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Business Owners Share Concern for Economy With Employees, Seen as Threats by the Left.

Recently some business owners have shared their concerns with the economy and its effect on their business with employees.  Included in those company-wide emails are their concerns and personal opinions about President Obama’s chances for a second term and what, in their opinion, that could mean for their companies and their ability to operate at current levels.

Some on the left have pounced on these emails as evidence of a heartless group of business people in corporate America who could care less about the people who work for them and only focus on how many dollars they can stuff in their own pockets.

I’ve posted two emails that have been made public of two business owners who sent them to their employees.

I encourage you to read them entirely before making any judgement.  I believe you will see concern not only for their companies but also for their employees, especially those who have worked for them for many years.  The spin coming out from the left on these letters is at best dishonest and worst malicious.

You read. You decide.

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

E-mail from Arthur Allen to ASG Software employees

Subject: Will the US Presidential election directly impact your future jobs at ASG?  Please read below.

To all ASG employees,

We have been stuck in an extremely sick global economy, but as we should all know by now, the global economy largely depends on the US economy. This sick global economy has been negatively influencing ASG since December 2008. No one could have ever have dreamed that the US economy would still be sick 4 years later, but it is. We have a chance, as individuals, to help turn the sick US economy into a healthy economy, and positively influence the global economy as well. This chance comes on November 6th, when we elect a new President and administration. The US and the world need to elect individuals who have business experience. Neither the world nor the US can stand to elect politicians any longer. In my view, and in the view of most business leaders, if you give politicians 100 questions, they will give you back 100 wrong answers simply because they have no basis for making those decisions. Would you hire a person with no experience to do brain surgery? Of course not, but that’s what the US voters did in 2009. Why does the world keep hiring politicians to run our global economies when they have no experience? It just makes no sense, and yet the world keeps doing it over and over again. Let’s take the lead on November 6th and show the world how it should and can be done.

Many of you have been with ASG for over 5, 10, 15, and even 20 years. As you know, together, we have been able to keep ASG an independent company while still growing our revenues and customers. But I can tell you, if the US re-elects President Obama, our chances of staying independent are slim to none. I am already heavily involved in considering options that make our independence go away, and with that all of our lives would change forever. I believe that a new President and administration would give US citizens and the world the renewed confidence and optimism we all need to get the global economies started again, and give ASG a chance to stay independent. If we fail as a nation to make the right choice on November 6th, and we lose our independence as a company, I don’t want to hear any complaints regarding the fallout that will most likely come. Remember, in the world of business, companies are consolidators or they get consolidated; so far ASG has been a consolidator, completing over 60 acquisitions in our 26 year history. When we buy a company, we eliminate about 60 percent of the salaries of the employees of that company. If we lose our independence and get consolidated, the same thing would happen to ASG’s employees.

I am asking you to give us one more chance to stay independent by voting in a new President and administration on November 6th. Even then, we still might not be able to remain independent, but it will at least give us a chance. If we don’t, that chance goes away.

I apologize for writing such a blunt email, but for those of you who have known me for years and years, you know that this must be serious, and it is. I am going to follow this email with an email to All Sales, offering all of our help to assist them in making Q4 the best quarter in ASG history. Business is hard to find, but it is out there if Sales just goes and gets it.

Mr. Allen

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• If You Are Unemployed – This Is the Reason You Are Not Working – Businesses Are Afraid of President Obama (bonjupatten.com)
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Bain Capital and GS Technology…The REST of the Story.

This is by far a more revealing story—of the pressures of a global market, the dangers of an inflexible workforce, and the opportunities that come with private equity and risk-taking.

It’s not the story the President’s campaign wants the American people to hear however.  It’s much much easier to just blame Bain Capital and, in turn, the President’s political opponent.

The problem is the Obama team knows the majority of Americans are too lazy to dig for information or do their own fact checking.  They want it spoon fed through their TV screens, radios, or laptops.

It’s been said the Truth will set you free.

So here’s a heaping helping from the Wall Street Journal where Kimberley Strassel reported in May the real reasons GS Technology went under.  It isn’t the story the Obama political machine or mainstream media would have you believe.  Not even close.

Taken from the Wall Street Journal – Potomac Watch, Thursday, May 17, 2012

This week the Obama campaign debuted its attack on Bain Capital, the private-equity firm Mitt Romney founded. Its two-minute ad purports to tell the story of GS Technologies, a Kansas City-based Bain investment that went bankrupt in 2001.

To hear the Obama campaign, this is a tale of greed: GST was a healthy, happy, quality steelmaker until Bain plundered its worth and stripped its 750 workers of their due. “It was like a vampire,” laments one former employee in the ad. “They came in and sucked the life out of us.”

GST is a tragic tale, though in a different way. The real story of GST is that of a private-equity firm trying to spark some life into a uncompetitive, over-unionized industry. Bain’s crime here—if that’s what you call it—was giving a dying steel plant an unexpected eight-year lease on life.

When Bain bought the Kansas City mill in 1993, steel was a scene of carnage. Global players were pouring out cheap products, and America’s high-cost steel plants couldn’t compete. The industry had lost 200,000 jobs in preceding years. In 1992 alone, the six largest U.S. steel mills had lost a combined $3 billion. Armco, the company Bain would buy the plant from, would lose $641 million in 1993.

The Kansas City plant was itself dying. At its 1970 height it employed 4,500; by the late 1980s it was down to 1,000. A year before acquisition, Armco had laid off another 75. Its equipment was old; it faced fierce competition at home and abroad.

B.C. Huselton, a vice president of the business at the time, tells me that in 1990 the Armco CEO held a meeting. “He told us, ‘Look, we either try to sell it, or we’ve got to shut it down.'” Armco had shut down another Kansas City facility, Union Wire Rope, only a few years before.

The Kansas City plant had two product lines—high-carbon rods and grinding media (used in mining)—that it felt could give it a competitive edge. But it needed investment, and Armco was tapped out. Bain nonetheless saw some potential and in 1993 joined other investors to acquire it for $80 million. Management renamed it GS Technologies (which would become part of a larger GS Industries) and poured an additional $100 million into modernization.

The strategy worked for a time. The market firmed up and GSI became a U.S. leader in steel rods. In 1994 it felt confident enough to distribute a dividend to investors. In both 1996 and 1997, GSI would realize $1 billion in revenue.

And then came the tsunami. The late 1990s saw a new outpouring of cheap steel from elsewhere around the globe. The Asian financial crisis walloped the mining industry, cutting demand for GST products. The price of GST’s electricity and natural gas skyrocketed. The union dug in, refusing to make concessions. By April 1997, it was on strike, shooting bottle rockets at guards. Labor costs spiked, and by 1999 GSI was reporting $53 million in net losses.

In 2001 it would become one of 31 steel companies that went bankrupt from 1993 to 2003. (Mr. Romney left Bain in 1999.) The steel crash was the economic drama du jour, with Congress railing about “dumping.”

At the time, GST’s union blamed the company’s bankruptcy on the political class, for failing to hamstring imports. “We can’t compete against the steel imports that are being sold under cost,” said the president of GST’s union in 2001. “Our pleas fell on deaf ears in the political arena.” The Bush administration would ultimately slap on giant tariffs.

The bankruptcies were led by unionized companies that, like airlines and textiles and Detroit, had negotiated pay and benefits that helped drive their employers under. GST’s pension benefits would get passed on to the federal Pension Benefit Guaranty Corp., which in 2002 received $7.5 billion in claims from the steel industry alone. The PBGC covered GST’s basic pension payouts.

The Obama ad doesn’t note that the broader company, GS Industries, employed 3,500 and that the Kansas City plant (with 750 workers) was the only one shuttered. Other plants were bought and operate today. Nor does it mention Bain’s other steel investment in the early 1990s, in an Indiana start-up called Steel Dynamics. The firm touts innovative technology and a nonunion workforce. It today reports $6.3 billion in revenue—25 times what it claimed in its 1996 IPO—and employs 6,000.

A private-equity firm looking to quickly strip value from a company—to “suck” the life out of it—does not do so by investing $100 million in modernization and holding on for eight years, through bankruptcy. Bain has surely made its share of mistakes, and one may well have been trying to resuscitate a traditional steel firm in the grip of industry upheaval. The irony, says Mr. Huselton, is that this plant “wouldn’t even be in today’s news, if it hadn’t been the opportunity that came with Bain. Those jobs would have been gone in 1993.”

Isn’t it amazing what important details provided in context can do?

 

Related articles

• http://online.wsj.com/article/SB10001424052702303360504577410573651845802.html
• Bain and GST Steel: The True Story (realclearpolitics.com)
• Eric Logan: Bain filings show lesser role for Romney after 1999. (mysanantonio.com)
• The latest Bain-related smear takes hit after hit (powerlineblog.com)
• Bloomberg on Romney’s bust-out operation (samefacts.com)

Mainstream Media Can’t Be This Stupid…Can They?

Let me begin by stating that I am not a blind critic of the media. I worked in Television News as an Anchor, Reporter and News Director for over a decade and was involved in electronic and broadcast media for nearly 15 years. I loved my profession and my job. I left the industry for a number of reasons one of which included the change I was seeing in how the news was being delivered and what I call the “commercialization” of news.

I had the unpleasant experience of having a general manager of one of the stations I worked for try to kill a revealing and negative story about a local merchant who also happened to be one of the station’s biggest advertisers. After much consternation and debate the story won the day but with a compromise that a particularly damning sound bite not be used on air.

It was then that I realized how much money and politics could effect the news content of the day even at the local level.

It’s been more than 5 years since I left the business and I can only say things have gotten worse not better.  The news is skewed and leaning hard left. Except over at FOX which leans hard right.  Unfortunately this doesn’t help the situation and does not provide balance it simply gives the two sides a place to go for THEIR news.  Not good.

All of that leads into a story I read today from a financial guru and investment adviser named Bob Wiedemer.  Wiedemer appears to be a conservative minded individual but what he says is neither conservative nor liberal.  It’s simply the truth and for some reason our watchdogs of the 4th estate can’t seem to grasp it, or is it something else.  I don’t want to go as far as to imply that facts are intentionally being misreported, but if it looks like a duck and quacks like a duck….

The economic recovery being touted as “under way” by the media is simply a bunch of hot air.  Boloney.  Hogwash.  Bullshnike…  It doesn’t exist and the numbers prove it.  And here they are.

Image via Wikipedia

The “recovery” is made up of only stimulus funds.  It is a result of massive government borrowing and spending.  Here are those numbers.

In 2007, the U.S. gross domestic product (GDP) totaled $14 trillion.  In 2010 the GDP totaled $14.6 trillion dollars.  A net increase of $600 billion.  Viewed on its own, $600 billion in three years is not very good, but on the bright side, its a rebound that tracks above inflation, slightly.

Compare that however to the increase in government borrowing. In 2007, the U.S. government borrowed and spent $163 billion.  In 2010 it borrowed and spent almost $1.4 trillion, a net increase of over $1.2 trillion.

The spending binge (on borrowed dollars) is also what’s propping up the stock market i.e. printed money the quantitative easing strategy of government bond buying, the second round of which ended June 30th.  The fact is when the Fed prints new dollars the market responds with an upswing.  When the Fed stops printing dollars it drops.  The stock market recovery is as fake as the economic recovery.  Driven by unsustainable irresponsible government idiocy.  It’s not based on hard-nosed analysis of the economy and its underlying capacity for growth, it’s based on printed money pushing up stock values beyond any true economic recovery.  You want a glimpse of the future of the stock market?  Look at the housing market.

The golden question?  Besides the obvious, why is the media ignoring the real story; how are we going to pay back all the borrowed cash?  The answer: we can’t.  Not even if every dollar earned by every American taxpayer was paid in taxes for the next decade.  The bubble economy is about to pop and when it does inflation, the crash of the dollar, and, heaven forbid, the elimination of the dollar as the world’s reserve currency.  None of it good.

But you won’t hear that from those friendly smiling faces on your TV screens.  Nope.  They’re too busy admiring the Emperor’s new clothes.

Related articles

• The Largest Bubble in U.S. History (anationbeguiled.wordpress.com)
• Recovering From a Balance-Sheet Recession (economix.blogs.nytimes.com)
• THIS CAN’T BE GOOD: U.S. Borrowing Tops 100% Of GDP: Treasury. “The new borrowing took total publ… (pajamasmedia.com)

Information for this blog post was found in the Financial Intelligence Report a monthly financial news letter.  You can subscribe at moneynews.com  This blog does not endorse or represent moneynews.com.