Congress

Leon Cooperman on GameStop, the Fed and the Myth About the Rich and Taxes

Scott Mlyn | CNBC

My views on a variety of subjects:

GameStop frenzy

I am not critical of the GameStop speculators in the slightest.

I hope they understand they are speculating and in my opinion the stock price bears no relationship to the fundamental value of the business — I'm a fundamentalist and I believe that in the end water seeks its own level, and unless the speculators in GME are excellent traders, they are destined to lose money.

This is an opinion and I have never owned GME stock, so I'm no expert on the company or its prospects.

The Fed and markets

I think the speculation in the market we are seeing results in part from the zero interest rate policy being followed by the Fed and extremely loose fiscal policy. Add to that zero commissions and government rebate checks and one can appreciate what is going on.

In my view these policies have pulled demand forward and the market is overvalued and the process of returning to normal won't be pleasant. I hope I'm wrong because I tend to be long and not a big short seller.

David vs. Goliath

The press framing this as a battle between the wealthy and the less wealthy is bogus.

America is and should be a country that doesn't depreciate wealth, but the less-wealthy are striving to become wealthy.

The negative dialogue directed toward the wealthy by people like Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., and Congresswoman Alexandria Ocasio-Cortez, D-N.Y., are contributing to this divisiveness and it's neither appropriate nor justified.

The first question I ask is, how does one become wealthy — it seems to me it happens because you develop a product or service that people want and pay you for it. Of course, luck plays some role in the outcome, but I submit the world is better off because of Bill Gates, Jeff Bezos, Ken Langone, Bernie Marcus and a host of others.

Wealth and taxes

I get turned off when politicians use the word fair share as it relates to taxes.

They make it sound like wealthy people don't pay taxes.

I believe in the progressive income tax structure and that rich people should pay more. I have publicly stated that I'm prepared to work six months a year for the government and six months for myself — 50% tax rate.

Well, if you live in California, New Jersey, Connecticut or New York, you are well past that.

Raising taxes in any form above that is confiscatory and not productive. The wealth tax talk makes no sense as it hasn't worked in most countries and it will end up being a boon for gold as people try and hide their wealth.

What we have to do is agree as a nation what should the maximum tax be on the wealthy and size the government to the revenue yield that produces. Tax and spend has to stop!

Views on capitalism

I have chosen not to be involved in politics because both parties turn me off. The satirist Will Rogers said it well when he observed that if politicians delivered 10 % of what they promised there would be no need for heaven!

If you haven't figured it out by now let me admit to the fact that I believe in capitalism and I use two quotes from the great Sir Winston Churchill: "The main vice of capitalism is the uneven distribution of prosperity. The main vice of socialism is the equal distribution of misery." He also famously observed "you don't make poor people rich by making rich people poor."

I am willing to speak out because I believe in the words of Aristotle — tolerance and apathy are the last virtues of a society. We must do it in a respectful and peaceful manner.

Giving back

I have lived the American dream and I want to give others the opportunity to do so which is why my family and I established Cooperman College Scholars with a $50 million gift to provide a college education for academically qualified residents of Essex County, New York, principally youngsters of color who deserved a helping hand.

I also have signed on to the Buffett/Gates giving pledge and plan to give away 100% of my wealth upon my and my wife's passing. I get great pleasure in extracting profits from the market and taking those profits and recycling them into the system to help those in need. The private individual can do it better than the government.

Finally, I fervently believe in the words of our Pledge of Allegiance: I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

Let us all go forward as one with strength and honor!

Leon Cooperman is the chairman and CEO of Omega Advisors.

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