Howard Marks worries about “rising tide of anti-capitalism”

Billionaire investor Howard Marks has said he is worried about rising sentiment in US politics.

“There is a rising tide of anti-capitalism and we should be concerned about it,” Oaktree Capital’s co-chair said Thursday on CNBC’s “Fast Money: Halftime Report”.

“We have a machine in this country that makes it succeed – based on democracy, our freedoms and also I think the economy and the way it works in a free market mode.”

Marks addressed the issue in its last note to customers. He is known for his prophetic notes, which warned of the 2008 financial crisis and the dot-com bubble of the late 1990s. He now predicts that the far left wing of the Democratic Party “will show itself strongly” during this period. of the 2020 primaries.

He denounced “growing anti-capitalist sentiment” and specifically challenged New York Representative Alexandria Ocasio-Cortez’s proposal to target the rich with a 70% marginal tax rate on income above $ 10 million.

Marks also criticized the wealth tax proposed by possible 2020 presidential candidate Senator Elizabeth Warren. The Massachusetts Democrat wants to impose a 2% tax each year on households with assets over $ 50 million. This rate would rise to 3 percent on households with assets over $ 1 billion.

“Americans generally accept the concept of graduated tax rates. But they should not be punitive and demotivating,” he wrote.

On CNBC, he said he understands income inequality has increased and something needs to be done about it. “The cost of capitalism is that there are people who are very successful and others who are not. And that is not desirable,” he said. “We should have a safety net for them. But I still think we shouldn’t throw the system away.”

Marks also accuses the Federal Reserve of exacerbating the wealth gap, but said the central bank did what it needed to do during the 2008 financial crisis. At the time, the Fed cut rates to interest near zero and took other steps to stabilize the economy. “A side effect of this was asset inflation, which of course only benefited people who owned assets and widened the equity chasm.”

Oaktree Capital had $ 124 billion in assets under management as of September. Marks has a net worth of $ 2 billion, according to Forbes.


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Estelle D. Eden

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