Economist: Meltdown unique

Staff writer, CT Post

STRATFORD — Take com­fort: the economic mess we’re facing is unique to our times, and unlikely to be a repeat of the Great Depression.
That’s one conclusion to take away from an economic review presented to a group of retired General Electric ex­ecutives Wednesday by Nick Perna, chief economist and managing director of Perna Associates. Perna is himself a GE alum; he worked for the Fairfield-based conglomerate after serving in the Nixon ad­ministration and working for the Federal Reserve.

“ We live in interesting times,” Perna said, drawing laughs from the more than 30 members of the GE Senior Elfun society at Oronoque Country Club. The society is a volunteer organization that tries to improve their com­munities.

Just moments before Perna began his talk one table had been deep in discus­sion about a proposed bailout of the auto industry and hits to stock portfolios.

The Federal government is directly investing in major banks, has loaned tremen­dous sums to insurer AIG and is now debating the idea of propping up the nation’s three largest automakers, all while unemployment is rising, Wall Street continues to swing by triple- digit amounts, housing prices fall and deflation has become a real concern.

“All I can do is put a floor under the anxiety and uncer­tainty,” Perna said, dismiss­ing continuous comparisons to the Great Depression. “ This is not a repeat of the 1930s.”

There are plenty of differ­ences between the economic crisis of the 1930s and today, he said. For example, the na­tion’s unemployment insur­ance gives people who lose their jobs some money to spend, which helps stabilize the economy.

That is the smallest estimate among the three states, Steffens said. The $ 48 million request was based on a formula that calculated the amount needed per person.

The grant would pay for a coor­dinated response from the states that includes worker retraining, job search assistance, skills assessment and resume help, Steffens said. Con­necticut estimates about 10 percent of the projected, affected, workers will need retraining, she said, which will cost an average of $5,000 each.

“ We received a national emergency grant request from the tri­state area on November 4 and it is currently under review by the De­partment of Labor’s Office of Na­tional Response. However, we have yet to receive the letter the Gover­nor mentioned ...,” a U. S. Depart­ment of Labor spokesperson wrote Wednesday in an e-mailed response to a request for comment.

For many workers, though, the question is in what fields they will find new jobs.

“ We’re seeing a net decline in overall numbers of employment,” but positions are available, said John Tirinzonie, the labor depart­ment’s economist. Those positions, however, tend to be more special­ized, which could be a problem, es­pecially without retraining. The state’s September jobless rate was 6.1 percent; the labor de­partment is releasing October’s fig­ures today.“

We’re not going to expect any growth at all. We’re looking at job losses,” which will be the pattern for the next six to nine months, Tir­inzonie said.

Connecticut will be able to ab­sorb some of these workers to fill va­cant positions, but others will have to leave the state to find work. This is what happened in the 1990s, when the banking industry declined, said Joseph McGee, vice president of public policy for the Business Council of Fairfield County. Retraining, McGee said Wednesday, is a neces­sary step to make sure Connecticut keeps much of its labor force.

“The economy will come back,” he said, like it did after the 1990s downturn.

Until then, there will be pockets of growth, according to projections from Housatonic Community College.

Robert H. Thornton, the school’s director of outreach services, said his data — based on information from 41 databases, including several belonging to the U.S. government — suggests more jobs are coming in bookkeeping/accounting/audit­ing, customer service, allied health — such as home health aides, med­ical assistants and orderlies — and even some real estate areas. His projections cover 2007 to 2017.
“ You’re going to have to scamper to create curriculum in many ways,” Thornton said of the retraining ef­forts to come. The community colleg­es that will do a lot of the retraining will need to be proactive and listen to what employers say they need, he said. “It’s very much in flux ... I don’t think really any of us have a handle on how large this could be yet.”

Steffens said Wednesday the governors, who regularly speak with each other, asked for the grant together because they recognized there were similarities in the af­fects the job losses would have on their states.

That cooperative effort pleases McGee.

“ It implies we can cooperate among other issues, as well,” he said. “ This is a very proper ap­proach for the three governors,” but there is no one, simple solution.