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A 'Manhattan Project' Jobs Plan That Even Republicans Might Like

11/08/2010 01:17 pm ET | Updated May 25, 2011

Since Republicans don't plan to compromise with Democrats, we can assume that their job-creation plan is to continue the Bush tax cuts on rich folks so that they can upgrade to a new Mercedes, thus assuring lifetime employment for German auto executives. Unfortunately, the bipartisan delusion when it comes to consumer spending in general has resulted in most Americans running record "personal deficits," which are as harmful to individuals as they are to countries.

Unfortunately, the Democratic stimulus plan remedy will also have a limited effect on job growth, since it's pretty much restricted to those who work in construction, not those who have lost factory jobs or white collar jobs.

How did America get into this job pickle? Given that it seems like most of the stuff we buy seems to be made in China, many blame outsourcing for the anemic job market. Andy Grove, founder of Intel, wrote in Business Week that we ought to fight back with "an extra tax on the product of offshored labor... If what I'm suggesting sounds protectionist, so be it."

And I must admit that while I love Apple products I have misgivings about the Chinese company that assembles many of them: Foxconn, where 11 people recently committed suicide due to being overworked. Foxconn's revenues are not only larger than those of Apple, Microsoft, Dell or Intel but it employs more than the combined worldwide headcount of Apple, Microsoft, Dell, HP and Sony. There's a joke that in 20 years everything will be made by Foxconn and sold by Walmart.

But is outsourcing really the driver of our economic doldrums? According to the Mackinac Center for Public Policy, while a study by Forrester Research projects that the number of outsourced jobs will increase to 3.4 million by 2015, that number is a small percentage of the 138 million people that comprise the American workforce.

Most likely the best fix for our economic malaise isn't a trickle-down, stimulus OR protectionist approach but to use federal funds for a "Manhattan Project" that would kick-start high-tech innovation that will create high-skilled jobs.

Journalist Fareed Zakaria thinks we should spend 6 percent of our GDP on R&D because future jobs will be driven by knowledge and innovation. "We should pay for this with a 5% national sales tax, which would be partly offset by a small reduction in income taxes," he writes in Time magazine. Zakaria probably correctly figures that conservatives would go ballistic if we suggested raising income taxes to fund this endeavor.

John Kao, an expert on innovation who advises Fortune 500 business leaders, goes even further to suggest that we invest federal money in 20 Innovation Hubs, at an initial cost of $20 billion, with a focus on digital media, clean technology, and agricultural biotechnology.

In his book, Innovation Nation, Kao references the Manhattan Project, the Apollo Project and Sematech as templates for success with rapid turnaround times. It took less than four years for the Manhattan Project to succeed at producing materials for bombs and less than 12 years for the US to put a man on the moon after the Soviet Union launched Sputnik. A mere seven years after the US government and 14 US semiconductor makers created Sematech in 1987 to compete with the Japanese, the project was successful enough that federal funding was ended.

Interestingly enough, not only were two of these three projects launched under Republican administrations, but the creation of Sematech occurred under Ronald Reagan, despite the fact that the Reagan revolution is defined as reducing "the people's reliance on government."

Bottom line: The scariest part about our economic doldrums isn't the challenges we face but the deadly combination of Democratic malaise and The Party of No's determination to humiliate them rather than collaborate with them. Divided we fall, as the saying goes.