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Economy Improving, But Budget Challenges Remain, Expert Says In Wilton Talk

Webster Bank economic adviser Nick Perna speaks during a breakfast meeting hosted by the Wilton Chamber of Commerce on Tuesday. Photo Credit: Frank MacEachern
Webster Bank economic adviser Nick Perna speaks to a crowd of about 30 people during a breakfast meeting hosted by the Wilton Chamber of Commerce. Photo Credit: Frank MacEachern

WILTON, Conn. -- Connecticut's economy and job creation is improving, but a noted Fairfield County economist said the state's budget is a cause for concern and he didn't express much confidence in the state's political leaders, including the General Assembly, in a talk in Wilton.

“When times are good, they spend. When times are bad, they play all kinds of games,” economist Nick Perna said Tuesday about politicians. He made his speech at the Wilton Chamber of Commerce’s annual “Eggs & The Economy” breakfast held Tuesday at Marly’s Restaurant.

Perna, economic adviser to Webster Financial Corp., also took a shot at Gov. Dannel P. Malloy’s budget director Benjamin Barnes' comments that the state is in a continual state of crisis with its budget.

“I wish he had said that before the election instead of talking about Foley’s yacht,” Perna said, referring to Malloy's narrow victory over Republican Tom Foley in November’s election.

Instead of what should have been a substantial public debate about the state’s budget and economic policies, the campaign turned into “a non-issue election,” Perna said.

While he was concerned about the budget, he said the state's job recovery is strong although it is slightly below the national average. He expected slow, but steady job growth to continue.

One area the state has to do more on is look at how it delivers services, he said.

Perna said the state, which has looked at changing how it provides services, is still working like it did 30 to 40 years ago. He compared that to Jack Welch’s tenure at General Electric, when he cut out layers in the company to streamline the operation and concentrate on what the corporation did well.

On national affairs, Perna said he was concerned that the U.S. Congress, now in Republican control, would continue to chip away at the Affordable Care Act and the Dodd-Frank Act, legislation that made the most significant changes to financial regulation in decades. It passed after the near meltdown in the financial markets in 2007-08.

Opponents of Obamacare have to come up with alternatives to it before tearing it down, he said. Perna also warned that weakening Dodd-Frank could allow the same risky tactics that led to the 2007-08 collapse.

Turning his attention to world affairs, Perna believes the price of oil would go up but not quickly as in its recent slide. The drop in prices is causing significant problems for oil-producing companies, including Russia, that rely heavily on it for their budgets.

Russian President Vladimir Putin has masked many economic difficulties by blaming the West, Perna said.

“He could blame all of Russia’s problems on the West. Beautiful idea, right? But he didn’t count on oil prices collapsing,” Perna said.

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