In a scathing critique, Kevin O’Leary, Chairman of O’Leary Ventures, has unleashed a dire prediction about the impending economic turmoil facing small businesses due to the Biden administration’s policy choices.
Appearing on “Fox & Friends,” the “Shark Tank” star pulled no punches in his assessment of the coming chaos. O’Leary pinpointed the month of September as the storm’s center, driven by skyrocketing interest rates that will crush businesses already grappling with challenges.
O’Leary spotlighted what he called the uneven distribution of financial aid. “We’ve got the CHIPS and Science Act. Where’s that money going? Behemoth giant companies in the S&P 500,” he exclaimed. His reference to the “Inflation Reduction Act,” more widely known as Biden’s Schumer-Manchin tax bill, raised questions about priorities, as billions flow toward the corporate giants, leaving small businesses struggling for a lifeline.
“Everyone knows the S&P 500 is the biggest index in the world,” O’Leary added, “but 60% of America is small business. That’s where 60% of the jobs come from. We’ve given nothing to them.”
O’Leary’s warnings align with recent trends. Despite a temporary respite from soaring inflation, he has repeatedly flagged a “crisis emerging” for small American businesses. He ventured to Capitol Hill to deliver this message directly to legislators, stressing the urgency of the matter.
“The crisis is emerging,” O’Leary emphasized. “I’m talking about companies with five to 500 employees, which represent over 60% of our economy.”
O’Leary did not hold back when it came to the financial health of these enterprises. “If you’re in the S&P 500, you have no trouble financing your business,” he noted, drawing a stark contrast with the plight of small businesses. The surge in capital costs could prove crippling for them.
“Small business owners will be cut off at the regional bank level,” O’Leary warned. “The rates they pay for money have gone from 4-5% to 11-17%. You’re going to hear a lot of people crying about this in the next few months.”
As O’Leary dissected the situation, he projected a bleak future for regional banks. Their numbers are expected to dwindle, reducing options for Americans to park their money safely. The uncertainty stemming from this could further rattle an already unsettled market.
O’Leary’s remedy for this economic upheaval includes extending the employee retention credit for small businesses. His solution aims to bolster those who invested in their workforce during the pandemic, ensuring they remain resilient. This, he believes, is a practical step toward supporting the backbone of the American economy.
While some reports suggest small business optimism is on the rise, O’Leary brushed it aside as inconsequential. Drawing from his conversations with real-world business leaders, he countered that the true sentiment is far from rosy.
“I’m dealing with reality,” O’Leary concluded. As the Biden administration treads a contentious path through the economic landscape, the concerns of small business owners continue to be a focal point of contention.
