Dan Haar: Two views of the CT economy. Who’s right?

Back • Publication Date: September 14, 2021 •

Are we all living in the same state? Not even halfway through the week, we’ve seen two prominent views of the Connecticut economy and it’s as though we’re on different planets.

And both views came from Democrats — one dour (an advocacy group that wants more public spending), the other upbeat (a governor plotting his reelection strategy).

Who’s right? As usual, it’s too soon to say in the long run, but anytime my house value gains 20 percent in a year, I’m inclined to hold off on the bashing.

First up, the “State of Working Connecticut” report on Monday by Connecticut Voices for Children, an advocacy and research group.

“Connecticut’s economy has serious problems,” the report opened. Um, yeah. Go on.

The report, written by Patrick R. O’Brien, a CT Voices policy and research fellow, delivered a review of the horrible years since the so-called Great Recession of 2008-09, when Connecticut’s economy shrank, actually lost heft, after the downturn ended and before the pandemic.

“This combination of a shrunken economy with a highly inequitable distribution has weakened both the state’s fiscal standing and the standard of living for most families,” the CT Voices report said.

Yes, we know about what I called “Connecticut’s lost decade” of 2010-20. But the CT Voices report goes further, saying the pandemic job losses and recovery place this state in a deeper hole than the nation as a whole. We’re lousy in recessions but not so good at boom cycles either.

“Similar to the three prior recoveries, the recovery from the recession of 2020 will likely take Connecticut several years and likely significantly lag the pace for the U.S. as a whole,” the CT Voices report said.

OK, now we turn to Gov. Ned Lamont, who trekked to Dunkin’ Donuts Park in Hartford Tuesday morning to speak with some folks in the business community where the Yard Goats just finished a baseball season.

“Remember all that negativity?” he asked. Um, yeah, governor, just like it was yesterday.

“That’s not the way it is now,” he continued. “People are discovering the Connecticut lifestyle.”

He’s right about that. Since the start of the pandemic, we’ve seen thousands of families move here, many from New York, driving those house prices up. Of course, the whole nation is seeing this house price run-up, which makes most of us with a memory all the way back to 2008 worry it’s a bubble.

Looking at overall growth, known as gross domestic product, or GDP, we see fuel for both sides of the debate. “Our GDP is back,” Lamont claimed. Yes, compared with where we were and compared with some states.

But even in the pandemic recovery boom, at 6 percent annualized growth in the first three months of 2021, for example, Connecticut ranked No. 34 among states.

And we’re one of the worst states for unemployment, at 7.3 percent in July, the latest number available, compared with 5.4 percent for the nation that month. Lamont found a silver lining there, too.

“I’ve got relatively high unemployment compared to my peers,” he told the MetroHartford Alliance, “but I’ve got 70,000 jobs.”

By that, he means employers in Connecticut, collectively, say they have 70,000 jobs they’d like to fill. So the game is getting people back into the workforce, and Lamont laid out all sorts of strategies to do that.

I’m skeptical about those 70,000 jobs, having spent decades hearing employers say they can’t find enough people, as employers in the nation’s magnet metros manage to hire robustly.

The question isn’t short-term numbers, it’s long-term choices people and companies make. When it all shakes out, will Connecticut really live in higher favor in the minds of millennials who have tended to flee the state?

That’s what we don’t know. On the one hand, that dominant generation may be looking toward suburbia, like so many before them. On the other hand, we’re not seeing any great engines of growth, like pharma in Boston or software in Austin. Defense, insurance and wealth management, including the hedge funds, are holding their own as we fight for a bigger piece of financial technology.

Those industries aren’t famous for spreading assets to the working poor, and that concerns CT Voices. I called the group Democrats but in fairness, they’re nonpartisan — albeit far to the left.

“The key takeaway is that tax and spending policies that support working- and middle-class families, especially families of color, also provide the greatest support for the economy. It is therefore possible for the state to boost economic growth by reforming and/or increasing its budget in ways that support the most disadvantaged families. Put simply, Connecticut’s economic pie has shrunk over the last decade and the wealthy are taking an unfair, ever larger share.”

That’s the view from the left, and Lamont lives in the center, balancing that ethic with the quaint notion that Connecticut still must compete with other states on price and value.

The hopeful news is that when it comes to jobs, forget the fact that Connecticut has a 20-year record of abysmal failure. That doesn’t matter anymore. What matters is what’s happening now.

Since the low point in the spring of 2020, we’ve recovered 75 percent of lost positions and the nation has recovered 76 percent. Amd Lamont is quick to note the state’s top coronavirus rankings in 2021, low infections and high vaccination rates — crucial to economic recovery in his view.

So we’re in the game. Or, as Joseph Gianni, the central Connecticut president of Bank of America put it when I asked him about the two views, “Obviously somewhere in the middle.” Employers have plenty of money and borrowing power, he said, “They’re just waiting to see how quickly the economy is going to grow.”

Taxpayers are waiting. Struggling workers are waiting. Voters are waiting. And Lamont?

“I need you to be champions of the state,” he said Tuesday, “just like I am every day.”


Authors: Dan Haar •  Source: CT Post • View