The unemployment rate among construction workers is very high. Let’s put some of them to work with a WPA-like project, building homes for the needy while they are waiting for the housing market to come back. For example, unemployed construction workers could be paid to help build new apartment buildings (or refurbish old abandoned buildings) to provide permanent, furnished studio apartments for the chronic homeless in urban centers. We might as well do this now rather than later, while the construction workers are available to work. This would help the homeless become safer and healthier (which will also save taxpayer money, as they will need less costly emergency room visits than if they were living in a tent!). The construction workers would be able to renew their skills and get some up to date job references, in addition to getting a salary. They could also put up solar panels on the buildings, which will make the housing project cheaper to run, in addition to providing the workers with valuable solar panel installation experience for their resumes.

Unemployed construction workers could also be put to work building or refurbishing simple, inexpensive, safe homes for low income folks, following the idea of Habitat for Humanity, but on a much larger scale. This could take the form of a WPA-like program, or perhaps the government can just give the money to Habitat for Humanity and partner with them to increase their home building output by about 20X or even 100X or so, so it will really be able to make a difference. It would be great if the homes could be purchased using special no-interest loans that Habitat for Humanity typically uses. In my opinion, having a person own a home free and clear of a mortgage payment is the best way to avoid the cycle of poverty, not only for themselves, but also for their kids and grandkids. Once their homes are paid for, instead of paying rent, they can use their money on food and other necessities. And this is good for the taxpayers too, because the folks will be able to stay in their homes as they age, rather than needing to go to taxpayer subsidized retirement homes when they retire.

Perhaps the construction workers can also build some homes for themselves, too!

Mikus 10 Point Plan:

1. Stimulate solvent local banks and credit unions and not big banks and Wall Street.

2. Negotiate trade agreements that require foreign countries to play by the same environmental, worker safety, union, and fair wage and health insurance rules that Americans play by and that do not ship American jobs overseas.

3. Reform immigration laws to issues foreign worker permit based on the rate of unemployment in America backed up with a zero tolerance secure border and that does not favor just one culture but instead draws on the best educated from all the cultures of the world.

4. Provide free college tuition and real tax breaks for working and most middle class and small business taxpayers.

5. Spend on lasting jobs and infrastructure and clean energy independence such as:

A. domestic natural gas fueling of existing and future power plants.

B. electric distribution grids for the increased manufacture of wind and solar energy production by homeowners and farmers for sale to utilities and to run electric cars.

C. building of smaller schools for no more than 90 kids per grade level pre-K through 8.

D. more parks and better roads.

E. cleaner air and water and safer more nutritious food.

6. make American business competitive in the world economy and lower cost of health care by medicare for all provided doctors and not death panels make health care decisions and negotiate their fees and patients choose their doctors.

7. Make social security and medicare for all solvent by repealing the more than $400 billion in annual government welfare for the rich, $200 billion per year in defense budget waste and fraud, and $60 billion per year in medicare fraud.

8. Eliminate income tax on working families and small businesses earning less than $100,000 per year.

9. Pay down the federal debt by imposing real progressive tax rates on the rich to pay debt and deficit.

10. Convert to a national consumption tax in lieu of earned income taxes.

Let’s “stimulate” companies to hire again. I mean really stimulate (prod?) them to hire more employees in America, rather than using their tax breaks to hoard money and hire more employees in their foreign manufacturing plants (what they are doing now). Here’s my idea: The government pays $1,000 cash, upfront, to any American company that hires an unemployed American worker. They get another $1,000 cash if the worker is over 50 (because these folks are less likely to be hired) and another $1,000 if the worker has been out of a job for more than a year (because these folks are also less likely to be hired). Huge caveat: the company has to give all the cash back if they don’t keep the employee for at least 1 year. I think this plan would work better than a tax break, particularly for small businesses. Of course this plan will cost money, but for each person that is hired, the government will no longer have to pay unemployment benefits and/or public assistance for that person, so in the end it will be MUCH cheaper for the taxpayers! We could try it for 6 months and see if it works.

September 6, 2010

The White House
President Obama
1600 Pennsylvania Avenue
DC 20500

Mr. President,

First of all I want to let you know I am, and will remain, a strong supporter regardless of what is thrown at you. I recognize that you were tossed into a mess that started over 30 years ago with Reagan destroying the air traffic controllers and leading the nation into the dark ages of deregulation, irrational tax policy and never ending war.

I know you and your economic advisors have been struggling with jobs and stimulus lately. Krugman, a supporter of yours, continues to clammer for more stimuli. This will not work!

Paul Krugman is a very smart guy, but I am afraid he may be missing the point on our current condition.

It has taken almost a generation, 31 years to be exact, for the capitalist elite to reduce our economy to its current state of affairs.

There have been bubbles in tech, stocks and housing over this period that have masked the structural challenges we have installed.

Manufacturing today is only 13-15% of the GDP depending on how you choose to measure it. It was approaching 50% at peak. We currently are operating our manufacturing at 65% of its capacity.

What Krugman is suggesting is that demand somehow "benefits America". Indeed it does, but Chinese State Capitalism benefits much much more---here's how----

USA Jobs

-Modest increase in automated container unloading at US Ports.

-More retail sales of goods in US stores modest increase in sales staff.

-Modest increase in rail and truck transportation.

-Modest increase in automated warehouse personal.

Foreign Jobs

-Minerals mined and raw materials converted to base materials i.e.: Rolled Steel (mega jobs)

-Primary production of base materials to intermediate goods i.e.: steel Cable (More Mega Jobs!)

-Secondary and tertiary production processes to incorporate intermediate goods (MORE MEGA JOBS!)

-Transportation of finished goods to Ports with some limited warehouse holding (Same job creation as in the USA)

So, without doing a full econometric analysis (input/output table) the foreign workers are, I believe, benefiting 8-10 X as much as American workers because in the USA we don't make anything anymore!

Stimulus is like pushing on a string as it relates to jobs IN THE USA. However, in China it is a real boom.

The saddest part of the current situation is the fact that manufacturing drives R&D and creative thinking which is now occurring around the world and less and less here.

This fact ensures we will not be leading the world in intellectual pursuits in the very near future.

Capitalists really do not care about that because the transnational corporations control the politics in each country and truly are indifferent to each "country"----they will only consistently seek the greatest return on equity.

Krugman and your team are basically arguing that if you give a nation of Wal-Mart employees more money the nation will create more jobs. Well that is true in a VERY limited sense.

What would work are Labor Equalization Tariffs (LETs) on all imported goods.

“LETs” makes a manufacturer indifferent to which labor pool to use. For example if a Vietnamese worker receives $.80 an hour to sew shirts and the average industrial wage in the USA is $18.00, the labor component would be equalized through a tariff of $17.20.

Now while that sounds like a lot, the labor component of the shirt is only 30% of value.

So.... $17.20 X 30% = $5.16

Each shirt would have a tariff charge of $5.16.

Retailers and wholesalers would need to choose to charge / mark-up or not.

I did the estimate calculation this for a flat panel TV at $1000 and the price would go up approximately $250.00.

But then how many TVs do you need?

Stimulus in a classic sense, will work but on a very limited or muted basis, because we don't make anything anymore.

In fact, this is EXACTLY what we are seeing, "USA suffers...the rest of the world (export economies) recover."

The economic advisors working for you need to resign. It is and will be the only thing John Boehner and I agree on!

Implement “LETs” and watch the country boom intellectually, industrially and sustainably!

We won't need stimulus if we undertake a more enlightened approach!

We have got to get all over this ASAP or I am afraid the Republican Teapoters with kick our butts in November.

Traditional Keynesian technique will not work effectively this time BECAUSE we really do not make anything anymore.

We must dedicate ourselves to changing that reality right now!

Mr. President I know you have great empathy for all Americans and especially for those that suffer most and that is exactly the reason you must lead on the labor equalization tariffs.

You will be leading the American people back to economic health from a very ill advised policy of NOT protecting our industries and standard of living.

I would suggest you consider Paul Volcker to lead the effort to get “LETs” in place, on an executive order basis, due to the national emergency nature of the economy.

I will remain a strong supporter and wish you the best of luck in the future, but let’s not rely on luck.

Let’s just get it done.

Truly yours,

Michael Muoio
3609 S. Barker Lane
Appleton, WI 54915