Several weeks ago, Ben Bernanke decided that we needed some quantitative easing. What that really means is that the Federal Reserve is going to create $800 billion out of thin air and cause massive inflation. He believes that this cash infusion will create jobs in the marketplace and improve our economy. Bernanke, who spent most of his life in working in academia and government, currently serves as the Chairman of the Federal Reserve. In my opinion, he has no hands-on experience or understanding of what makes a company, business or small enterprise work. He is a textbook economist doing textbook things in an attempt to fix real world problems. So far, nothing he has tried has worked. His efforts have led us into the deepest financial abyss since the Great Depression. What we need is some new thinking by real entrepreneurs, not economists and bureaucrats.

I have come up with a few solutions that were printed in articles over the last few months. My ideas, according to the failed economists, are too simplistic to actually work. These ideas consist of common sense solutions that our forefathers used when they encountered the same economic issues that we face today. It is time for us to be creative in our thinking if we want to fix this country. If we don't act ourselves, our country will collapse under the inflationary weigh of the paper dollars spewing out of the Bernanke printing press. I believe that the solution is to reestablish manufacturing as the backbone of the American recovery. Our people want jobs, not unemployment insurance and welfare. Let's tear down abandoned factories and rebuild new factories with state-of-the-art tools and equipment to create jobs here in America. We need to dominate in critical industries as we have in the past.Let me start with the best location in which to apply my ideas. Michigan has the highest unemployment rate. What could be a better place to start the recovery? After all, things can't get worse! I suggest that we find some abandoned factories and determine the products we will build in them. For ideas on what to manufacture, I looked at items which are in the forefront of technology, easy to manufacture, low cost to transport, and will have increasing demand in the future. I'm going to start with light bulbs. Yes, you read that correctly, light bulbs. The government in their wisdom decided to ban incandescent light bulbs that will be phased out by 2014. The wizards in Washington want us to use fluorescent bulbs that contain mercury. To ensure that no harm is done when a bulb breaks, they have given us special instructions on how to clean up the mercury from a broken bulb or thermometer. (http://www.epa.gov/hg/spills/#whatnever). Put on your rubber gloves and safety clothing and make sure there are no children present when the bulb breaks or during the cleanup process. This is a fine example of government stupidity. Discontinue safe clean incandescent bulbs and force people to replace them with fluorescent lamps that contain dangerous pollutants.Some of us are sensitive to fluorescent lighting. They can cause headaches and even migraines. There is a newer source of lighting called LEDs (light emitting diodes) for these people. I have started to replace the lights in my house with LEDs because my wife is one of those afflicted with the sensitivity to fluorescent lighting. We must also cut our energy consumption as we have implemented solar power to enable us to be entirely off the electric grid. LEDs offer a very good light source however they are expensive. Floodlights for the exterior the house can run $75 each and lamps for the interior run in the $40 to $75 range. This is for each light bulb! When I looked at the packaging I discovered that they are all made in China. Why not make them here in the United States? Not only do we have the technology to make them, but we have factories and skilled workers in the Rust Belt who would love to work again. Let's take over a derelict factory in the Detroit area and make LED light bulbs.Where do we get the funding? I say we should sell some light bulb bonds to Ben Bernanke's Federal Reserve. The current plan is for the Federal Reserve to buy $600 billion in bonds from banks to expand the monetary supply. The banks will not fund the creation of factories, or even many small businesses that are screaming for capital to expand. We can issue $100 million in light bulb bonds to the Federal Reserve in exchange for cash. The interest rates on our light bulb bonds will be less than 3 percent, creating an effective and cheap source of money for us to build our factory. Also, we are more likely to repay the bond when it is due as we are hard working Americans who pay our debts, not bankers waiting for a bail out. (Or we could be like General Motors and sell shares to pay off the government and make a huge profit for the government). With this money in place, we will approach the local government to provide us with a foreclosed factory that we will refurbish. The incentive for the local government is twofold. First we will hire people in their community who are currently unemployed and, at the same time, we will enable their local tax base to be expanded. Since most of these communities are hurting, they may be willing to accept this type of an agreement. If one community does not want it, then we move on to the next. We may have to change the terms somewhat but we will get a factory that is usable at below market cost.As we were searching for the property, we will use unemployed engineers to design various types of LED light bulbs. We can start with the standard light bulbs that screw into normal sockets. A four or five watt LED replaces a 40-Watt incandescent bulb. A 13 or 14 Watt LED replaces 100-Watt light bulb. We can craft a range of light bulbs to replace incandescent light bulbs from the low-end of 25 Watts up to a high-end of 150 Watts. Once the design is complete and the patent is filed, it's time to design our tools and machines to make the light bulbs. Since most tool and die making companies have moved overseas, I suggest that we start a tool and die business to make machines to manufacture LED bulbs. I'm sure there are plenty of unemployed tool and die makers who would be willing to assist in this process. Once the machines are designed and built, we move them into the factory and train our workforce.We will need to hire a few executives and some managers (not too many chiefs as they are overhead, we need workers). Let's hire some shop supervisors and factory workers. We will only draw from the ranks of the unemployed so that we may be able to get some government funding for retraining. We will do the training now and if the government decides to bless our endeavor with dollars, we will gladly accept them once we are up and running. Before we start production, we will need to order raw materials prior to the start-up date; hire or create an E-commerce sales force to sell light bulbs; and set up a logistics and distribution system to deliver the light bulbs to homes and stores around the country. To ensure that this entire process from retooling the factory to shipping the light bulbs moves quickly, we will pay bonuses for the early completion of each milestone. The earlier something is ready, the larger the bonus. This method worked well in Southern California after the earthquake of 1994. Bridges and roads were safely rebuilt in record time, without government red tape.You are probably wondering why I picked LED lights. I picked them because they are easy to make and ship and have a high retail value. By opening up a factory here in United States we can lower distribution costs and take it advantage of the extremely high markups that are currently in place. This will enable us to quickly earn profits and repay the Bernanke bond. That $40 light bulb I bought last week at Lowe's may sell for as little as four dollars within two years if a U.S. factory makes them. Since these light bulbs are more cost-effective, people will buy them. Based on the information provided with one of light bulbs I bought, each light bulb will save seven dollars worth of electricity a year. At four dollars per light bulb, the payback is seven months. These bulbs have a service life of 50,000 hours therefore we will have years of energy savings from each bulb. This will help us reduce our overall energy requirements and make Al Gore joyous with our reduced carbon footprint. We can use the energy savings to buy other goods and services that we need, creating even more jobs.I'm sure you think I'm crazy, but these are difficult times. We need people who are thinking not only outside the box but also off the planet. We need fresh ideas based on new thinking, not revamping of old ideas that failed us in the past. Why can't we make electronics for the automotive industry here in the United States? Why can't we manufacture televisions, computers, iPad's, and cell phones here in the United States? At the present time, we only have one company that manufactures refrigerators, washers and dryers here. Let's get several more companies to start making these appliances in American factories, using American workers. Heck, while we are at it, lets manufacture more of our automobiles and parts in North America.Ben Bernanke's cash infusion will be wasted if it is given to the banks to distribute. It will only cause inflation and will not put us back to work. I expect a high default rate when the banks fail to redeem the bonds at maturity. Instead, lets create a new generation of entrepreneurs, funded by cheap money, using vacant factories and land. Our unemployed would like a fresh start. Howard Hughes and Thomas Edison were considered mad in their era. Edison invented things and Hughes built the factories that created the American dream. We have to start somewhere if we are to restore our nation to prosperity. We can turn some rusted factories into gleaming examples of American ingenuity. We can start with light bulbs or televisions, cell phones, or with iPads. It doesn't matter to me where we start, but please let's get going on reinventing our economy.The Government will never be able to do it. It is up to individual investors to create a vibrant economic future for our children and grandchildren. I ask you to put pressure on your elected officials to start rebuilding America and doing it now. We cannot wait to put our people back to work. Americans have pride in what they create with their brains, hands and sweat. They will arise to the occasion if someone just gives them a chance. Create factories, not government departments or offices. Employ workers, not bureaucrats. Our people want to pay income taxes, not collect on the dole.© 2010 Gordon Smith All Rights Reserved