I try to steer clear of politics in my professional life. My clients and friends come from all sides, and markets have a way of humbling both parties equally. But as someone who’s spent decades studying how policy shapes markets, it’s hard not to notice how far both political parties have drifted from their economic roots.
The Republican Turn Toward Protectionism
Traditionally, Republicans stood for free trade and limited government intervention in markets. Today, that’s changing. The Supreme Court is now weighing the legality of sweeping tariff actions that give the executive branch unprecedented power to reshape trade policy—essentially imposing broad taxes on imported goods.
Tariffs are politically popular because they sound like a way to “bring jobs back,” but economically they’re just taxes on consumers and supply chains. They raise prices, invite retaliation abroad, and distort the competitive dynamics that make markets efficient. Economists from across the spectrum—Milton Friedman, Alan Blinder, and even the nonpartisan Congressional Budget Office—have all pointed out that tariffs almost always cost more jobs than they create.
The Democratic Turn Toward Command-Style Economics
On the other side of the aisle, New York City recently elected a self-described Socialist mayor who promises rent controls and even government-owned grocery stores. These ideas may sound compassionate, but decades of economic history show how such interventions often produce the opposite of their intended effect.
Rent control, for example, has been studied for nearly a century. The late economist Assar Lindbeck famously wrote that “rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.” By capping rents below market levels, cities reduce incentives for landlords to maintain or build new housing, leading to shortages, deterioration, and ultimately higher costs elsewhere. Government-run retail faces similar problems: inefficiency, politicized decision-making, and poor service.
When Intervention Becomes the Default
What’s remarkable isn’t that each party occasionally flirts with bad economics—it’s that both are now embracing it as a core strategy. The rhetoric is different, but the direction is the same: more government control, less trust in markets.
Free markets aren’t perfect, but they’re remarkably good at allocating resources, rewarding innovation, and adjusting to new realities. When governments—whether from the right or left—try to override those mechanisms, the results are predictable: inefficiency, higher costs, and slower growth.
A Return to Economic Common Sense
Markets don’t care whether interventions come wrapped in patriotic slogans or social justice language. The outcome looks the same: distortions, unintended consequences, and lost opportunity. As investors, we can’t afford to view these shifts through a partisan lens. We have to analyze them through the lens of incentives, trade-offs, and history.
Perhaps the most “radical” position today is simply believing that markets work—and that the laws of economics still apply, no matter who’s in charge.