PhillyDeals: Washington: It's where the money is

I know the winner of November's presidential election: Washington, where people are flocking and incomes are rising faster than just about anywhere else, no matter who's in power.

The capital and its bedroom suburbs added people faster than metro New York, Chicago or Los Angeles under Democrat Bill Clinton in the 1990s - and also under Republican George Bush since 2000. (Philadelphia trailed.)

Used to be that while Washington took itself very seriously, everyone knew New York was home to the people who really ran this country and had money to prove it.

But last week, Census officials said Maryland topped Connecticut and New Jersey as the richest state for the second straight year - a historic reversal.

That's right: Washington's suburbs are now wealthier than New York's, by median household income.

The nation has envied or resented Wall Street for so long that it may be hard to feel sorry for hedge fund managers and bond traders who have had to cut back.

But consider who's passing them by: lobbyists, government contractors, and other inside-the-Beltway barons, their collaborators and dependents. Who also make great popular villains.

Of course, businesspeople who know Washington say there's more to its growth than pandering to power.

Hugh Long, who heads Wachovia Corp.'s northeast region from his office on South Broad Street, has pointed to Washington as a place Philadelphia business, public and nonprofit leaders should copy, by working together across boundaries to boost education, planning and public services.

But it's a pretty safe bet that as long as the government collects most taxes from businesses, their owners and workers, and spends far more than an even share of that loot in Washington, Maryland, and neighboring parts of the Virginias, ambitious young people will keep flocking to the nation's capital and the glass towers that ring its highway exits before trying their luck in other Northeastern cities. No matter who wins.

People who think the Republican Party is a creature of the business community are sometimes shocked to learn the folks who run New York's biggest banks donate mostly to Democrats.

"That started when the Travelers people bought us in 1998," a long-serving Citibanker told me last year.

Chief executive officer Sandy Weill installed a lot of New Yorkers who, like him, had grown up in New Deal Democratic households - Jewish, Greek, Irish, Italian Americans from the outer boroughs.

Weill worked closely with the Clinton White House on policies of mutual interest. Weill's estranged top deputy, Jamie Dimon, went on to run rival JPMorgan Chase & Co. and installed other Democrats in the executive suites.

Business meets government and Wall Street meets Washington in the person of Robert Rubin, Clinton's old Treasury secretary, a student of probability, a standout Goldman Sachs Group Inc. bond trader, and a highly effective negotiator with foreign ministers of finance.

After leaving Treasury, Rubin went to work for Weill in the ultimate plum job: As chairman of Citi's executive committee, he stayed close to the levers of power, kept up his contacts around the world, collected millions in yearly pay, and avoided personal responsibility for the company's checkered performance.

In the last couple of years, Rubin has been a high-level, off-the-record apologist to worried shareholders, directors and reporters for embattled Citigroup Inc. chief executive Charles Prince, top Citi investment banker Michael Klein, and other allies. Prince was forced out last year; Klein left last month. Rubin stayed on.

Last week, Citi's new management eliminated the executive committee, but kept Rubin on as an adviser.

The bank won't say what he earned last year (though it noted he paid the bank $579,000 to fly its jets). The year before, he collected $17 million, not counting the $66 million he had stashed in an investment account, which he was to collect immediately as soon as he left the bank or board, even if he were fired for cause.

If Rubin's stepping back at Citi, he's getting closer to Barack Obama, who doesn't seem to hold it against the elder statesman that he backed Hillary Rodham Clinton in the primaries.

One of Rubin's old White House aides, Jason Furman, declared for Obama early and has been a spokesman for the Democrats' economic program.

Another, Timothy Geithner, runs the New York Federal Reserve, which regulates Citi and its rivals. He has been touted in the Wall Street Journal as a future Treasury secretary if Obama brings his Democratic Wall Street allies to the White House.