How LA Is Quietly Becoming America's New Industrial Tech Hub

Joe Weisenthal (0:00)

Hey, Odd Lots listeners, the Odd Lots tour continues, and our next stop is in Chicago.

Tracy Alloway (0:04)

That's right, Joe and I will be at the City Winery Chicago on October 15th for a live Odd Lots recording. Tickets are on sale now at bloomberg.com/oddlots.

Joe Weisenthal (0:15)

And of course, a special thank you to Barclays for supporting Odd Lots Live.

Tracy Alloway (0:19)

So that's October 15th at City Winery in Chicago. Get your tickets now.

SPEAKER_3 (0:28)

Bloomberg Audio Studios, podcasts, radio, news.

Joe Weisenthal (0:43)

Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.

Tracy Alloway (0:47)

And I'm Tracy Alloway.

Joe Weisenthal (0:49)

So we're doing our live show here at the Vermont Theater in Hollywood. And one of the things that I've known very little about, but that I'm very excited to learn more about, is the attempts to turn this part of the country into a booming part of our industrial tech ecosystem.

Tracy Alloway (1:06)

Yeah. So we hear about reindustrialization efforts in America all the time, but what does it actually take to try to do that? And what are the companies actually doing in this space right now? We have two very interesting ones for you.

Joe Weisenthal (1:19)

Yes. I'm very excited. You're going to be hearing our chat with Chris Power. He is the founder of Hadrian, which is trying to build a new generation of factories, as well as Tom Mueller, founder of Impulse Space, also the first employee of SpaceX. We're going to learn about these attempts to reindustrialize Southern California. Take a listen.

Tracy Alloway (1:39)

All right. Well, thank you so much for coming on Odd Lots. Truly the perfect guess. I'm going to start with, I guess, the question I alluded to at the beginning, which is, what is your narrative for the hollowing out, to use a cliché, of US manufacturing? Why does it seem that we lost some sort of edge?

Chris, do you want to start?

Chris Power (2:01)

I do. And I think the first question is, do you want the accurate answer that's going to take three minutes or the political one?

Tracy Alloway (2:11)

How long does the political one take? Can't you do both?

Chris Power (2:15)

So, here's what happened. But it happens in context. So, every great power of all time does four very simple things.

They have some generative population function. They have the best industrial capacity. And then they win or prevent a war. And then, they get incredibly lazy, and they end up with a financial industry, and they offshore what made them successful in the first place. And by the way, this function is represented in the trade of the reserve currency of the world. So, the last three times this happened, the Netherlands ceded power to the British Empire, and the British Empire ceded power to the American Empire. And in each moment of industrial power being re-traded for financial power, you switch the reserve currency of the world. And the mistake that everyone makes, because you have four or five generations of softness, is that just because you have the reserve currency means you rule the world, and you forget the fact that the only reason you have the reserve currency is because you had the best shipbuilding capacity or manufacturing capacity. So this is also the founding story of Hadrian, which is if you track these things, roughly every 150 years, the reserve currency of the world changes.

The reason is because you think you're Mike Tyson in your prime, and the other guy or gal thinks you're Mike Tustin before the Buster Douglas fight. The pattern remains the same. So the founding story of Hadrian and the answer to your question is, the reason why it's important is because you've ultimately traded spreadsheet returns from a high affect and luxury of leaf society and if you've gotten that the world is real, and eventually that comes back to bite you.

Joe Weisenthal (4:18)

We just did an episode with Francis Fukuyama, and so we're very well acquainted with this fantasy that the world comes with-

Chris Power (4:26)

You're in the fourth turning.

Tracy Alloway (4:28)

Wait, wait, wait, just out of curiosity, before we go to Tom on that question, how often do you think about the Roman Empire? I'm assuming a lot.

Chris Power (4:38)

A lot in the sense that I think that America was- so everyone knows like what a weeaboo is. Yeah. What?

There's a lot of laughs. So America was founded by a lot of Roma boos, which is like obsessive Roman. So a lot of the fundamental infrastructure of the fourth estate and Congress was Roman. The flaw that happened with Rome is eventually the elites lost the capacity to connect with reality.