Leave it to Steve Wynn to breathe a little life into an otherwise run-of-the-mill third-quarter conference call.
In case you missed it, Wynn, chairman and CEO of Wynn Resorts Limited, took time during his company’s question-and-answer session with analysts on Wednesday to give his thoughts on Occupy Wall Street—and the anger behind that movement. I wouldn’t exactly call it Howard Beale-esque, but it still was a more honest assessment of the political and economic direction in which the United States is headed than I would have expected to hear.
Setting the stage for Wynn’s insight was Harry Curtis, an analyst with Nomura Securities Company Limited, who posed the following question to Wynn:
Steve, the topic, at least here in New York, is Occupy Wall Street, and I was going to ask a wise-ass question about whether or not you are going to contribute to that cause. But I do think that it raises an interesting political question, which is: How do you see the landscape politically now? Is there any reason for optimism given the current slate of candidates to give you hope for the regulatory environment improving for your business?
So as not to risk taking anything out of context, I have laid out below Wynn’s response based on a transcript from the call.
We had a debate here last night and we had a focus group, that actually took place in the Tryst last night with Frank (indiscernible). It's very interesting about the folks who are occupying Wall Street. That group is quite diverse. There are people in there that think the government should give them more just because they are alive regardless. There are people there who are opposing government spending. There are people there that are opposing bailouts. That group is not homogeneous by any means. What you do have on Wall Street is a reflection, a real reflection in my opinion, of the anxiety, the insecurity and the fear that is endemic in the United States of America about the way government has gotten into the business of managing its life and the ability of the government to manage the economy intelligently by increasing the emphasis in government spending rationally to the point that we want everybody's financial security.
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I am watching my employees' standard of living dropped because of deficits. I think that the American public is beginning to make a connection between deficits and their own loss of living standard. People that work from here being paid an 80-cent dollar on their way to a 70-cent dollar, and even though I've given two cost of living increases to my employees, in spite of the operating losses in America, because I've been able to use the money from the cap. I have not been able to keep up with the effect of deficits on the living standard of my employees.
The net result of all of this is frustration, anxiety and anger. You're seeing that on Occupy Wall Street. You can see it taken to the next level in Greece, where people are trying to break in to a Parliament primarily controlled by the unions and the very kind of government that the people who are trying to break down the census elected. There comes a moment when the population realizes that it has to stop, and sometimes it takes a form of tax the rich people, which is a reflection more of the lack of understanding of how the economy works. Rich people are now being defined by the administration as people who make $1 million. Well, most of the businesses in America, other than giant corporations, are paying taxes under Chapter S, partnerships or individual proprietorships. So somebody shows that they've made $3 million or $2 million this year and they paid personal taxes on that money. They subtract the cost of living and then what's left after, and that does not show that probably 25% or 30% of their profits are tied up in accounts receivable or inventory, stuff that they can't spend or get their hands on, but to support their business and their employment. And then they take whatever is left, these so-called millionaires, and they open up another shop or another office. And that, that is the only known engine of growth in the United States of America.
And we have an administration that is fanning the fires that this is somehow undeserved, profligate millionaires, and it is worse than hypocrisy. It is totally dishonest. It represents by young people who don't know the difference, simple misunderstanding and the lack of understanding of how the economy works or what's going on in America, but if it's politician that does it or union leader, then it represents something much more pernicious. It represents a deliberate misleading of the public.
And I think that Americans are waking up to this. And it's taking the form of anger and dissatisfaction with the government. And I think that's probably just right because until there is a change, until this all stops, it's only going to get worse. No matter what anybody says in some fancy speech, even if it's a President, it is going to get worse. People say we're angry at the government for not compromising both sides. Well, we don't really have a situation that lends itself to what reasonable people would call compromise. We've got a situation that requires a change. That is to say one side is right here and the other side is wrong. You cannot sustain these deficits. You cannot undercut the people that form the jobs and create the employment in this country.
I'll give you an example of Las Vegas in my own industry. Across the street from me is an empty piece of property that's 34 acres. It's owned by two Israeli(s) that are friends of mine that bought it at a very high price and are sort of in a difficult position now. They even owe money against that property. They have come to me on a monthly basis to say, go ahead, Steve, you take it, build something, connect it to Wynn and Encore, your golf source is in convention facility and help us get out of this. We are willing to take a very long-term approach, and we'll turn the property over to you even if we have to pay off the loan. Well, that's a very attractive offer, especially since they're willing to pay us for management, design and supervision, as well as inviting us to invest. But I have to tell both of these men who were friends of mine, “Look, I can't give you a reasonable projection of what this return on investment will be even if we spend (US)$2 billion and create 10,000 direct jobs and another 30,000 indirect jobs for a total of 40,000 jobs.” That's how many jobs I could create if I broke ground on the Frontier property in the next six months or a year. And we would know how to do that. But I can't tell the men who are willing to sacrifice any short-term benefit in exchange for a long-term opportunity because I cannot predict what healthcare costs are going to be, what regulatory load they're going to heap on us, what new taxes or other burdens this insatiable governmental appetite for money from the citizens will take us to.
Now that is simply a statement of fact. It isn't a partisan political pitch. It's simply a statement of fact from a businessman who has supported probably more Democrats than Republicans. But I say right now that the Democratic agenda of spend and bribe the public has bankrupt this country, and until it stops, the citizens of this country are in for more hard times. And fancy speeches aren't going to change that, only a fundamental realization that citizens are going to have to take real sophisticated responsibility for how we allocate the resources of this country.
Whether planned or not, that was the last question taken during Wynn’s call. I suppose there just wasn’t anything left to say.
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