Kevin O’Leary warned that ‘real chaos’ is ready to start for the ‘little guy’ in America — here’s what he means and why he’s so worked up
“We’ve got the Chips and Science Act — where’s that money going? Behemoth giant companies in the S&P 500,” he said. “The Inflation Reduction Act — another trillion [dollars], not even printed yet — [it’s] all going to the big guys.”
O’Leary pointed out that around 60% of jobs in America come from small businesses — but he believes they’ve been “given nothing” from the Biden-Harris administration in when compared with the giant corporations in the S&P 500.
The federal government has in fact launched a number of initiatives to support small businesses, including a loans and equity investment program, reforming the tax code and expanding access to federal small business programs. However, O’Leary points out that after the Fed’s 11 interest rate hikes since March 2022, it’s only become exponentially more expensive for businesses — and individuals — to borrow money.
“They’re struggling because the Fed has raised rates up to 5.5% in a matter of months,” he said. “You’re going to hear a lot of people crying about this in the next few months because they can’t borrow anything anymore and they can’t run their businesses.”
“During that period, people are very nervous about putting their money in the bank because if another one fails and you have your cash in there, right now you’re only guaranteed for $250,000,” he said, referring to the Federal Deposit Insurance Corporation (FDIC) guarantee to protect deposits of up to $250,000.
O’Leary’s fix for small businesses
The entrepreneur and television personality expressed his support for the Depositor Protection Act of 2023 — introduced by Senator Bill Hagerty (R-TN) in May — which would introduce a two-year transaction guarantee for non-interest-bearing accounts up to $100 million to protect commercial deposits.
Another similar bill — the Payroll Account Guarantee Act of 2023, proposed by Senator J.D. Vance (R-OH) in July — would expand Hagerty’s proposal to grant unlimited deposit insurance to all non-interest-bearing transaction accounts at credit unions and at banks with less than $225 billion in assets, in order to guarantee all operating, business and payroll accounts.
Aside from supporting new legislation, O’Leary also said he would extend the Employee Retention Credit — a refundable tax credit for businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic.
“It’s the only active program I know of that supports small business,” said O’Leary. “Meanwhile, we’re going to write $2 trillion to the big guys. That, in itself, is inflation. It seems unfair to me to support a behemoth company that has a lot of its employees outside of North America, and not my companies — small businesses.
“I’m asking myself: What are we doing for them — the 60% of jobs in America? Let’s wake up, smell the roses, realize they’re under tremendous pressure and they ARE our economy.”