Why the UK's Infrastructure Paralysis Matters for US Stocks

Kahloon argues that the United States looks less like a shining city on a hill and more like a declining Britain with a couple of dynamic sectors, mostly AI. The similarities are obvious in the retrograde solutions both countries have lumbered into. Britain attacked immigrants and trade with Brexit, which is the equivalent of a high tariff regime. The US attacks immigrants with birthright citizenship fights and trade with tariff hikes.

Nations in decline, like people, tend to lash out at others rather than deal with their real problems. Neither immigrants nor trade explain Britain's inability to build high-speed rail. Neither explains California's either.

The simple read is that Britain is a warning. The better read is that the US faces the same structural forces: regulatory capture and cost overruns, driven by political dysfunction. The root cause is a combination of regulatory complexity, legal challenges, and political paralysis. In the UK, the 31,401-page environmental impact assessment for Hinkley Point C is a symptom. In the US, similar permitting processes for energy and infrastructure projects create years of delays and cost overruns. The result is slower growth and lower productivity.

US investors should monitor the progress of major infrastructure projects like California's high-speed rail, the permitting reform debate in Congress, and the cost of new nuclear plants. If the US follows the UK's path, the impact on economic growth and equity returns could be significant. The UK's Hinkley Point C plant, with its 31,401-page environmental assessment, is an example of what happens when regulation strangles progress.