Did the Inauguration Boost the D.C. Economy?

Sure, the economists will grant you, the tourists wouldn't be here spending any money at all if it weren't for the inauguration. But even isolating for locals, I'm not so sure the local economy didn't benefit. Remember, the fear was that the District would go into total shutdown mode—and for that reason, many residents avoided their offices or were told to take the day off. The touristy mega-event gave some residents a four-day weekend and presented even longer holidays for others.

Local businesses certainly benefited from the increased traffic. Tryst recorded amazing business during inaugural week, according to Jocelyne Finnegan, the capo at the popular Adams Morgan coffeeshop and bar. "We had the best business that we've had in one day in 10 years," says Finnegan. "The whole Friday to Wednesday was some of the best business we've ever had."

Other cafes and restaurants saw frenzied activity during hours when customers would normally be at work, according to anecdotal reports. Clerks at Bed Bath & Beyond and Target said that they felt an inaugural crush. All sorts of clubs and bars hosted balls and special inaugural events, of course, but art galleries too had Obama-themed art on exhibit. Perhaps readers can attest to the scene at theaters and cinemas (anyone catch a matinee?). We all saw the line that stood outside Ben's Chili Bowl for four straight days.

The second factor after the substitution effect cited by Holy Cross is the crowding-out effect—the notion that the city would be too slammed with checkpoints and walls o' Portoilets for any economic activity to take place. For certain, the five or so hours I spent trapped in Little Harare (normally, 7th and D Streets NW) left me with little to do except buy worthless hand-warmers and a delicious cup of hot cocoa outside Oyamel.

Yet the economists cite one crowd-outtage factor that DCist, City Desk, the Washington Post, and others have all called into question: the homes and apartments supposedly rented out to tourists. "[W]hile the city gains from any spending done by the visitors, any local spending by the home owners that would have taken place absent the inauguration should be subtracted from the estimates of net economic impact," the report observes. It rather felt like residents made all the more room in their homes for friends and guests. And that meant more celebratory happy hours and dinners for residents-turned-hosts.

Finally, Holy Cross cites leakages: the idea that money made in the city doesn't stay in the city. So the boost that (say) Sheraton Hotels and Resorts saw during the inauguration now languishes in the corporate coffers in White Plains, New York—not stimulating the spending of the janitors, bellhops, managers, and staff who survived the uptick in traffic. Every time a tourist grabs a sandwich at Cosi, an angel in Deerfield, Illinois, gets his wings, but it doesn't do much for the local economy.

It's a little hard to say what the millions of tourists hoped to accomplish while they were in town. But more than a few of them were encouraged by hundreds of press articles and features to experience a little bit of the real D.C. while they were here. It wasn't dozens, but rather hundreds, and maybe thousands, who crowded U Street for the entirety, in no small part motivated by the example set by President Obama. Elsewhere in Northwest, it wasn't hard to find tourists. They were obnoxiously present everywhere.

Whether the city made money off 'em is impossible to say at present. But the city certainly boasts a more vibrant commercial sector than it did eight or 16 years ago for the two prior presidential inaugurations, and that might have made all the difference. Certainly, the city was in a better mood.

"I don't even remember the last inauguration," says Finnegan. "There were more people protesting than cheering for him. I don't remember any bump from Bush."