Baltimore’s steel mills. That’s where raw material was turned into valued products by hard-working people who made decent wages even if they didn’t have a lot of education. Generation after generation, and wave after wave of immigrants, found opportunity along the corridor. Washington collected the taxes and made the rules. Wall Street got a small commission for turning the nation’s savings into industrial investment. But nobody would have ever confused either as America’s driving force.

This model was flipped inside out as Wall Street and D.C. became central drivers, not secondary supports, of the nation’s economy.

While the general trajectory is correct, the idea that the emergence of Washington and New York as dominant centers isn’t quite correct.  As the Economist points out, the real story is less about a nefarious capture of sectors of our economy, but the shifting nature of how our economies are structured:

Yet to pin the broad changes in the geography of the northeastern corridor (and similar shifts across the nation and rich world as a whole) on an explosion in rent-seeking is a mistake. The real story is more interesting: the economic role of the city itself has changed.

The Economist continues:

The difficulty this creates for the northeastern corridor is that this kind of clustering creates a demand for a different set of workers (and often a different infrastructure) than was necessary a century ago. Adjustment to this shift in labour demand has been taxing for major cities, but more importantly it has placed a great deal of stress on middle-income workers, whose talents are no longer needed. Cities continue to serve as engines of wealth-creation, but they are less effective as engines of broad economic mobility than they once were.

The article uses New York’s ports as an example.  The state of the art for transportation has shifted away from breakbulk cargo and towards containers.  New York remains one of the top ports in the United States, but the location of the bulk of the port activity shifted with the changing technology away from Manhattan’s waterfront and instead to container terminals.  The same pattern could be said for the industrial assets along the Northeast Corridor tracks, where freight trains are now rare and high(ish) speed passenger rail is the prime cargo.

Still, even if not the best analysis of the economic geography of the corridor, the Times Magazine piece serves as a metaphor for the shifting nature of our economy.  At the same time, however, you don’t want to overdo it, and conclude too much.  Aaron Renn does just that when asking “is the Acela killing America?” by directly linking the finance industry’s influence over DC’s regulatory apparatus to the rise of the Acela.

Never mind the logical challenges of such a claim (the old Metroliners ran faster between DC and New York on the same tracks; the two cities have been linked by frequent air service for years as well), other industries have been able to curry favor with DC.  Oil is one example; perhaps focusing on decisions like Exxon-Mobil’s location of substantial workforce presence in suburban DC (workers soon to be consolidated in Texas – such is the power of industrial agglomeration).  However, I don’t see anyone claiming Big Oil’s favorable treatment from the federal government is solely attributable to flights between Houston and Dulles.