Billionaire Howard Marks Calls Out Trump And Harris: Policies 'Ignore Economic Reality' With Tariffs, Taxes And Price Controls
Billionaire investor Howard Marks isn’t holding back regarding the promises thrown around in the presidential race. He's got some sharp words for both Donald Trump and Kamala Harris.
“Like me, you’ve undoubtedly noticed that politicians ranging from former President Donald Trump and Vice President Harris to down-ballot candidates are back to making promises that ignore economic reality,” Marks wrote in his latest memo.
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Let's break it down, starting with Trump. Marks thinks Trump's plans for higher tariffs are off the mark. “Tariffs might stimulate U.S. output,” Marks said, but they also mean higher consumer prices. And Trump's idea to slap 10% duties on nearly all U.S. imports? “Equivalent to a price hike on average American consumers,” Marks warned.
He also doesn't buy into Trump's tax proposals. Trump wants to keep the corporate tax rate at 21% by extending the 2017 tax cuts. But according to Marks, this could blow up the national deficit by trillions. “The truth is, deficits encourage the economic growth that most people enjoy and spending more than the government takes in permits officials to give away ‘free stuff,’ thereby gaining votes,” Marks pointed out. But there's a catch. “Doing this perpetually requires ignoring the laws of economics,” he added.
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Then there's Kamala Harris. Marks isn't sold on her anti-price gouging policy. Harris wants to tackle grocery inflation, but Marks thinks she's missing the bigger picture. “There’s nothing wrong with trying to bring down the cost of necessities. However, the best way to do this is to encourage additions to supply,” Marks said. He's skeptical that price hikes are just about corporate greed. Instead, he believes they're tied to supply-demand issues, and simply mandating lower prices won't cut it. “Mandating lower prices is generally the least effective way to get them,” Marks explained.
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Marks also shot at Harris' housing plan, which proposes $25,000 in down payment assistance for first-time homebuyers. Sounds good, right? But Marks sees a problem. “The problem here is that giving a million would-be buyers $25,000 each, or $25 billion in all, would almost certainly result in an immediate increase in home prices,” he said. In other words, the plan might backfire by driving up prices instead of making homes more affordable.
In summary, Marks thinks both Trump and Harris are pushing ideas that don't align with economic reality. “Can it go on without end? We’ll see, but I would think not,” Marks concluded.
Howard Marks might be throwing shade at Trump's tariffs and Harris's price-gouging plans, but not everyone agrees. Some folks, like economist Isabella Weber, see Harris's anti-gouging push as a way to keep big companies in check when things get rough. Weber's thinking? With climate change and global tensions messing with supply chains, we will need these kinds of tools to stop companies from jacking up prices when it counts.
"Supply shocks in the future are likely to be sharper and more frequent," said Weber, an economist at the University of Massachusetts Amherst. "We need to equip the FTC and state attorneys general to deal with the coming supply shocks."
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