Vol. 73/No. 8      March 2, 2009

The protectionist trend echoes that of past periods of capitalist crises. It was a major feature in the crises that ultimately resulted in the first and second world wars and is also used to weaken internationalist solidarity among workers.

The new law requires that “all of the iron, steel, and manufactured goods” used in projects funded by the “stimulus” package must be “produced in the United States.” Such a move has in the past led to trade wars.

The law also states that this policy will be applied unless doing so “would be inconsistent with the public interest.” This phrase is aimed at reducing criticism from government officials in Canada and some European nations who had signed earlier trade agreements permitting bids from abroad on U.S.-government contracts.

China, Brazil, and Russia are among the steel-producing countries that will be immediately blocked from exporting these goods to the United States.

The “stimulus” law prohibits banks and other financial firms that receive federal bailout money from hiring immigrant workers on H-1B visas if they have recently laid off U.S. workers. “Independent” senator Bernie Sanders and Republican senator Charles Grassley promoted this anti-working-class provision.

Protectionist moves are also accelerating by governments throughout Europe. A February 16 Business Week article reported that the French government insists that money disbursed to bail out the country’s auto companies has to be spent in France. French president Nicolas Sarkozy has also called for moving the manufacture of French cars from the Czech Republic and Slovakia to France.

The recent reactionary strike by some 3,000 construction workers in the United Kingdom against employment of immigrant workers was fueled by a protectionist campaign promoted by Britain’s prime minister and captured in the strike’s slogan—”British jobs for British workers.”  
 
Unemployment rising
The White House promises that the new “stimulus” package will create or save 3.5 million “American jobs” over the next two years. However, the pace of job cuts by the bosses is not expected to slow down anytime soon. According to Mark Zandi, chief economist at Moody’s Economy.com, the stimulus measure may create about 2.2 million jobs but unemployment will continue to rise to about 10 percent by the end of 2010.

In the 13 months since the recession began 3.6 million jobs have been slashed.

President Obama addressed workers at a Caterpillar tractor factory in East Peoria, Illinois, February 12, promising jobs for some of the 22,000 employees already laid off by the heavy equipment maker. After Obama left, however, Chief Executive Officer Jim Owens told a different story. He said more layoffs are coming before any hiring will occur, reported Fox News.

General Motors and Chrysler are preparing more layoffs and cuts in benefits to get additional bailout funds. The companies are pressing United Auto Workers union officials to agree to eliminating supplemental unemployment benefits, which for 54 years have provided laid-off workers with as much as 95 percent of their net pay. They are also seeking to reduce payments for retirees’ health care and are offering buyouts to most of the 91,000 union workers employed in their factories. At GM, the bosses are cutting 47,000 more jobs worldwide and closing 14 plants in North America.

According to the Wall Street Journal, GM is seeking government funds either for bailing out the company or paying the cost of filing for bankruptcy.

About $282 billion—35 percent of the “stimulus” package—involves tax cuts. The largest amounts are for the biggest companies. GM, for example, gets up to $10 billion in taxes eliminated, according to Investor’s Business Daily. Tax deferrals are given for companies that “restructure” their debt.

Small crumbs go to working people. Workers’ tax deductions will be reduced by about $8 a week. However, those earning the lowest wages “will get virtually nothing for another year,” according to Investor’s Business Daily. With less than $20 billion allotted for tax credits in fiscal 2009, only $500 million goes toward slight reductions in taxes for “low-income” workers, the paper stated.  
 
 
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