Flop-Flops And Other Beach Footwear.

I think that flip-flops could be the best of all beach footwear. Unless you want to walk into the ocean - in which case they totally suck because they tend to float away.

There. Now that the NSA has lost all interest in this post, I can get to the good stuff! The subject changes to ECONOMICS in a bit so if you want to skip the first part just skip down exactly two paragraphs. I do not indent here, I leave a blank line. It makes this more readable. I indent only when I intend to print something out.

Remember Bush saying he never flip-flops? Well maybe he never said this, but the spin machine did. Every day on Fox News and Clear Channel radio stations across the nation.

Now remember Bush pushing for illegal immigrant amnesty, while oddly enough being against Amnesty International? Well today in his election time damage control speech he reversed that. Now he is saying he is not calling for illegal immigrant amnesty. Of course I could go on and talk about how in 2000 he ran on an isolationism platform. You know, America should not be the world police and stuff. Of course the "excuse" is 9-11, and that "everything changed". In reality, nothing changed - except for the theory that isolationism makes for a good foreign policy. But we are all supposed to just dummy up, forget all that stuff, and NOT count it as a flop.

But why is he still hell bent on the unpopular "guest worker" idea? The short answer is that the man understands how our economic system works. Bush may speak like a fool - but the man DID go to Yale business school. No matter how much beer drinking you do in the frat house - it is not possible to go to Yale and not learn anything.

Here is the straight dope - which you will only hear from a few sources. The dirty little secret of capitalism.

Capitalism ONLY WORKS so long as there is something to exploit. Think about it for a second. How is capital created? Where do profits come from? You have to exploit something. For many years, natural resources were the exploited item of choice. There were vast reserves of all kinds of good stuff, just waiting for someone to harvest and sell. Iron. Steel. Oil. Gold. Trees. You name it, and it was there. All you had to do was find it, mine it, and sell it!

And life was ok. But there was a problem. The early industrial revolution saw a vast disparity in the distribution of wealth. The barons of industry were rich beyond imagination. You think Bill Gates is rich - well he is. But compared to just how rich the early barons were Bill is just well off.

Meanwhile, the workers had almost nothing. They lived packed into little tiny apartments. Home ownership? Not for factory workers. You were a renter, and your rent went to make the building owner richer. If you got sick, you missed work. When the rent was due, if you were short you got the boot. All your hard work could be wiped out by a two week illness.

So the labor movement was born. And things got better. At the end of WWII, everything came together. People could work, earn a decent wage, become a home owner, buy a car, and go on a road trip. People had things like vacation time, sick leave, and insurance. Stuff was made - HERE! Exports to war-ravaged Europe and Japan created an economic explosion here.

At this point in time, the "trickle down theory" would have worked. People at the top of the economic food chain, if given extra money to invest, would have invested it in more factories here. This would create more jobs. The demand for labor would drive wages UP. People would make more money, and the government would make more money with a lower tax rate.

So what was being exploited? War-ravaged Europe and still abundant natural resources.

But then it all started to unwrap. Asia and Europe rebuilt. Natural resources available in the USA started to become more expensive than overseas resources. Why? Well American Steel required iron mines which are ugly. And smelting plants are ugly and stinky. People with nice houses in the burbs wanted nothing to do with that stuff - and can you blame them?

But overseas - people were more concerned with other things. Like for example a job of their own. The strong value of the dollar meant that labor overseas became cheaper - and all other things being equal it became cheaper to buy from somewhere else than make raw material here. So the great American steel industry started to die.

And this became a pattern that all industry followed. The jet aircraft meant that cargo could move across the globe very quickly. Cargo ships got larger and larger. Ports got deeper. It became feasible to shift large scale production overseas, where the labor was cheaper.

But nobody really noticed. There were still many jobs in the USA. People could still make a good living. But as the 1970s turned into the 1980s, there was a clear trend - jobs were going across the border. Corporations were going multi-national. Cheap labor was the resource of choice - and the corporations were ready to exploit it. As for jobs - multi-national corporations are NOT loyal to any one nation - they are around only to make shareholders money. That is it. If they can bump up stock value or profit margin by moving a factory to China - they will. And even if people in the nation the corporations "live" in can not afford to buy the stuff they sell - no big deal! As long as someone buys it, the system still works. As long as it is NOT your job that moves to India that is.

It is this reason why the trickle down theory is total horse crap. Capitalism says that you exploit the cheapest thing, and right now that is not oil or gold or trees - it is labor. You have no choice! If I can invest my money in place X to make 5% or place Z and make 8%, I go for the 8% return. Numbers - its all about the numbers. Companies MUST make their earnings estimates or else suffer a stock hit. And if your competition moves overseas so must you - for unless you follow you will not be able to compete.

But yet people still insist that if you give the richest massive tax cuts it will create jobs and help the economy. Who insists this? Mostly the rich and the pundits on TV they pay off. And of course the current government. It did NOT work for Reagan - no matter what anyone says. The 1980s boom was built on junk bonds and junk theories - and it crashed in 1988. The boom of the 90s was built on a slump overseas, and the fluke of the internet. And people in general were hopeful about the future, and felt good about what was going on. Loan rates were low, so people could afford homes. While little if any of this stuff was because of Clinton - it was NOT the late results of the trickle down. And Clinton was able to play along with the situation and not screw it up. The stock market bubble DID pop while he was in office, but that was going to happen no matter what. I am sorry, but "Pets.Com" stock was NEVER worth $300 per share. People got crazy, and the day trade revolution allowed this crazy attitude to reach the market.

Still think I am wrong? Lets take a look at today. Bush has cut taxes right? How is the economy right now? Where is all that extra money going? Where is it being invested? Where are the jobs being created? If lowering taxes means more tax revenue collected - then why do we have to borrow so darn much?

The fact is that if you cut taxes at the top, the top sends the money overseas where it can earn a higher return. Jobs ARE being created - only those jobs are not here. They are somewhere else, where people work for cheap and do not have unreasonable requests like American workers have. Sick days??? You mean you want me to pay you because you do not feel like going to work? People in India do not ask for sick days!

To fix things here what needs to be done is to put the top tax rate back where it was, and give those at the BOTTOM the larger cuts. Trickle UP. And it will trickle UP. The poorer you are the more of your income you spend. Consumer spending is the problem here - not investment. But this is not a very popular idea because the corporations and those with deep pockets buy off both parties. Also, it sounds too much like "communism".

And now you have a basic understanding of why Bush can not drop his "guest worker" program. He knows that the ONLY WAY to bring some production back to America is to allow workers from south of the border to come to the USA to work for a few pesos per hour. Business in America NEEDS cheap labor to exploit. And we all know Bush is more loyal to his pals in business than he is to anyone or anything else.

But in the end, the biggest problem capitalism has is that it creates a system where corporations become more powerful than government. Government is accountable to the people, a corporation is not. We are at that point now.