Shark Tank star Kevin O'Leary urged lawmakers to pass a new stimulus check bill in a recent interview with Yahoo Finance Live. The investor said frankly: "I'm not worried about business in America, I'm worried about people in America." He hoped to see individuals get the financial relief they need before corporations or even whole industries see massive bailouts.
"I'd much rather have a stimulus package that gives individual checks or extends unemployment benefits for the next 14 months," O'Leary said. "The idea that the government can pick winners and losers in business has clearly been demonstrated to be false." Later, O'Leary bluntly called on the government to "stop funding companies" and focus on supporting individual Americans instead. He joined the many economists who have criticized the Paycheck Protection Program (PPP) from the first stimulus bill, saying that about a third of it was "wasted" on fraudulent claims.
"Why do I want to bail out the shareholders of an airline when really it should go bankrupt?" O'Leary wondered. "The middle name of airlines is bankruptcy. They do it well, every seven to 10 years. Let them do it again, to downsize because I don't need them, the S&P doesn't need them. We don't need to fly everywhere anymore. We can do it on a Zoom call. I want to take care of the flight attendants and the people that used to work at those airlines, but that's just one sector of the economy."
Keeping on the airline point, O'Leary said that his businesses have all cut travel by at least 20 to 50 percent this year. To him, this is a natural economic process, and the airlines must suffer the consequences rather than getting contrived support from the U.S. government.
"We don't fly to see buyers anymore in our retail locations," he said. "We do it digitally. We're saving thousands of dollars in business travel. All of the tools we use like DocuSign, Crowdstrike, Shopify, these have made our businesses far more efficient. So there you have an opportunity, instead of making 15 percent pre-tax, you can make 18 percent."
"Do I want to buy into a movie theater chain? No, it's going to zero, but that's okay," he went on. "They're the buggy whips. Those are the old economy. We have a new digital economy coming that's going to be fantastic and that's why the market is hitting new highs. Winners, losers — that's capitalism, but people we got to care about."
In spite of the outcry from O'Leary and many others, the U.S. Congress is crawling towards a stimulus deal at a snail's pace. Many important aid programs will run out at the end of this year, so if lawmakers don't make a deal, Americans could go weeks or even months before the new Congress is able to pass a package in 2021.