US reindustrialization needs land and bank loans, not factory jobs
Three reasons to rebuild manufacturing: Smith lists geopolitics and defense (supply chains for defense and dual-use manufacturing that China cannot dominate or use for export-control pressure), economic growth (agglomeration and clustering effects alongside a strong service sector), and economic equality (well-paid blue-collar jobs for the middle class).
The jobs argument is a “dead end”: Smith and DeLong argue that AI-driven robotics will automate most manufacturing, so the era of mass semi-skilled factory employment is over. Jobs can still come indirectly through the “local multiplier”: automated factories bring money into a town and support local service jobs, provided the people who run the factories live nearby.
Security is the main driver: That leaves geopolitics as the core case. Smith calls Ukraine the one country he knows of that has successfully reindustrialized, building a drone and robotics industry out of wartime necessity. This is his assessment, not an established finding.
Two bottlenecks: Their “tentative conclusion” is that America lacks only two important things: land use and bank loans. Land use is what the permitting bill now moving through Congress is meant to address. On finance, Smith says bank lending matters for manufacturing and that the US struggles here compared with other countries.
The proposal: Smith suggests using America's “moribund megabanks” as pools of capital for reindustrialization by giving them selective exemptions from Dodd-Frank restrictions. He gives no detail yet and says more posts on bank finance will follow.
Why it matters for tech: If manufacturing scale-up depends on bank credit rather than equity, that bears on how defense, robotics and other hardware companies get financed once they move from venture funding to factories.
Summary of Noah Smith's written introduction to “Brad and Noah discuss the reindustrialization of America”, episode 65 of the Hexapodia podcast with economist Brad DeLong, published on NoahpinionDealroom has a profile for this one. Try Dealroom → by Noah SmithDealroom has a profile for this one. Try Dealroom → (13 November 2026). It covers the written post, not the full audio.
Read more: Noahpinion · cover image: Hexapodia episode video