Inside the techno-industrial policy playbook: shipbuilding, critical minerals, and restoring American manufacturing

maestro. Yeah, we really got to get on, you know, Tik Tok, Instagram, whatever. Wherever these sound effects are coming from, we need to bring him into the show because the soundboard has been a delightful upgrade. Uh, and we have our first guest of the show. Welcome to the stream, Kelvin. How you doing?

Boom, gentlemen. Good to see you guys. What's going on? Great to have you. Music. Yeah. Oh, yeah. We're we're we're big fans of the soundboard. Uh expect the unexpected during this interview. It probably be the the loudest, most uh uh interruption riddled podcast you ever do. Um but it's fun.

Uh can you anyway, can you give us a little bit of a uh backstory on you and specifically the announcement today? Uh some of the some of the work you've published and kind of just give us the high level overview. 100%. Uh some Kelvin uh kind of prototypical Silicon Valley tech bro.

uh dropped out of Princeton uh moved out to the Bay Area, was a founding engineer at two companies and then uh a few years ago just started reading about industrial policy and the history of technological progress in the states and um recognized that we were in the moment of uh intense technical decline and that this was in large part facilitated by bad policy choices and so ended up moving to DC got to meet people like Santi and uh we released this playbook after six months of uh long hard work uh and it's a recognition of the fact that technustrial decline is a policy choice and that we are um in a moment where uh with the rise of China with the stagnating uh industrial base uh there are intense changes that need to be made to the existing system and uh these this playbook uh has 27 very concrete ideas for how to change things across the industrial base across the national security apparatus and in the ways the government funds frontier innovation.

Cool. I want to go into the playbook, but first give us a lay of the land. FAI, IFP, what are these organizations, what are their goals, how are they funded, their nonprofits. Can you break all that down and then we'll go into the actual playbook? 100%. So there's uh four institutions involved in this project.

Uh FAI, IFP, American Compass, and NIA. A lot of uh acronyms here. So FAI is the foundation for American innovation.

the center right uh tech policy think tank focused on um tech policy emerging technologies uh industrial policy um IFP is a uh nonpartisan think tank focus on a lot of the similar topics um also around um particularly around meta science uh and and energy as well and then um American compass is more of a new right economic think tank they do a lot of other stuff beyond just industrial policies and family policy um uh workforce policy etc.

And then NIA uh is the new American Industrial Alliance uh focused on a new trade group started by a bunch of uh really sharp builders uh focused on bringing the best of Silicon Valley uh industrialists to Washington DC.

Um so this project is kind of a merger of all these different circles of uh the new right conservative folks all the way to your Silicon Valley uh builders. Got it. So we uh we talked to Katherryn Bole yesterday about American Dynamism broadly.

We've talked to Chris Power about Hrian and building manufacturing in the United States and some of these themes, but uh what are some of the more concrete steps that you're advocating for on the road to reindustrialization, technoindustrialization? What does that actually mean? Yeah.

So, uh this was born out of a kind of growing bipartisan consensus over the past uh two administrations that something like some things deep need to change.

Uh and the B administration really took a pillar approach where they looked at things like chips, energy, uh manufacturing and past really largecale subsidy programs that were have been like unseen in generations.

Um and the Trump administration has recognized that there's uh all these systemic barriers to industrialization beyond just subsidies, things like trade policy, non non-trade barriers.

Um and so where we wanted to um fit into the conversation is that is recognizing that there is uh in all these different critical industries whether it's critical minerals or uh hypersonic missiles all the way to um uh biotech manufacturing there are uh unique industry nuances that prevent uh more things being built faster and cheaper.

And so, um, the goal with this playbook was to really channel this newfound energy on both sides of the aisle in advancing these issues and elevate folks who could, uh, write up very specific policy proposals along these lines, uh, to advance specific areas.

So, the way we categorize the playbook is we have three sections, industrial power, national security, and frontier innovation.

And we have uh senior domain experts right on uh each individual uh uh piece of this of this pie uh with proposals spanning from developing hypersonics testing infrastructure to demand side support for critical minerals production to uh how does the Navy improve its uh ship streamline its uh design of ships.

Um there's all these really wonky things that this playbook gets into uh in each of these specific categories. Yeah. Do you have a like a an overarching theory around uh tariff policy versus subsidization of American industrialization versus kind of the Doge stuff which is like do more with less efficiencydriven?

These three pillars seem very different very they're typically advocated by uh very different political groups. We're kind of seeing all three happen right now. Um, do you think that all three of those are equal tools in the tool chest or um, are you advocating for leaning one way or the other?

Yeah, this is what we're most proudest of for this playbook is that it is a synthesis of all these ideas and it's a recognition that for all these deeply uh, deeply important questions. Uh, you just need an all of the above approach. There is no one silver bullet.

um the things that are required to restore American ship building are going to be slightly different than things uh required to uh do a more broad-based re-industrialization movement. But it's a recognition that uh all for all these different topics.

Uh there's all these things from regulatory fixes to uh state capacity fixes to subsidies. They're all critically important. On ship building, can you like give us a concrete example of of of what the playbook looks like?

Because I feel like ship building is a pretty uh you can kind of wrap your hands around it like it's a pretty uh pretty simple thing to understand. We make a certain amount of ships, we want to make more. Um but what are all the steps that lead to actually increasing ship building capacity? Yeah.

So uh ship building uh in America is uh in a in a dire need of fix. We produce uh uh China produces 230 times more ship tunners than the United States. Um this is due to a lot of different factors.

everything from uh constantly changing requirements from the Navy to a lack of workforce to a lack of automation in our shipyards compared to other countries.

And so uh the particular proposal that uh Brian Potter and Austin Bernon vote for our playbook was around streamlining the way that Navy actually designs its requirements for ships and the way that Navy um actually goes about planning the design of um of certain naval vessels.

And it gets pretty into the weeds on those topics. And really this is um you know this is not a comprehensive plan to restore American ship building but more of a um of a specific deep dive into one particular underrated uh aspect of the problem that policy makers may not realize.

And so there's a great bill out there called the ships act um which gets into a bit of more of a of a broad-based plan. And so the goal with this particular proposal was how do we complement the existing discourse with things that are more a bit more in the weeds that people aren't paying attention to.

Can you talk about some historical precedent where America was maybe behind in in certain areas and uh managed to turn it around? Like basically like obviously you lay out a bunch of um very kind of proactive solutions for a variety of these issues.

But uh I think it'd be helpful to understand at at what points throughout history maybe uh we recognized that big big changes were needed from an industrial policy standpoint and we actually effectively made those changes. Yeah. The Cold War is the best example of this, right?

You had um a space race where uh the US public and our intelligence agencies were shocked when Russia launched Sputnik. Um it was really a it's really hard to um just fully articulate how deep this shocked the American psyche and how fast we got uh our [ __ ] together.

The in the ma in a matter of less than a decade we directed 400,000 people, 20,000 companies and 4. 4% of the overall federal budget towards the Apollo missions. Uh, and we went from being uh, lagards in engine technology, missile technology, space technology to lay getting to the moon first.

Um, is that part of the challenge though now is that we don't have sort of a stunning visual of industrial decline.

It's sort of this sort of slower insiduous sort of process that's been happening that we feel in different ways, but it's it it doesn't strike uh you know, fear into the hearts of Americans in the way that that Sputnik did. That's 100% a challenge.

Um you know, there's some some people who don't believe America will really get serious until there's a Taiwan scenario.

Um but you know there's uh there have been instances over the there's been flash points over the past few years Ukraine um COVID uh uh October 7th where people have realized actually like uh the lack of a uh of a robust defense supply chain the lack of the ability to make basic things like medical masks um are problems that affect us today.

And so that's where the work you guys are doing is so important.

That's where the work of these think tanks and other folks like Katherine Bole um the whole American dynamism movement uh the more the more we talk about these things the more the more I think uh people recognize the seriousness by which we need to we need to take these issues.

Did you ever explore the idea of uh I don't know what exactly how this would like get implemented but some sort of incentive for uh American investors to focus on re-industrialization. We were kicking around this idea of like the uh the carried interest tax was kind of up in the air.

Maybe that would hurt private equity firms and venture capital firms. Um but what if carried interest that that deduction didn't exist for investing outside of America. But if you invest in America, all of a sudden you get a much more favorable tax treatment. Something along those lines.

um or even just anything like we've seen the American Dynamism movement take hold in the venture community, but we haven't heard nearly as much on the private equity side. That seems like the private equity firms are still just kind of dollars and cents maxing.

Um but what what do you do do you think there's any uh moves that could uh kind of lead to more just decentralized American capital driving re-industrialization? No, that's such a fantastic question. Uh there there are so many levers. It's it's it'll take a long time to go through all of them.

But uh Julius Crin of American Affairs wrote a great piece for us on um uh on that very question of how do you get large scale capital uh uh institutions to invest in industrial finance.

Um there's also um you know Sam Hammond wrote a piece on utilizing the SBA's authorities to incentivize uh investing in small mediumsiz manufacturers. Um you know the one one of the greatest strengths of America is that we have uh the world's strongest entrepreneurial base.

We have folks like Jeff Bezos, Elon Musk and we also have um a state that is capable of doing a lot of things right Tesla being a great Tesla and SpaceX being the prime examples of what can happen when you combine uh effective industrial policy um effective tools of of statecraft with uh amazing entrepreneurs who are building the future.

Yeah. Interesting. some sort of do you have any follows? Yeah, I'm curious as you guys were putting this together, uh, what kind of announcements or policies maybe sort of shifted your priorities because over the last call it six weeks there's been a lot of announcements.

You know, on Sunday, uh, we had 100% tariffs on the 3D chess board has been flipped. Yeah, we're just flipping the board constantly. But no, I'm curious.

Was was there anything that you were, you know, wanting to to to write about or include in here, but you felt like already had enough momentum or or kind of coverage from existing uh policies?

You know, to give the Trump administration credit, like we we had it we had a few things uh written up around uh defense procurement reform, energy reform where they put out some EOS and we were like, "Oh man, we got to we'd add some more things.

" Uh it's a it's been a very fastmoving administration, but uh you know with you brought up liberation day like the way that we view um tariffs and uh like every every each of these uh four uh think tank partners have their own uh opinions, but uh we're all in agreement that uh tariffs alone are not enough, right?

These are um it's a it's a stick. Uh but if you actually want to be serious about doing the very specific things like critical mineral production or ship building or whatever um there's a whole host of unique tools you need to apply to that particular problem. So that's really what this playbook is trying to provide.

Are there any lessons that you think America can learn from how China does industrial policy? We've seen um you know what 50 years of investing in semiconductors over in China uh in the midst of never really being on the leading edge there. Um but now yeah even around planning, right?

So they plan in these sort of fiveyear cycles, right? You know, let's make a fiveyear plan and another five-year plan and they just sort of compound. I know I know we're adversaries, but like what can America learn from China on the industrial policy front?

Yeah, it's a fantastic question and I mean to your point, there's been a lot of waste over there, right? You have all these statebacked private equity firms that uh kind of are just black holes for for capital. Uh you've got I mean they use a bunch of slave labor which helps drive down um uh industrial costs.

Um yeah, it's uh yet they do a lot of things that are really effective like uh you know I think a lot of narratives around know China just a copycat or China is just um like using like like uh using distilled models to to uh to to produce beef. It's it's all to cope.

I mean uh you know they're leading in electric vehicles. BYD is an absolute beast. Um drones um critical minerals like these are these are real advantages and the number one thing I think is just uh we should be taking things as seriously as they are.

like Chinese leaders routinely come out, not just Xi Jinping and the top uh level CCP brass, but even like the CIA equivalent uh in China and their like internal think tanks, they're constantly producing essays and um and and giving speeches on how the foundation for world power is uh industrial power and technological power.

Um they view this as they view the lack of technology as the reason they suffered the century of humiliation. Um and so they are deeply serious uh and throwing the entire state behind um developing the uh the future of um all these different emerging technologies.

So you know the the thing that we can learn is just the degree of seriousness by which there the political classes is taking. That's a really good answer. Yeah. Thank you. Um yeah well we'll move on and we'll let you get back to your day but thank you so much for hopping on. This is really interesting. Yeah.

I'm excited to to fully read the report myself and uh yeah looking forward to let's have you back on in the near future. Yeah. Yeah. We'll talk to you soon. Cheers. Thanks so much. Uh and next up, we're continuing our deep dive into the technoindustrialist uh play policy playbook.

Um uh if you haven't had a chance to go uh see it, it's all over X today. Um you can find rebuilding tech. Rebuilding. te. What a good domain. www. rebuilding. te. Yeah. So Santi Ruiz