A Biden B2B Doctrine for Economic Empowerment (Part II)

by Bobby Reyes

“Classic Joe Biden” | Photo by afagen via Creative Commons CC BY-NC-SA 2.0

During the California (CA) election in 2018, I submitted a draft for then-State Treasurer John Chiang, one of the candidates for governor. I suggested a position paper about how to solve the unfunded pension fund of CA public officials and employees, and at the same time, solve homelessness. I wrote in it also how CA could save the United States Postal Service (USPS). I included, likewise, a long-term solution for the other financial crises that government entities face. And to top it all, assist the federal government in coming up with immigration reform. Unfortunately, Mr. Chiang lost. I decided to rewrite it for the 2020 presidential election hoping that my suggestions could be part of the Democratic Party platforms.

Now that Joe Biden of the Democratic Party is about to swear in as the 46th President, my friends at the Philippine Daily Mirror and I came up with the suggested “Biden Back-to-Basics (B2B) Doctrine.” Hopefully, the new POTUS consider our suggestions.

The Democratic Party’s platforms’ proposal came with this heading: “PSEED Platforms: Solving Unfunded Pension Funds, Homelessness, Save the USPS & Other Crises While Doing Immigration Reform” at this link.
Here are the said suggestions, as updated:

I. SUGGESTED SHORT-TERM SOLUTIONS FOR STATE-PENSION FUNDS.

1.0 The federal government must aid states in negotiating with different labor unions that have lots of retirees drawing seven-figure amounts of pension benefits per year. There should be a way to persuade the unions and their retirees to seek medium-and-long-terms solutions, the initial concepts discussed in this position paper unless the retirees and their unions want to force the remedy of bankruptcy.

2.0 An immediate reduction in cash payment of the pension — the percentage of which based on actual ability (cash flow) of the pension fund to disburse — without risking bankruptcy.

        2.1 The unpaid percentage of the pension may be "paid" (or settled) in municipal or corporate bonds that may be sold in a "Clearing House" that a union federation may own and manage. In turn, the "Clearing House" may sell the bonds to the public, especially to the affluent long-term investors.
        2.2 The state and the various local government units (LGU) with an unpaid contribution(s) to the pension fund must also dispose of non-performing assets (NPA) such as buildings and baseball parks that have become "white elephants." (An example is the City of West Covina's almost-idle baseball diamonds.) They may give the union federation the right of first refusal to buy them -- using part of the said municipal bonds as full or partial payment for the NPA's purchase.
        2.3 They may persuade banks and financial institutions with real-estate properties such as residential units that they have acquired by foreclosure to let a "Clearing House" buy the properties -- using the said municipal bonds in its possession. The "Clearing House" may then upgrade the residences or buildings purchased and sell them for a profit. Or it can farm out to cooperatives of pensioners to run as nursing and retirement homes or sell to homeless families, mainly if they obtain federal grants to make them viable.

3.0 Saving the U. S. Postal Service (USPS)

       3.1 The plan is simple. Persuade the U.S. Congress to reorganize the USPS as a cooperative (co-op) with its employees, retirees, customers, and other investors. States may also invest in the venture to persuade them to construct high-rise tenement affordable housing on the USPS huge under-utilized properties. They may design new buildings with an underground Distribution Center and parking levels for their delivery vehicles.
        3.2 The ground-and-upper floors can be the USPS offices where people can deliver mails, buy stamps, money orders, and other services offered presently to the public. Other spaces can be rented or leased on a long-term basis to shops, restaurants, medical clinics, etc., to generate additional income for the consortium. The rest of the buildings can be devoted to affordable condo units for the workers and other interested tenants or condo buyers. The restructured post office can be the commercial center of small towns and be the nucleus of a "reinvented" mall or shopping center for cities. (A "Reinventing the Mall" -- as Part of the USPS Plan -- will  be Part IV of this presentation.)

4.0 Other short-term solutions for the homeless may be discussed and agreed upon by the parties concerned — as may be found to be viable and approved by a majority of the stakeholders.

        4.1 Negotiating with the different churches of any denomination to convert their parking spaces and build high-rise tenement housing with multi-level underground parking, similar to suggested for the USPS properties.

5.0 Another solution for homelessness. Officials may persuade some of the homeless to accept board and lodging (B&L) in nursing or retirement homes abroad. Some of the proposed sites can be located — as joint ventures — in several Central and South American and Asian countries like the Philippines (PH). On average, the cost will not exceed $2,000 per patient or retiree per month. Contrast it with the current price in the United States of $100,000 per homeless or retiree per year, including police and medical care (usually at Emergency Rooms). I can produce a more detailed comparison to back up this proposal.

        5.1 They may persuade aliens who have approved petitions (but currently are "illegal residents" in the U.S.) to go back to their home countries. Many of them will gladly return temporarily to their homeland -- in exchange for employment in the proposed B&L or nursing homes. If they guarantee that their time spent in their home countries taking care of the American homeless patients will be counted in their waiting period for their entry visas to become current. This incentive will significantly reduce the number of over-staying aliens with approved family or employment petitions (especially in the agricultural industry).

II. SUGGESTED MEDIUM-TERM SOLUTIONS

1.0 They may persuade public employees’ various retirement funds to form a consortium that can undertake civil-work projects turned into “Public-Private Partnerships” (PPP). The projected profits can turn the pension funds into self-amortizing or self-paying business enterprises requiring minimal support from the public coffers. The consortium can even bid for new federal infrastructure projects in California and other states. It can generate more jobs for the retirees who are young enough to work or for their qualified family members.

2.0 Examples of civil-work projects are constructing passenger and cargo terminals at the two former air-force bases in San Bernardino County to offer to foreign stakeholders under the PPP system. The two can become commercial airports that can be hubs for passengers and cargo (distribution centers) for firms like the Federal Express (FedEx) and their partners and airlines of the Association of Southeast-Asian Nations (ASEAN). The ASEAN has more-than a half-a-billion population and millions of immigrants in California — from the 1.5 million-strong Filipino communities, the 1.0-million Vietnamese Americans, the hundreds of thousands of Thais, Cambodians, Laotians, Indonesians, Singaporeans, Malaysians, New Guinea Papuans, and Burmese. (I actually submitted in 1998 the same proposal for converting the former Norton Air Force Base into a commercial hub of commerce and aviation but the San Bernardino County and City officials then in-charge of it never even bothered to reply to my proposal.)

        2.1 They can also turn-over the long-delayed "Bullet Train" Project (BTP) from Southern to Northern California to the pension-fund beneficiaries' consortium. The additional equity by foreign investors may make the project viable. And perhaps more feasible if the BTP can have "Communities (Cities) of the Future," which will have clusters of affordable vertical housing, schools, offices, medical facilities, shopping centers, and businesses built around each station. The BTP consortium to team up with its foreign partners in the ASEAN, for instance, to provide train (both commuter-and-high-speed) systems and manufacture commuter rail cars and baggage cars in California and ASEAN sites for sale to its foreign partners/clients and even to American commuter systems.

3.0 The PPP Consortium – as spearheaded by the proposed pension-fund federation and its Clearing House — can also engage in joint ventures with client countries. Joint ventures like developing the 200-mile Economic Zone in the Pacific Ocean of the country-partners (like Mexico and Canada) create a sustainable fishing industry. The experience can come complete with canning and fish-processing infrastructures and providing modern fishing boats (that can be built by California boat-building companies or revived shipyards). For instance, a project in Sorsogon Province, Philippines, that we have discussed with West Covina city officials, can export by air blast-frozen seafood and marine products worth about half-a-billion dollars per year (with just a gestation period of five years). But it has to have modern fishing boats (like a thousand of them) and fishing ports. The United States imports more than 90 percent of the seafood that Americans eat each year. And the project can produce lots of commercially-grown tuna in Sorsogon Bay for export to Japan. And this writer can speak with authority about it, as he registered the domain name, www.sorsogonbay.com.

4.0 Executive Summaries of how the PPP consortium can contract with foreign countries. The consortium can build police academies (complete with state-of-the-art crime laboratories, computerized patrol cars, ambulances, and fire trucks). Other projects are sports venues with athletes’ academies, medical schools with general hospitals and medical research-&-research (R&D) centers, tourism projects (complete with modern airports and tourist-oriented modern facilities), and other major industries. All of these are on a turn-key basis. All of these projects can deliver considerable revenues to the retirees-led PPP and give them more years of productive work; the wages earned abroad can lessen their dependence on the retirement funds. Most machinery exports, including fishing boats, cruise ships, commercial aircraft, are required in and by the various California-led PPP projects abroad, which the U.S. Export-Import Bank may finance.

III. SUGGESTED LONG-TERM SOLUTION

I will discuss this in Part III of this presentation. It is a solution of forming an “Institute of International Debt and Development” (the so-called “I2D2”), as initially proposed by James Robinson III, then the chairman of the American Express. This writer has been pushing it since 1988, but the policy and decision-makers of the United States and other countries have refused to touch it.

This presentation is intended merely to serve as an eye-opener. It can be the start of a dialogue with the Public and Private Sectors that the White House can initiate and lead. The conversation can result in forming study groups that can modify, improve, and quantify the ideas proposed. And turn them into feasibility studies.

As our Asian ancestors have said, “A voyage of a thousand miles begins with the first step.” We urge President Biden to take that first step. And Americans will never forget his visionary leadership and dedication to the public good — using the “back-to-basics” (B2B) principles.

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