Connecticut's Recession Could Spell Loss for Bush

President in New England seeking to hold home base

SOARING over downtown Hartford, the 527-foot Travelers Insurance tower has stood for more than 70 years as a symbol of stability and strength. But like Connecticut's recession-wracked economy, the tower seemed to sway in recent days.

The Travelers Corporation, weakened by bad real estate deals and over $500 million in claims from Hurricane Andrew, is slashing its work force by 3,500 positions, including 500 to 600 in Connecticut.

A discouraged official at the State Capitol laments: "Every time we save 200 jobs in one company, someone else announces they're cutting twice that number."

The bleak economic skies hanging over New England are darkening President Bush's election prospects here and across the region. A brief campaign foray into Boston today by Bush will help, but much more work is needed.

The Nutmeg State, where Mr. Bush grew up and attended college, is supposed to be rock-solid Bush country. But polls tell a different story: His Democratic rival, Gov. Bill Clinton of Arkansas, is threatening even in the president's back yard. J. Brian Gaffney, co-chairman of the Bush-Quayle campaign in Connecticut, calls the race here "very tight," adding: "The odds here have to be slightly in favor of the Democratic candidate, due to the economy."

To understand how Bush could be lagging in a state where his father was once an esteemed United States senator, one needs to look no farther than the local unemployment office. Joseph M. Cohen, an official with the Connecticut Department of Economic Development, calls this recession the worst slump in more than 50 years.

Blue-collar workers are in difficult straits, as they often are in recessions. But this time they've been joined on the unemployment lines by white-collar, middle-class suburbanites who once thought they were immune to severe economic hardship.

"There are people who used to get $75,000 who would be thankful to get a job paying $37,500," Mr. Cohen says. "Clearly this is the absolute worst [economy] since the 1930s." Connecticut, along with the rest of New England, is at the forefront of a "horrendous" economic adjustment taking place in the United States, he says.

That adjustment now is spreading to places like Southern California.

Cohen explains: "This is the first recession that's caught the middle class hard. If what happened here goes across the US, it will certainly destroy the peace of mind of the middle class for the next generation."

At the University of Connecticut in Storrs, political analyst G. Donald Ferree says the root cause of economic distress is the sharp cutback in federal defense spending. On a per capita basis, Connecticut ranks either first or second, depending on the year, in defense jobs. The breakup of the Soviet Union and the scaling back of spending for jet fighters, submarines, tank engines, and other military hardware hit Connecticut right in the wallet.

Dr. Ferree, who is associate director of the Institute for Social Inquiry at the university, says there's an irony in Connecticut's current distress. The 40-year worldwide competition with the USSR had given this high-tech, high-skills state a sense of stability. The Cold War was good for the local economy and almost everyone thrived, from insurance companies with big investments in office buildings to skilled machinists, welders, and engineers who built the weapons. With the apparent end of the Soviet m ilitary threat, "people have lost a sense of what their future will be like," Ferree says.

Roger Therrian, acting director of research and information at the Connecticut Department of Labor, says the downturn has spread across the service sector - banks, insurance, transportation, real estate, and government. Jobs in those areas declined by 5 percent in the past year. Hardest hit, however, were construction, off 11 percent, and wholesale and retail trade, off 6.3 percent.

With every sector sputtering, Mr. Therrian says, "There is no engine for growth."

Mr. Gaffney of the Bush campaign says all this is making it harder for the president politically.

"For the first time since World War II, we have a peace economy," he says. "We are suffering the peace."

Gaffney says Connecticut's leaders realized years ago that the state needed to diversify its economy. But when Jimmy Carter started and Ronald Reagan continued the huge defense buildup of the 1980s, "we took a bite of the carrot," he says.

Now Connecticut must "bite the bullet" and find civilian industries and products that will give this region a new purpose, says Gaffney.

When Ferree asked Connecticut residents in a recent poll whether they would be financially better off, or worse, if Mr. Clinton had been president for the past four years, most said it would have made no difference. Even so, voters here seem ready for a change. If Bush is going to capture this state on November 3, he will have to come from behind - and Connecticut's worried workers will be difficult to convince.

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