Brazilian President Dilma Rousseff makes the symbolic first cut of a steel plate - marking the beginning of submarine production - 16 July 2011
Al Jazeera, "Brazil's new nuclear subs to defend oil wells" - July 23, 2011

The Western industrial switchover from manufacturing to service industries What the highly technologically developed West is discovering is that its move from manufacturing to service industries does not really create the jobs necessary to keep a middle class society fully employed.  The loss of manufacturing jobs to countries in the Third World where labor is much, much cheaper - starting in the late 1970s and increasing rapidly over the next several decades - has benefitted tremendously a smaller class of business professionals (a rising social elite) at the terrible expense of moderately skilled middle class industrial workers in the West.   The changeover from manufacturing industry to service industry was however hailed a the startup of this switchover in the 1970s as a vast social-cultural improvement for everyone.  People who lost manufacturing jobs could be retrained - and brought into the new world of service industry where the working environment was "cleaner" and physically less taxing.  And so the nation got behind a shift in the American educational program - away from the traditional understanding that a high school education prepared anyone for a well-paying middle class job in the manufacturing world.  Empahsis was placed on gaining 'higher education' (no longer just in the college "humanities" as it had previously been) in support of 'professional' and 'pre-professional' jobs in the human services world.  It sounded like a marvellous idea at the time.  But it would soon reveal some servious economic flaws that would hit the West hard by the year 2000. The sad economic results A growing income gap between a dwindling numer of successful - and highly paid - service professionals and a declining Western middle class began to reveal itself dramatically in the first decade of the 21st century.  Many Westerners that would have been part of the middle class under an industrial economy found themselves sinking into a condition of economic insecurity.  They maintained middle class economic expectations only by going heavily in debt to purchase the visible features of the middle class life style.  But a huge financial unreality began to develop behind this development - both for the borrowers, and for the banks that accommodated them in this program of borrowing. At the same time, growing batallions of welfare familes and youth gangs found themserlves  idle in the formerly manufacturing, now service, urban economy, unable to contribute anything to the national economy.  In fact they become a huge financial - and social - burden as they watched their lives slip away. Unanticipated causes The fundamental problem here is that service industries do not have the multiplier effect that manufacturing industries do:  a service-industry type job does not automatically call into existence other supporting jobs the way manufacturing does. At the same time, expensive training for service industries does not guarantee the student a good-paying job at the completion of the training period.  Jobs in the service industry do not grow in number in response to economic stimuli the way manufacturing jobs do - and the increase in the number of trained service workers who are adapting to the new economic circumstances are forced however to take jobs at the very low-paying end of the service industry (working in retail stores, fast food restaurants, etc.)  These jobs do not come close to supporting a traditional middle class lifestyle. This is the main reason for the way the level of growth of national productivity has slowed way down in the West - at the same time that a number of Third World economies are exploding. What can be done about this situation? Industrial workers in the West have outpriced themselves in comparison to the cost of similarly skilled workers in the Third World.  Labor unions fought hard to see big economic gains for their industrial workers - only then to see industrial labor go "offshore" - forcing layoffs of industrial workers in the West.  Some workers have taken up service industries - but a the very low-paying end of the industry. Nothing of course can be done about the cheaper labor costs in Third World countries.  But focusing on high-tech manufacturing still gives the West some place in the manufacturing world.  A better option can be seen in the American South where labor unions have had only a very slight impact.  Even Japanese and German manufacturers have located their industries there where labor is abundant, well trained, and close to the market where the finished product (notably automobilies) are sold.  Wages are fair, affording the workers a middle class life, and supportive of a whole community's economy. The dollar, priding itself as the international "hard currency" of choice, is not very competitive because of this role it has chosen for itself.  It is way overpriced.  This makes foreign manufactured goods very cheap in the American market place - stimularing the manufacturing industries of other countries (notably in Asia).  But it kills any chance for American manufactures to be competitive internationally, or even domestically.  It also leads to governmental monetary strategies that are of very dubious help to a struggling American economy. The dollar needs to be freed up.  But to do so would be to unnerve the international financial world grown used to the dollar foundation that holds the whole thing together.  To untether the dollar would send shock waves through the global economy (as we have recently seen).  But the dollar cannot continue to play this role at the same time that America undertakes economic renewal. THE BRITISH VOTE TO LEAVE THE EU ("BREXIT") June 23, 2016 On June 23rd, 2016 the British went to the polls to decide on the matter of staying in or exiting the European Union (EU).  With over 30 million people or 72% of the eligible voters turning out to vote, the result was a narrow victory for the "exit" group:  52% to 48%.  Thus the British exit or "Brexit" commenced as a program of departure, step by step, from its long involvement in the European unity movement. Within Britain the results varied, with the English voting 53.4% to 46.6% in favor of the Brexit ... as did also Wales.  But Scotland (62% to 38%) and Northern Ireland (55.8% to 44.2%) voted to stay within the EU ... although they would now be required to follow the rest of Britain in the Brexit nonetheless.s  Conservative Party British Prime Minister, David Cameron (left), who was against leaving the EU, resigned as party head and British Prime Minister when he lost the referendum.  He was replaced by Theresa May ... who was willing to go with whatever decision the British made.   She did so virtually without opposition, as her major Conservative rivals simply stepped away from the contest for leadership. Go on to the next section:  Trump and the World   Miles H. Hodges