Protectionism: can it help us survive?

Original article, by Neil Faulkner, via Socialistworker.org (UK):

The economic crisis that swept the globe in 2008 provoked debate about whether individual states or trade blocs could insulate themselves from the international turmoil through “protectionist” economic measures.

Protectionism, to my understating, is an attempt to protect your markets by placing barriers of various types to imports. For instance, if the US were to place a $2000 tax on every car we imported, that would be a protectionist measure. Protectionism would seem to be the opposite of free trade.

In reality the distinction between “free trade” and protectionism is false – the so-called “free market” has always involved states defending and promoting the capitalist firms based in their national economy.

In an earlier paragraph, Faulkner points out how the 'developed' countries have used institutions such as the IMF and World Bank to impose global markets and free trade on smaller undeveloped countries. Isn't this a form of protectionism under the guise of free trade? You betcha! In fact, free trade is nothing of the sort.

Protectionist ideas are sometimes popular with workers facing redundancies. They seem to offer a simple explanation and solution. If workers are losing their jobs in British car-plants, surely the problem is the foreign cars on sale in local showrooms?

Faulkner then points out that protectionism was used, and failed, by Great Britain during the 70's and 80's, while it's use during the Great Depression resulted in a huge number of unemployed. Protectionism, while it may seem to be a simple answer, apparently does not work.

What's the answer? Well, of course, a full employment economy with good wages for all. Sure, the super-rich and the bosses wouldn't get more super-rich as quickly, but the poor, middle and working classes would be able to afford their consumer goods without going into great debt. As you can imagine, Faulkner suggests a socialist alternative, which may be a good way to face the economic crisis we are in. Dennis Kucinich has talked about 'Fair Trade,' where the economic partners have signed bilateral trade agreements which are conducive to workers' rights without allowing a great economy to smother the smaller local economy. Some look to the Scandinavian model of social democracy.

Where we head is up to us. We can sit back and allow the bosses to continue on the merry way until the next economic collapse. We can also choose to band together to fight for the rights of all workers, whether poor, working or middle class. The time for the struggle is now. Where it ends up will probably determine the economic order for the next quarter to half century.

Ready for the union

Original article, a comment subtitled Adam Turl looks at what unions can do for young workers--and what youth could do for organized labor, via socialistworker.org:

A RECENT study, "Unions and Upward Mobility for Young Workers," by the Center for Economic and Policy Research (CEPR) confirms that the need to join unions couldn't be a more pressing issue for those coming of age today.

While the main questions will always be wages and benefits, there are other ways workers can prosper by joining a union. When a change in working conditions is arbitrarily introduced (such as consolidation of local government), a unionized workforce would be more likely to be listened to than individual workers. There is strength in number, under most circumstances.

Of course, workplace organization was an urgent need for youth even before the onset of the biggest economic crisis since the Great Depression. The prospects for young working-class people had already worsened after three decades of stagnant wages and rising inequality.

An organized working class would be much more of a force, particularly when facing what looks like another four to eight years of the same types of economic policies we've had for the past 30 years. Congress can ignore the workers, as they have for the most part with the bailouts of the banksters and the bosses. Even the bailout of the auto industry appears to be hinged upon the virtual emasculation of the workers (and the UAW is going along with it).

The CEPR study notes that average wages (adjusted for inflation) for 18- to 29-year-olds were roughly 10 percent lower in 2007 than in 1979. Earlier research showed that some young workers were making up to $8,000 less per year in 2004 compared to 1975.

The next time one of your bosses tells you that union representation is not good for you, remember this study. Their job is, for all intents and purposes, to take money out of your pocket and put it in theirs. Individually, there might not be much you can do about it. A unionized workforce is able to fight such actions, up to and including shutting down the business.

Turl's article is a good starting point to understand why unions are important for young workers, as well as those workers already in place. The need for strong unions has rarely been so clear. With the forces of the bosses and the government aligned against the poor, working and middle classes, it's time for the labor movement to be reinvigorated and supported.

Go here for more information on how one union, the IWW (Industrial Workers of the World), is fighting and winning against Starbucks!

Obama stimulus plan to include major corporate tax cuts

Original article, by Jerry White, via World Socialist Web Site:

For weeks, spokesmen for the incoming Barack Obama administration have suggested that they would respond to the economic crisis by launching a massive program of public spending, with some supporters comparing the scope of the planned economic stimulus package to Roosevelt's New Deal measures during the Great Depression.

Well, that's what the 'hope' was. Wouldn't it be nice to think that economic stimulus was going to go toward manufacturing and infrastructure repair? But, always remember, Obama taught at the University of Chicago (and yes, I know it was law and not economics, but the taint is still there).

Details of Obama's proposals began to emerge on Monday, and it is clear that the US president-elect is proposing a relatively small "stimulus" package, which will include further massive tax incentives for corporate America. The provisions for ordinary people will do next to nothing to alleviate the impact of the greatest economic crisis since the Great Depression.

Tax cuts for the corps! Whee! Dare anybody write it: The Republican economic play book is still in use. Fasten your seat belts....

The Wall Street Journal noted that the "Obama tax-cut proposals, if enacted, could pack more punch in two years than either of George W. Bush's tax cuts did in their first two years." Many of Obama's proposals, the newspaper wrote, were, in fact, extensions of measures carried out by the Republican administration over the last eight years.

Obamanomics is Bushonomics warmed over? Say it isn't so, Barrack!

Enjoy the read, particularly if you're a Republican. Who'd have thought that the Democrats, in their lust for power, would elect an adherent to neoliberal economic policies? More and better Democrats is a joke played upon the American people, and Obama was in on it from the start.

Greece rises in rebellion

Original article, an editorial subtitled The Greek socialist newspaper Workers' Left looks in this editorial at the roots of the revolt that began with the killing of a teenage student by police in Athens--and what the protests mean for the future, via socialistworker.org:

THE WAVE of struggle that has burst out after the police murder of Alexandros Grigoropoulos has been justly characterized as a social rebellion by youth in Greece.

The struggle against the government in Greece has be relegated to the back pages, if covered at all. While not have the 'glamor' of the military actions in the Gaza strip, we can perhaps learn more about how one small country is facing this current economic crisis. Is the radical left in solidarity with the population, led by the students, in Greece? Is there the possibility of an overthrow of not only the political order, but the economic order as well?

Thousands upon thousands of young people--high school and university students, and young workers--have taken over the streets of all the important cities in the country, sending a loud message: "We are not going to take it no more!"

More power to them! We, in the US, have sat back and watched as our government has spent trillions (!) of dollars to bail out the very wretches who have caused our economic collapse. Where are our marchers? The fact that these actions by the students of Greece were precipitated by the killing of a teen student begs the question as to why we aren't having nationwide protests against the excesses of our police?

By targeting the police, they made clear their decision to confront the suffocating repression used against them. By the targeting the banks--the symbol of capitalist greed--they showed their intention to fight against the exploitation that crushes the whole of the working class.

'Social order' is being used to crush the students and working classes, not only in Greece but around the world. It is the poor, working and middle classes who will be saddled with the cost of the bailout of the bosses. One can only see harder times in the future for the the vast masses of the general population of the world, while the well-to-do get to continue their profligate ways.

It has also stood up against a slander campaign organized by the government, with the support of the media and, unfortunately, the Communist Party, and the silence of PASOK, the main social democratic party. The propaganda about "blind violence" was designed to divert attention from the actual activities of the movement and to force the youth into retreat.

It seems that the parties of power all serve the same master. Why should we be surprised, as the same is true here in the US. Until the realization comes that this is class warfare, with the government allied with the bosses against the masses, we will continue to see the crushing of any real 'change.'

Read the original editorial to get a feel for a left view of the struggles in Greece. Keep in mind that we, in the US, are being sold that the party which is soon to hold the legislative and executive branches of our government are to bring 'change' to how things work here. If we are to consider the situation in Greece, perhaps we won't be surprised by how little things will actually change.

US and global manufacturing collapsing

Original article, by Joe Kishore, via World Socialist Web Site:

Manufacturing in the US is collapsing, with a key index falling to its lowest level in 20 years on Friday. Other figures released yesterday show a downturn in production throughout the world.

This on top of 30+ years of deindustrialization here in the US. The frightening point about this collapse is that industry is probably what will be needed to pull the US out of this current recession/depression. Until the US decides that industry is actually really important, it is likely we will continue in this bad economic downturn.

The Institute for Supply Management reported that its key index, the Purchasing Managers Index (PMI), fell to 32.4 in December from 36.2 in November. Economists had expected a much slower decline to 35.4. It is the lowest reading of the index since June 1980. A figure below 50 indicates contraction in manufacturing.

A three point decline in on month. Change that: A three point decline which the government is willing to admit to. This graphic shows just how steep the current decline is:

Norton Ore, chair of the ISM Manufacturing Business Survey Committee, reported, "The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time. New orders have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948." Prices also fell the most since 1949.

Read the rest of the article for further information on our manufacturing collapse. Those who are thinking that the financial sector is the only one which is part of the failure of our capitalist system are in for a major surprise. Kishore finishes with this look into our future:

The manufacturing index figures open 2009 with a sign of what is to come: a global economic slump on a scale not seen since the 1930s.

As others have noted, Wall Street seems to be shrugging off this news. Why not? The financiers have received hundreds of billions (if not trillions) of dollars in bailout funds. They're sitting, if not pretty, at least in better position than they deserve to. The economy continues its free fall while the bosses party. It's time for the poor, working and middle classes to join together to fight against our economic masters.

The crash of 2008 and the prospects for 2009

Original article, by Nick Beams, via World Socialist Web Site:

Whenever a historical review is made certain years attract attention because of the decisive events with which they are associated. The years 1914, 1929, 1933, 1939 and in more recent times 1956 and 1989 are some that come to mind. The year 2008 is destined to join this group.

With the effects of so many bubbles popping showing up last year, can there be any doubt about this? The failure of the capitalist system (or the inability to face Adam Smith's invisible hand) ensures hard times for everybody small enough to fail. Mind you, the bosses are sitting pretty for the time being, as they have governments at their beck and call.

The figures speak for themselves. The US government alone is committed to providing more than $8 trillion to prop up the financial system. Interest rates charged by central banks around the world have been cut to record lows, in the case of the US to near zero, in a desperate bid to prevent a financial meltdown.

$8 trillion for the bosses and bankster frauds. Think about that. Then keep in mind that the $35 billion for the auto industry is going to be used to try to break the auto unions and the workers. Plus, you know that there's going to be howling at the very effort to stimulate the economy (and it's likely that that stimulus will go towards the corporate masters as opposed to the poor, working and middle classes). The capitalist God plays dice, and the dice are loaded.

The collapse of financial markets is now being matched by the decline of the real economy. Next year total economic output in the advanced capitalist economies will fall—the first such contraction in the post-war period. According to Olivier Blanchard, the chief economist of the International Monetary Fund, the contraction in demand "could exceed anything seen since the Great Depression in the 1930s."

Yay! *sarcasm*

And the prospects for the US, the heart of the global economy, have become, in the words of a recent report from the Levy Economics Institute, "uniquely dreadful, if not frightening."

According to the Levy report, US gross domestic product (GDP) will fall by about 12 percent below trend between now and 2010, with unemployment rising to about 10 percent. The report concludes that the "virtual collapse of private spending" will make it "impossible for US authorities to apply a fiscal and monetary stimulus large enough to return output and unemployment to tolerable levels within two years."

We're teetering on a tightrope with no end in sight. Fall to the left and we get a deflationary depression. Fall to the right and we get hyperinflation. And waiting for us under either circumstance? The World Bank and IMF placing their neoliberal restrictions on the economy. Third world, here we may be coming.

Read the entire article. It gives a very good overview of how things are right now and what the problems we are facing look like. The article's final view is also worth reading:

As world capitalism enters its most serious crisis since the breakdown of the 1930s, and the ruling classes draw on their own experiences, so the working class must assimilate the lessons of history. The only way of preventing a repeat of the experiences of the Great Depression, which culminated in the deaths of millions in World War II and the use of nuclear weapons, is the overthrow of the historically-outmoded profit system. The year 2008 marks a milestone in the disintegration of world capitalism; 2009 must become the starting point for a resurgence of the struggle for international socialism by the world working class.

It's not just the working class, but the poor and middle classes also. The change of perspective must come from all three, and a unified front needs to be presented to the bosses. A Socialist solution may be what is in store for us, or it may be a mixed economy: The thing to keep in mind is that the bosses, politicians, corporations, military and the bankster frauds will be fighting to keep the current system (with some window dressing) in place.

David Walsh selects his favorite films of 2008

Original article, by David Walsh (duh!), via World Socialist Web Site:

2008 will be remembered as the year of a global economic crash and a turning point in modern history. It will not be recalled as a great year in filmmaking, despite a few bright spots. How, when and through whose efforts the consequences of the unfolding economic calamity for masses of people worldwide will find artistic expression is still impossible to say.

I didn't see many movies this year in the theaters. I did go to see Milk, which I enjoyed, as I'm a big Gus Van Sant fan. Here's a list of films which you may not have heard about, which may be coming to your area.