Big government has bailed out wide swaths of American capitalism in the wake of the pandemic like never before. Now it has every right to tax and regulate business in ways it didn't used to. Those were the views of former hedge fund manager and billionaire Leon Cooperman, who was interviewed earlier today at John Mauldin's Strategic Investment Conference by financial advisor David Bahnsen.

Bahnsen opted to question him at length about his exchange last fall with Massachusetts Sen. Elizabeth Warren. When Warren took the lead among contenders for the Democratic presidential nomination in Ocotber, Cooperman sent her a "respectful" letter sharing his views on inequality, a wealth tax and other issues. Warren never responded to Cooperman, who converted his hedge fund to a family office.

Instead, Warren attacked Cooperman in a tweet, blasting him for insider trading (he was charged but never convicted) and investing in Navient, a student loan company. After Cooperman discussed the incident later on CNBC and appeared to tear up, Warren mocked him openly, saying "boo hoo" at a campaign rally.

It appeared that Warren's contempt for Cooperman is reciprocal. "How do you tell when a politician is lying?" he asked. "When their lips move."

In principle, Cooperman agrees with Warren that the wealthy should pay more in taxes. He has signed the billionaire's pledge to give away over half his net worth and he mentioned several of his favorite charities during the webcast.

What he has complained about is the manner in which some politicians like Warren try to vilify wealth. "I work six months a year for the government," he said.

That rate of 50% or thereabouts didn't seem to bother him the way rates of 70% to 90% tossed around by some left-wing Democrats did. As it turned out, Warren's campaign faded fast after she struggled to credibly explain how she would finance her Medicare for All plan without raising taxes on the middle class.

For his part, Cooperman said he expects tax rates to increase as a result of all the pandemic-related federal debts and deficits. In his view, they will rise "fast" if former vice president Joe Biden is elected and more "slowly" if President Trump is re-elected.

He also said free market capitalism needs to change as the country moves to the left. Already, several congressmen are talking about requiring airlines to fly at no more than a 60% or 70% load factor.

Cooperman noted they can't make "any money" with that many empty seats. It's a complex situation that needs resolution, as it is questionable how many people will want to fly in the old, densified environment. Qantas Airlines said social distancing could result in a nine-fold increases in seat prices. Whatever happens, the compliance cost of new post-pandemic regulations is likely to raise prices and slow growth in a number of industries.

Faster GDP growth and more investment in education could go a ways toward reducing income inequality. The wealthy may indeed pay more in taxes, but simply soaking the rich isn't the answer, "You don't make poor people rich by making rich people poor," he said.

Voicing fears about many millennials’ infatuation with socialism, Cooperman said they need to be educated. He recalled a trip he made to Cuba three years ago and said it was sad to see how little economic progress the "hard-working" Cuban people had enjoyed under 60 years of communism.

Cooperman may well be right about the leftward drift in the political climate. Then again, one hasn't heard President Trump or Sen.Bernie Sanders rail very loudly about "rip-off drug prices" in the last two months as a distressed planet waits anxiously for a vaccine or antiviral medicine.

Turning to the equity market, Cooperman called it expensive. Until the recent downturn, American corporations' profit margins were at or near record levels. At some point, they are likely to revert toward the mean.

Moreover, the stock buyback era is mostly over, he predicted. Buybacks should "absolutely" not be outlawed but management needs to execute them more intelligently, he said. All too often, companies find themselves with excess cash near the end of a cycle, as in 2007 or 2018, and buy back their shares at lofty prices.

Another factor that is likely to put downward pressure on stock prices is an expected surge in equity issuance, as companies seek to replenish lost capital, Cooperman predicted. Since late March, the boom in new convertible bond issues is evidence of this.

Cooperman describes the equity market as "a two-tier market" characterized by Big Tech on one level and then everything else on another level. Big tech is nearly 25% of the market, he said, and if you throw in other tech companies, it's close to 30%.

Put a price-to-earnings multiple of 30 on that and a multiple of 15 on everything else and it averages out to about 19 or 20. That's right where the S&P 500 sits today. Cooperman said recently that 17 is a more reasonable multiple but added that equities weren't dramatically overvalued.

Bonds remain a much higher-risk asset class in his opinion. President Trump has called for negative interest rates, a policy that Cooperman said would be a "disaster." He cited the economies of Japan and Europe as evidence.

President Trump, in his view, displays a high degree of contempt for free markets and their ability to allocate resources through price discovery. "Six months ago, he was calling for lower oil prices; now he is calling for higher prices."

Cooperman believes the price of oil will return to $50 a barrel in two years.

When asked why equity prices declined so sharply in mid-March, Cooperman cited the unwinding of risk parity funds. "They operate at 10 times leverage," he noted, and deleveraging that much margin debt can cause a lot of problems. It obviously did for a few days two months ago when the S&P 500 cratered to below 2300.

Cooperman also noted that Berkshire Hathaway's Warren Buffett is sitting on $137 billion in cash. "When the greatest investor of my generation is having trouble figuring it out," that should make the rest of us cautious.