In his latest memo, More on Repealing the Laws of Economics, Howard Marks doubles down on a warning he first issued last year: government efforts to override basic economic principles are not only misguided, but dangerous. “The best known is the law of supply and demand,” he writes. “These and the rest of the rules are straightforward… they’re part of human nature.”
Marks begins with rent control. Intended to help tenants, it discourages landlords from maintaining properties and developers from building new ones. “Governments are choosing winners and losers,” he warns—rewarding existing tenants at the expense of everyone else. The result is stagnation: fewer new units, less mobility, and long-term harm to the housing market.
Then he turns to the California wildfire insurance crisis. After regulators capped premiums and banned the use of forward-looking models, insurers fled the market. “You can limit the price insurers can charge,” Marks writes, “but you can’t make them provide coverage at that price.” When disaster struck in 2025, fewer than 25% of homes were insured. The state’s attempt to protect consumers ultimately backfired—leaving thousands devastated and uninsured.
The memo’s final—and fiercest—section tackles tariffs. Marks acknowledges the goals are admirable: protecting manufacturing, securing supply chains, reducing trade deficits. But he argues tariffs distort incentives, reduce competition, and saddle consumers with higher prices. “Tariffs are like the wall,” he writes. “They impede foreign competition, enabling domestic manufacturers to sell their products even if they represent an inferior bargain.”
Marks cites Niall Ferguson, who reminds us that industrial decline is a natural byproduct of prosperity. The U.S. can’t “go back to the 1950s,” Marks agrees, and trying to do so through protectionism is futile. “A country cannot pull ahead of others in terms of per capita income and expect to continue as mainly a manufacturing economy.”
He closes with two ticking time bombs: America’s unsustainable fiscal deficits and the looming insolvency of Social Security. Politicians on both sides “spending without regard to the deficit,” Marks laments. “Few people in Washington genuinely pursue a solution.” As for Social Security? “That year is 2035,” he warns. “Nothing in this paragraph is conjecture.”
The bottom line: free markets are imperfect, but government interventions often create bigger problems than they solve. “There can be no solution that gives everyone what they want,” Marks concludes. “All things considered… the laws of economics lead to the best solutions that can be attained.”
You can find the entire memo here:
Howard Marks Memo – More on Repealing the Laws of Economics
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