One of America’s most astute businessmen, known for having
expanded the Las Vegas strip of resort hotels and casinos in the 1990s, says
the U.S. remains mired in an economic funk and any talk of a broad recovery is
“pure fiction. A lie.”
Steve Wynn, the 73-year-old founder
and CEO of Wynn Resorts, made the comments in a televised interview with Jon Ralston of PBS’ “Ralston Live.” He opened the Wynn
Hotel and casino in Macao, China, in 2006, and is known as an international
gaming and casino magnate.
Wynn’s Macao operation recently reported a 28 percent
quarterly loss in revenue, and a 70 percent downturn in earnings. He is now
building the Wynn Palace in China, which he calls “the nicest, most extravagant
hotel in the world,” with 1,700 rooms and a $4 billion price tag.
He cited corruption as his primary concern in China, but in
the U.S. he said the economy has never really bounced back from the 2008
financial meltdown.
“You’re not sanguine about Las Vegas, though. You’ve said
the notion of a great recovery is a complete dream here in Las Vegas,” said Ralston
of KNPB, a Public Broadcasting affiliate in Las Vegas.
“Well, the idea that America is in the midst of a great
recovery is pure fiction. It’s a lie. It’s a jobless recovery,” Wynn said.
“Because recoveries are marked by the level of real employment. And if you
count the people who have left the work force, real unemployment is 15 to 20
percent.”
Not only is unemployment much higher than the “official”
rate of 5.5 percent, but Wynn said the Consumer Price Index, used to measure
inflation, is also rigged in such a way that it doesn’t accurately reflect what
real Americans experience on a daily basis. According to the U.S. Bureau of
Labor Statistics, the U.S. had -0.1 percent inflation for the 12 months ended
in March 2015. Inflation doesn’t exist.
Wynn says that’s a sham. “If you take real inflation, and
you’ve got to count energy and food and all that stuff, real inflation is much
higher than they say it is,” Wynn said. “My employees’ take home pay, in spite
of the increases we give them, their paychecks are 90-cent paychecks, 90 cents
on the dollar. It’s very difficult for the middle class in America to keep up
because of the inflationary pressure and the devaluation of the dollar.”
Wynn gave Ralston a quickie lesson in economics 101 so he
could understand the dilemma faced by the average American. It starts with the
overwhelming national debt.
“It’s very difficult to explain to a normal working citizen
the implications of what $18 trillion in debt means, and what it means when the
Federal Reserve buys the U.S. Treasury bonds to finance our loss every month,”
Wynn said. “People think that is some abstract conversation in Washington, uh,
for pundits.
“In fact it impacts every one of my employees, critically,
every day,” he said. “They notice when they sit down at the kitchen table, that
after they pay the necessities, there just isn’t any money left.”
As for the future of Las Vegas, it sounds cloudy, at best,
from Wynn’s vantage point. “Are you
optimistic about the future? You’ve always been optimistic. Where is Vegas
going?” Ralston asked. “The gaming industry is facing uncertainty in Nevada, in
America, and in China,” Wynn said. “For the past 50 years, two-thirds of the
gaming establishments in the state of Nevada have lost money.
“The industry as a whole loses money in Nevada. Loses
money,” he repeated. “Nevada Energy doesn’t lose money. The gaming industry
loses money. It employs all the people. It pays all the taxes. And if you take
the P&L, the profit and loss, of the hotels in Las Vegas and Reno, it is a
number that is minus, not plus, minus. So, the challenge has really never
changed. Most of the money has been made by the best, the newest and the most
competitive properties, and I suspect it will stay that way.”
While he’s made money on both continents, North America and
Asia, Wynn indicated it’s getting harder to make smart investments. His company
recently posted poor quarterly numbers in China. “Those are terrible numbers
for everyone in Macao. What is going on?” asked Ralston.
He said corruption in China is pervasive. “All businesses in China have to do business with government and government
officials Its
impacted all aspects of the economy in China, including Macao,” he said.
Uncertainty reigns, he said. “All you can do is what we do
in America. Keep a strong balance sheet, don’t get over leveraged and try to
protect the security of your employees.”
He said the new “Palace” in China took two years to plan and
will take four years to build. “You can’t stop now. The skin is on the
building,” he told investors on a recent conference call.
While Wynn is building, most major U.S. retailers are
closing. WND
reported this week that U.S. retail chains plan to
close more than 6,000 stores this year and next year, another sign that the
economy is not nearly as strong as some in the Obama administration has said it
is.
But Wynn said his people have the capital and experience to
“do it right,” and likely won’t get caught by any new downturn to the extent
that others will. “It’s not so much how much is built, but how good is it? The
excitement and the quality of the buildings here,” he said.
Source: http://www.wnd.com/2015/05/steve-wynn-economic-recovery-pure-fiction/
No comments:
Post a Comment