Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
Published on October 10, 2012 By Draginol In Business

This week, the hard hitting reporters from Gawker bring you:

“The CEO Who Built Himself America’s Largest House Just Threatened to Fire His Employees if Obama’s Elected” [actual headline]

http://gawker.com/5950189/the-ceo-who-built-himself-americas-largest-house-just-threatened-to-fire-his-employees-if-obamas-elected

This bad BAD man also has a LARGE house. What a monster.

[editor’s note: Sure, we could have simply stated that this man sent an email to his employees explaining that if the company’s taxes go up that it will reduce working capital which could result in job cuts but we’re all about the page views]

UPDATE:

Now that everyone has finished writing their hate male to this guy we have the actual email. Unfortunately, it’s long and nuanced so we have taken the liberty of highlighting the parts that should make you very VERY mad.

“Huge mansion. Huge fortune. Profitable company. What could David Siegal have to complain about? Well, the demonization of the 1% by Barack Obama, for one thing. This truly amazing email went out to all Westgate employees yesterday. Bolding is ours.”

Subject: Message from David Siegel
Date:Mon, 08 Oct 2012 13:58:05 -0400 (EDT)
From: [David Siegel]
To: [All employees]

To All My Valued Employees,

As most of you know our company, Westgate Resorts, has continued to succeed in spite of a very dismal economy. There is no question that the economy has changed for the worse and we have not seen any improvement over the past four years. In spite of all of the challenges we have faced, the good news is this: The economy doesn't currently pose a threat to your job. What does threaten your job however, is another 4 years of the same Presidential administration. Of course, as your employer, I can't tell you whom to vote for, and I certainly wouldn't interfere with your right to vote for whomever you choose. In fact, I encourage you to vote for whomever you think will serve your interests the best.

However, let me share a few facts that might help you decide what is in your best interest.The current administration and members of the press have perpetuated an environment that casts employers against employees. They want you to believe that we live in a class system where the rich get richer, the poor get poorer. They label us the "1%" and imply that we are somehow immune to the challenges that face our country. This could not be further from the truth. Sure, you may have heard about the big home that I'm building. I'm sure many people think that I live a privileged life. However, what you don't see or hear is the true story behind any success that I have achieved.

I started this company over 42 years ago. At that time, I lived in a very modest home. I converted my garage into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you. We didn't eat in fancy restaurants or take expensive vacations because every dollar I made went back into this company. I drove an old used car, and often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business — hard work, discipline, and sacrifice. Meanwhile, many of my friends got regular jobs. They worked 40 hours a week and made a nice income, and they spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into this business —-with a vision that eventually, some day, I too, will be able to afford to buy whatever I wanted. Even to this day, every dime I earn goes back into this company. Over the past four years I have had to stop building my dream house, cut back on all of my expenses, and take my kids out of private schools simply to keep this company strong and to keep you employed.

Just think about this – most of you arrive at work in the morning and leave that afternoon and the rest of your time is yours to do as you please. But not me- there is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have that freedom. I eat, live, and breathe this company every minute of the day, every day of the week. There is no rest. There is no weekend. There is no happy hour. I know many of you work hard and do a great job, but I'm the one who has to sign every check, pay every expense, and make sure that this company continues to succeed. Unfortunately, what most people see is the nice house and the lavish lifestyle. What the press certainly does not want you to see, is the true story of the hard work and sacrifices I've made.

Now, the economy is falling apart and people like me who made all the right decisions and invested in themselves are being forced to bail out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed 42 years of my life for. Yes, business ownership has its benefits, but the price I've paid is steep and not without wounds. Unfortunately, the costs of running a business have gotten out of control, and let me tell you why: We are being taxed to death and the government thinks we don't pay enough. We pay state taxes, federal taxes, property taxes, sales and use taxes, payroll taxes, workers compensation taxes and unemployment taxes. I even have to hire an entire department to manage all these taxes. The question I have is this: Who is really stimulating the economy? Is it the Government that wants to take money from those who have earned it and give it to those who have not, or is it people like me who built a company out of his garage and directly employs over 7000 people and hosts over 3 million people per year with a great vacation?

Obviously, our present government believes that taking my money is the right economic stimulus for this country. The fact is, if I deducted 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? Who wants to get rewarded only 50% of their hard work? Well, that's what happens to me.

Here is what most people don't understand and the press and our Government has chosen to ignore – to stimulate the economy you need to stimulate what runs the economy. Instead of raising my taxes and depositing that money into the Washington black-hole, let me spend it on growing the company, hire more employees, and generate substantial economic growth. My employees will enjoy the wealth of that tax cut in the form of promotions and better salaries. But that is not what our current Government wants you to believe. They want you to believe that it somehow makes sense to take more from those who create wealth and give it to those who do not, and somehow our economy will improve. They don't want you to know that the "1%", as they like to label us, pay more than 31% of all the taxes in this country. Thomas Jefferson, the author of our great Constitution, once said, "democracy" will cease to exist when you take away from those who are willing to work and give to those who would not."

Business is at the heart of America and always has been. To restart it, you must stimulate business, not kill it. However, the power brokers in Washington believe redistributing wealth is the essential driver of the American economic engine. Nothing could be further from the truth and this is the type of change they want.

So where am I going with all this? It's quite simple. If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company. Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone.

So, when you make your decision to vote, ask yourself, which candidate understands the economics of business ownership and who doesn't? Whose policies will endanger your job? Answer those questions and you should know who might be the one capable of protecting and saving your job. While the media wants to tell you to believe the "1 percenters" are bad, I'm telling you they are not. They create most of the jobs. If you lose your job, it won't be at the hands of the "1%"; it will be at the hands of a political hurricane that swept through this country.

You see, I can no longer support a system that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities. If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about.

Signed, your boss,

David Siegel

COMING UP NEXT on “THE BAD BAD CEO”

The BAD BAD CEO who went on a VACATION to a FOREIGN COUNTRY while raising insurance premiums on his employees.

Remember readers: Rich, Successful people are BAD people and we will continue to dig deep to show you just how terrible they are. How dare people start their own businesses and believe they have any rights to express their opinions.  We will continue our hard-hitting reporting that we expect will damage those businesses through ill-informed boycotts by making sensational, irrelevant headlines.


Comments (Page 2)
on Oct 10, 2012

Getting back to the OP, wouldn't it be cool if we lived in a society where the perspective of a powerful businessman could be expressed in a public forum and discussed and debated. I would call it a democracy. Not sure what we have. Maybe a mediacracy? A partisancracy? Ragecracy? 

People like David here should be free to tell people how taxes are affecting their business. I would also like it if people that are benefiting from social programs could respond and we could have a debate about what is fair and how we can live together efficiently. I don't think humanity quite ready for that kind of discussion yet. 

on Oct 10, 2012

Let's stay on target, this isn't about LGBT or religion or Republicans vs. Democrats.

Having recently had my own emails taken out of context and used to smear me as some sort of monster, I'm already fairly skeptical about the "news" that comes from Gawker sites these days.

And in this case, their coverage was ridiculously biased.

Let's use Stardock and Fallen Enchantress as an example:

Let's say Stardock was a normal game studio where its income was dependent on the sales of its games.

So Stardock releases FE in 2012 and most of its revenue is made this year.  Let's say it shows a "profit" of $5 million for 2012.  Now, the government (state and federal and local) are going to take around $2 million of that as-is.  However, if the Bush tax cuts go away plus with the new Obamacare costs plus the tax increase on "millionaires" (and they say corporations aren't people..) you could see that amount go from $2 million to $2.5 million easily.

Now, let's say the next game isn't until 2014.  That means that money has to be lived off of until then.  That extra half million in taxes might result in a lost job (and certainly fewer new hires).  

Pointing that out isn't a threat. That's just economic reality.

Now, because the games aren't our main business here, this is just an academic exercise. But it still illustrates the point that the CEO in the story was trying to make to his employees.

Instead, the Gawker story talks about his big house (as if that is somehow relevant).

on Oct 10, 2012

The base of the problem seems to lay more in the lap of the convoluted legal and tax statuses of businesses in the country.  When its easier to streamline things by considering corporations "persons" legally, or start taxing small businesses based on their owner's individual income rate, it throws a wrench in the discussion over taxes and jobs.  Too bad things are (and have been for quite a few years) too partisan and too full of lobbyists to actually reform those things.

Both sides are playing the class warfare card on the issue, Obama more outright, Romney with his "rich abusing loopholes."  Its for votes.  Its the same thing as the almost Jingoistic banter that starts getting thrown out about China now, both sides doing it, and it's just to get a particular brand of voter.  I think whoever gets elected is going to have to do some major concessions in Asia to apologize for all the economic saber rattling.

Per the CEO's letter, I think he stepped in it, but the headline is sensationalized.  Writing a letter tying your employee's job security to performing actions outside the business probably isn't the best idea.  The letter reminds me a bit of my old church was handing out leaflets that said "We can't tell you who to vote for" (I guess they didn't want to lose their nonprofit status) "But here is who God wants you to pick based on these 5 issues."  In either case, when you realize that most of the promises are smoke and mirrors, and that the president rarely even has the legal means to do what they say in the campaign (on the first day I'm going to . . .), to say nothing about getting their changes through a Senate and Congress that refuses to let the other side "win points" regardless of how good it is for the country . . .well either letter seems silly.  Especially when both candidates, as Seanw3 pointed out, are promising to raise the CEO's taxes, albeit in different ways. Additionally, by reinforcing the "us vs them" mentality and labeling people as productive vs unproductive, and seeming to put his employees in the latter category didn't help.

So no, I don't think he's a bad guy . .just that the letter came off as combative to his own workers, and a bit coercive.  In short, just a person venting some frustration.  Everyone does it.  Doesn't make me think he's the nicest person, from this small sample, but it doesn't make him an evil dictator. But I guess I'm still capable of seeing shades of gray, which I like to think is a lot more common than its cast out to be.

on Oct 10, 2012

Is anybody actually happy with how Obama has ran the country?  Is anybody excited to reelect him because of the great things he's going to do, or are they just in it to not have the other guy in?  I really don't know.  I've never heard anyone say that Obama has done a good job.

on Oct 10, 2012

I would say at best Obama didn't screw anything major up. These days that is a passing grade. It's the evil you know. After all, we don't want unemployment to go above 8%. That number decides the whole fate of the country! (Satire there at the end)

It is sad that journalism is not more objective. I for one like hearing the perspective of such a CEO on the economy and believe it or not, his opinion sways my opinion just as much as any other person's. The real problem is that I want to hire a fiscally conservative, genius economist, trustworthy, agnostic, but all we have are politicians to vote for. 

As far as his memo, he has been around long enough to know the risk of such statements. I don't blame him for his words, but the failure to see the next 3 moves after the memo was a mistake I don't forgive him. As a CEO, you need to play everything like a chess game and he just wasted a pawn for no reason. Cutthroat people need to wear better throat protection. 

on Oct 10, 2012

Republicans are anti LGBT rights and they champion teaching creationism among other things, I will never vote for a party like that, ever. I live in Kansas, I know damn well what these Republicans are like, and no matter what other ideas they have, as long as they are filled with these types, I will never vote for them.

The leftist media makes the claims above, but lets look at reality. First of all, "teaching creationism" is NOT a republican thing and republicans officially reject it (both individually and as a whole). To even make such a claim is absurd, its completely baseless.

Now, the anti LGBT thing is NOT baseless. It is TRUE that there are many amongst the republicans like that (although the leftist media would have you believe they want them in death camps).
But there are also as many amongst the dems who are the same. Obama was pro gay marriage as a senator, then AGAINST it as a president (when he had the power to do something about it) except for just now when he is on the way out and lost the senate he is for it again. Flip flopping and paying lip service without ever doing anything.
Its not just obama its the whole dem party. Having a supermajority the democrats nationlized healthcare, auto industry, student loans, and did the bailouts... but what they DIDN'T do was address LGBT issues.
And let me remind you don't ask don't tell was passed by the democrats to begin with.

Finally, "the end justifies the means" mentality of the democrats is causing them to disassemble all the PROTECTIONS that have kept our government too weak to oppress us. Bush said he doesn't believe atheists are capable of being true patriots nor citizens but he has never acted upon it... why? Limitations to his power and perhaps his belief in the constitution. But if we disassemble that like the dems want then what happens when you get someone who really hates LGBT, atheists, etc in power?

Lets look at the greatest conservative icon, Reagan. Early in his career a bipartisan effort was on its way make it illegal for gays to be schoolteachers. It had huge public support and he was warned to stay away. But he didn't, he stepped up and said "this is wrong". And he spoke about human rights and equality and the constitution and convinced people and the measure failed. And LGBT organizations attribute him with stopping it.

on Oct 10, 2012

Well, if he decided to fulfill his threat, the demand for hotels wouldn't go away.  These folks would still have jobs, as someone would fill that demand- though there might be an adjustment period.  You might even have more demand, if the taxes had a proper redistributive effect- as income given to the lower classes tends to have a higher consumption rate (the theory of money velocity), and that consumed money would end up in the hands of the businesses again.

 

Also, he has the freedom to step back, the same way Brad did (Remember that Steve jobs article?)   He just chooses not to, unless someone he is truly addicted to work, which would be an addiction not a choice.  (and a tough one for some folks to break)

 

Also, new taxes would not force him to reduce his business, that's just a scare tactic, and if he did, again, someone else would fill the slack.  He could choose to do it, but again that would be his choice, he wouldn't be forced to do it.  And again, it's not like hotels are an inelastic good.  The demand for goods and services won't go away just because one supplier goes away.   I seriously doubt his business is run on a shoestring and this would make him unprofitable.  We'd be hearing about hotels going under left and right if this was common.

 

Fact is, folks with power will use it on others.  This is why you're seeing the Red Lobster/Longhorn folks just work everyone 29 hours to avoid full-time workers.   Companies will do everything they can to maximize their profits, even if it's not in the best interests of society.  It isn't always in the best interests of society for companies to maximize their profits.  This is why you need a strong government to protect society from the excesses of the market.  

 

yes, folks like David here are free to state how they claim taxes are impacting them.  I'm free to say I don't believe a word of it.  Also, consumers have a right to hear statements like these , and maybe choose another hotel chain instead if they feel strongly enough  (and this is the best countermeasure to threats like these, but consumers don't organize and get angry enough in this society to force change)

 

And to answer one other question: I am very happy with Obama.  He prevented a 2nd great depression, he fixed that horrible don't ask don't tell, he started us on the road away from inefficient and stupid employer-based healthcare, and I think he's been great on foreign policy.  He's the first guy I've wanted to vote FOR since Bob Dole in 96.  (The Republicans lost me after 9/11)

 

 

I'm sure David thinks he's getting an unfair shake.  Everyone does.  Some people just get it worse than others.

 

on Oct 10, 2012

Let's get back on track.  Brad, aren't you going to the Caribbean on October 23 after FE releases?

on Oct 10, 2012

Frogboy
Let's stay on target, this isn't about LGBT or religion or Republicans vs. Democrats.

Ah, sorry. I already wrote up a response before seeing this... Well I am willing to discuss this elsewhere if you insist.

But I think this is exactly about those things. You have liberal media spreading lies about a "conservative" (since when is sound fiscal policy being conservative? what the hell happened to the parties?) CEO to further their agenda.

And the actual content of that CEO's letter shows how full of it they are.

Both sides are playing the class warfare card on the issue

There are way more than two sides here.

on Oct 10, 2012

If any new taxes are levied on me [insert threat]

This is the actual content of merit and speaks volumes about where the real entitlement mentality exists.

You are ridiculous if your position is that productivity and profits to the wealthy over the past 30 years justify a decrease in taxes after watching the results from 2004 until now.

Dissipate fractional reserve currency on schedule or else...

on Oct 10, 2012

LORD-ORION
If any new taxes are levied on me [insert threat]


This is the actual content of merit and speaks volumes about where the real entitlement mentality exists.

You are ridiculous if your position is that productivity and profits to the wealthy over the past 30 years justify a decrease in taxes after watching the results from 2004 until now.

Dissipate fractional reserve currency on schedule or else...

Your [insert threat] = "I will have no choice but to reduce the size of this company."

So let's extrapolate...

"If my taxes go up I will have no choice but to live in a smaller house" ALARUM! I AM THREATENING THE HOUSING INDUSTRY!

"If I go bankrupt, I will have no choice but to shut down the business" THREATS THREATS TREATS!

"If I get fired, I will have no choice but to move my children out of private schools into public schools" SOMEONE CALL CPS! THIS VILE PERSON IS THREATENING HIS OWN CHILDREN!

You are ridiculous if your position is that productivity and profits to the wealthy over the past 30 years justify a decrease in taxes after watching the results from 2004 until now.

I have rarely seen a statement packed with so much wrongness.

1. You are just grouping together people based on their wealth and saying "punish them all" where you are ending up not punishing the people responsible.

2. The current depression was not caused by "corporate greed" it was started as a recession by the government MANDATING sub prime loans and punishing any bank that will not comply. And it was made into a depression by the reckless behavior of this administration. (fun fact, if you just declare laws and contracts to be null and void to protect your cronies like in the auto industry fiasco or the attempt to use eminent domain on mortgages then you utterly destroy any reason for anyone to engage in business)

3. Its not about "rewarding" the rich tax breaks its about setting a tax rate that is sensible and promotes economic growth.

4. The whole "rich got richer in the past 30 years" is because we had some good fiscal policy during reagan... but the thing is when the economy grows everyone gets richer and when it shrinks everyone gets poorer. The CEO who wrote the piece in the OP? He went from having billions to having hundred millions. Bad fiscal policy like over high taxes hurts everyone... except for the cronies.

5. The biggest issue we are having is cronyism and corruption and both of those don't get hurt by higher taxes. (in fact, that is where they get their money)

on Oct 10, 2012

Hey Brad, one thing I have seriously been wondering is how about the competing lines of rhetoric about taxes strangling business growth and the wonder years of Clinton. What were your profits like in the years of the boom when taxes were much higher than they are now? Is it that we are in a systematic problem where revenue is down, so you now rely on less taxes to fund projects as opposed to the sales you had back then? Would and increase in sales from economic recovery allow for taxes to be raised to those previous levels? That seems logical, but I am curious how someone who actually deals with these issues sees things. 

on Oct 10, 2012

LORD-ORION

If any new taxes are levied on me [insert threat]

This is the actual content of merit and speaks volumes about where the real entitlement mentality exists.

You are ridiculous if your position is that productivity and profits to the wealthy over the past 30 years justify a decrease in taxes after watching the results from 2004 until now.

Dissipate fractional reserve currency on schedule or else...

It's interesting how you attempt to interpret things. 

1. That wasn't a threat it was a observation that can be mathematically proven by accounting. 

2. Justify? "Fairness" or what people think other people deserve has nothing to do with this article, that's just how you choose to interpret things to justify a viewpoint that you already hold. This article's argument is based on economics not "fairness" or whatever moral system you happen to believe in at this time. 

taltamir
2. The current depression was not caused by "corporate greed" it was started as a recession by the government MANDATING sub prime loans and punishing any bank that will not comply. And it was made into a depression by the reckless behavior of this administration. (fun fact, if you just declare laws and contracts to be null and void to protect your cronies like in the auto industry fiasco or the attempt to use eminent domain on mortgages then you utterly destroy any reason for anyone to engage in business)

That's what I learned in Economics here in Canada. It's amazing how the "unbias" mainstream news in the US never brings that up, and I thought our media was bad. Fun fact if government mandates that people don't need to prove income to apply for a loan they will lie and take out loans they can't afford, and that's how you get a housing bubble.

on Oct 10, 2012

seanw3
Hey Brad, one thing I have seriously been wondering is how about the competing lines of rhetoric about taxes strangling business growth and the wonder years of Clinton. What were your profits like in the years of the boom when taxes were much higher than they are now? Is it that we are in a systematic problem where revenue is down, so you now rely on less taxes to fund projects as opposed to the sales you had back then? Would and increase in sales from economic recovery allow for taxes to be raised to those previous levels? That seems logical, but I am curious how someone who actually deals with these issues sees things. 

That's a complex question on many levels. First, I was in college for a decent chunk of that and then just a start-up after that.

The level of taxation on its own is irrelevant.  It depends on how much money is coming in.

To put it in video game terms, think of taxation as a royalty.  If my game is doing gangbusters, then I don't care as much if the royalty percent for the other party is high because I have enough.  On the other hand, if things are tighter, then an increase in royalties can be problematic.  And that's the issue we face here.

When the economy is tight, like it is now, putting more strain on businesses is not a good idea.  If you want to raise taxes, for whatever reason, wait until the job market is much better and the economy is much better so that those companies that can't hack tightened profits don't put people out of work that can't find new easily.

 

on Oct 10, 2012

Frogboy
To put it in video game terms, think of taxation as a royalty.  If my game is doing gangbusters, then I don't care as much if the royalty percent for the other party is high because I have enough.  On the other hand, if things are tighter, then an increase in royalties can be problematic.  And that's the issue we face here. 

Well...

1. Every business goes through ups and downs. If the taxes are raised then a businesses currently going through a rough time end up being pushed too far and fail. McDonnalds for example is doing great despite the depression. While a ton of small businesses have been forced to shut their doors.

2. Accounting legal requirements mean that businesses "income" does not properly represent their PROFIT. Taxes are not a percent of profit (if they were then what you said would be true)... Most critical of the issues is that employees have salaries and benefits which are not fully deductible as an operating expense. This is why businesses are forced to fire people when taxes go up. If all operating expenses were deductible then even a 99% tax on ACTUAL profit would not result in a single person being fired. (but it WOULD result in 0% GDP growth as people would simply not be building new businesses)