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Saving Jobs With The Kitchen Sink

By Dan Haar

October 28, 2011

What a week for jobs in Connecticut. On Tuesday, we spent $20 million to grab the world headquarters of NBC Sports Group to Stamford, a bargain by any measure, with a gleaming studio and at least 500 new positions, perhaps many more.

On Wednesday night the state legislature committed a walloping $626 million for basically the kitchen sink of jobs programs. If it might work, it's in there: farm restoration, outright corporate greenmail, loans for dry cleaners, cash for manufacturers to train workers, a massive boost for tech investment, bribes for companies to hire unemployed people, airport development zones, expanded film tax credits and much, much more.

Then on Thursday morning we woke up to a stark figure from Mother Aetna, cornerstone of the Hartford insurance industry: 400-plus Nutmeggers taking a sweet early retirement deal. Those jobs won't be filled, so as far as the economy is concerned, it works just like a mass layoff.

Add it all up and we have a painful, unavoidable set of facts. We're treading water. We don't know exactly what to do about it, but we're forced to spend a fortune concocting ways to save jobs, just to keep from drowning.

Welcome to Survivor: Southern New England, as Connecticut vies against other high-cost, low-growth states as they figure out how to keep their companies from fleeing — or, better yet, how to steal firms from their sleeping neighbors.

. On top of the omnibus jobs bill, which has 86 sections, Gov. Dannel P. Malloy and his fellow Democrats, with almost no GOP support, committed another $291 million for a genomics lab in Farmington that will create somewhere between 300 and 6,000 jobs.

With 160,000 Connecticut residents out of work and actively looking, and another 100,000 or so stuck in part-time jobs involuntarily, we really have no choice but to play this game. But is there any way to win? This week has offered both hope and despair.

Here's the hope part: The jobs bill is easily the most ambitious and probably the most expensive economic legislation to come out of Hartford since the previous Great Recession two decades ago. It's billed by leaders of both parties, starting with Malloy, as the centerpiece of a new, business-friendly approach, and the agreement alone is worth something.

It's expensive, but we've got the bucks so we might as well spend them. Even people who criticize big government spending are lining up behind this latest jobs bill.

"It just wasn't some laundry list of ideas," said Larry Cafero, R-Norwalk, the Republican House leader. "I think the bill is very focused."

Focused? I'd love to see what got left out if this is focused. Cafero claims credit for making sure that small business got its share, $180 million in various programs throughout the bill. But regardless of focus and credit-claiming, the real victory here is that it's not just a set of programs, it's the legislature's way of saying we really mean it this time, we're business-friendly.

Which brings us to the despair part: That "business-friendly" claim has been made by every governor since William Pitkin in 1766, and, for that matter, just about everything in this jobs bill has been tried before, with mixed success.

Some programs have failed outright, like the tax credit for small companies to hire, which has now been expanded. Under Gov. M. Jodi Rell, the state set aside up to $20 million for the credit, but it was barely claimed. Now it's been expanded, up to $900 a month for hiring unemployed veterans, from $200 a month.

"We intend to promote it, we intend to expand it. I want people to use it," Malloy told my colleague, Mara Lee. Speaking of the prior administration, he said, "They didn't exactly advertise it. I suspect they were more than happy only a million got spent."

We'll see. One of the core problems in this whole business of giving money to small business is that we aren't focusing tightly enough on important industries that are already here — insurance, aerospace, wealth management, biotech — though we're doing some of that.

An even bigger problem: We can't create demand for their goods and services. And that, more than money, more than trained workers, more than slashing red tape, is what they need.

Yet another problem is that the effectiveness of state grant and loan programs, which are now enlarged, is very difficult to measure. On Tuesday, Connectcut Working Families and Good Jobs First, a Washington, D.C., group, issued a report called "Connecticut Economic Development Subsidies: Costly And Blunt." In it, the liberal groups cited 28 corporate assistance deals, which they said cost $86 million, but came up short by a total of 1,192 jobs.

The report is partly wrong, charging, for example, that the state handed liquor-maker Diageo $40 million in tax credits in exchange for moving from Stamford to Norwalk, rather than to New York. In fact, Diageo, having failed to add the promised 300 jobs, is ineligible for much of the payoff, said Jim Watson, a spokesman for the state Department of Economic and Community Development.

"We stand by the overall performance of the portfolio," Watson said.

There's the nut of hope and despair. Overall, we think we're doing the right things. But even that's debatable, and we're losing ground on many fronts.

At least we're not spending $569 million for a 12-mile busway. We wouldn't do that, would we?