In addition to presiding over the most grotesquely indebted company — by far — in the casino industry, Caesars Entertainment CEO/President/Chairman/Pontifex Maximus/Generalissimo Gary Loveman also wants to dictate the manner in which we eke out our “golden years.” Amazingly, somebody actually put this buffoon in charge of the “health and retirement committee” of a club of CEOs called the Business Roundtable, a gaggle of Beltway insiders. Their nostrum for our future: Bend over and grab your ankles, working people. Predictably, Loveman found a ready and willing sycophant in the Robin Leach of news media, Neil Cavuto, kneepads at the ready.
Seriously, Loveman and his cronies would keep those of us 54 and under at our desks another three years, pushing the retirement age back to 70, generally speaking. (I’m almost 20 years from that milestone, which means it will undoubtedly have been bumped back several times more before I’m eligible.) Presumably, this was done on the empirical basis that the Bible allots us three score and 10 years, so we’ll all croak before we can collect Social Security, thereby “saving” the system. The simple fact that Loveman seriously believes that Social Security is sufficient to provide “a dignified retirement” shows how out of touch he and his CEO pals are. Loveman wants to “send a signal to U.S. consumers, business owners and the world that our political system can make the tough decisions.” Why? Loveman’s greatest field of expertise is forcing “tough decisions” onto other people.
Annual increases in Social Security payments — a pittance already — would be further curtailed. In a small concession to progressiveness, the Loveman Gang proposes “guaranteeing low-wage workers enough benefits to stay out of poverty, while lowering initial benefits for retirees with higher incomes.” (Emphasis added.) That’s mighty white of them.
“I am encouraged by how relatively easy these remedies really are,” Loveman crooned to Politico.com. “They undoubtedly seem easier to those whose pay averages $362,000 a year—the median compensation for a private-company CEO,” tartly replied the Wall Street Journal’s Marketwatch, noting that the onus would now be the private sector to keep employees on the payroll an additional three-to-five years. Huffington Post’s Richard Eskow was even blunter: “Loveman’s [world] is the one where people who have paid for Social Security and Medicare coverage throughout their working lives must give some of their benefits up — for him and his friends … If that sounds a little Stalinist to you, that’s because it is.”
While state and civic employees are being forced out of collective bargaining, the Loveman Gang would compel them into joining Social Security, thereby getting you coming and going. Medicare would be ‘partially privatized.’ Oh, ducky. If private insurers do to Medicare what they’ve done to visiting your general practitioner, we might as well just take the gas pipe en masse. (As one retiree lobbyist quickly pointed out, this is a Mitt Romney idea that tanked with electorate last November. Much of the rest, though, is characterized as Barack Obama boilerplate.) One cannot help but note that Loveman, whose compensation has soared as high as $90 million a year and averaged a meager $28 million per year during the Great Recession, proposes very little tightening of his own capacious belt, nor those of others in his income bracket, whom the Loveman Solution is carefully crafted to exclude. Ironically, failed casino opponent and former Michigan governor John Engler is riding shotgun for the Loveman Gang.
There are some good ideas amid all the elitist piffle, such as means-testing Medicare recipients — who will also have to wait longer for eligibility, though — and “better coordinating prevention and care for chronic conditions.” That last nostrum will be anathema to HMOs, whose Dark Ages notions of “prevention and care” are subject in which I am painfully well versed. And as Eskow points out, the Loveman Gang is rife with head honchos from Big Pharma, for whom driving down medical costs is not exactly Job One. As for the rest of it, the Loveman Gang’s ivory-tower proclamation is already landing with a thud amongst my new peeps at the AARP. The good news for them is that it’s politically dead on arrival as well as financially problematic. Best line of the day goes to the Las Vegas Review-Journal’s Howard Stutz for this deadpan paragraph:
“The roundtable also suggested employees save more toward retirement.”
Sure, as soon as salaries begin keeping pace with inflation, just for starters. And Gary, wouldn’t that increased retirement cut into the discretionary spending of your Total Rewards database members? How in tarnation are you going to pay off that little $20 billion note on Caesars if consumers save more, spend less? Might not your bosses at Texas Pacific Group and Apollo Management (to say nothing of sugar daddy Dan Gilbert, right) frown upon this latest brainstorm? Quoth Bloomberg News, “Harrah’s makes more money from elderly slot machine players than any other demographic in the casino.” (The occasional drink- and drug-addled millionaire helps, too.) Loveman admits that’s having a hard time getting Caesars’ non-union employees to buy into the company’s 401(k) plan. Gee, I can’t imagine why. Perhaps it’s because Loveman might suspend matching contributions at a moment’s notice. Or because you don’t want to trust your retirement money to a company that’s top-heavy with debt and liable to capsize in the next couple of years.
The Loveman Solution was issued on the same day that BNP Media released a full-page fellation of Chairman Gary, who will be the keynote speaker at Southern Gaming Summit, on May 8. (I reckon the Biloxi village idiot was unavailable that day.) Maybe he will explain what he plans to do with the big slab of cement that was intended to be “Margaritaville.” Or he will talk about how loves the South so much that’s why he’s trying to unload as many Mississippi and Louisiana casino properties as he can … if anybody will take them. But probably not. Which brings us to the insult to the intelligence of the average American to be lectured on fiscal responsibility by a man who is the CEO equivalent of a pathological gambler. Not only should Mr. Loveman be collecting unemployment by now, he never, ever should have been placed in charge of Harrah’s Entertainment. Once he made that “me, too” grab for Park Place Entertainment, aping MGM Mirage’s takeover of Mandalay Resort Group, Harrah’s was on an express lane to the abyss. “My sort of logic excels at things like acquisitions or expansions or developments,” the ever-modest Loveman proclaimed in 2010.
Let’s take a break until our sides stop hurting from the hilarity of that last remark. Even Loveman’s oft-advertised “250 pounds” weight contains a higher likelihood of accuracy. (Either that or he’s found a way to displace volume far in excess of mass. Archimedes would be impressed.)
Yes, those acquisitions — including London Clubs International and Macao golf course (left), both up for sale now — have truly excelled, have they not? As for the IPO that was supposed to provide “capital for … Asian expansion,” how’d that work out? Not so good, as I recall. “I am only driven where the evidence takes me,” the CEO added … which suggests that maybe he needs to get some new evidence. And why would you put a casino company — as customer-service-driven an industry as Loveman’s beloved McDonalds — in the hands of a man who exudes an ill-disguised contempt for players? He openly admits that he lives near Boston to hide from Caesars employees “are likely to be unhappy with me for some reason — we’ve laid off their wife, they’ve lost their health benefits, something.” Damned peasantry!
What he disdainfully calls “slot boxes” (below) are accused of producing revenue that deteriorates after their first year. (Guess he never heard of a little slot box called Bellagio. It does respectable business at age 14.) That would explain why allows his properties to physically deteriorate as well, to the point where some of them look far older than they are. As for his disastrous LBO, I am always moved to paraphrase a line from Das Boot, when the submarine is crumpling on the bottom of the Straits of Gibraltar and the engineer says the captain’s plan had only one flaw: “It had to work.” The same could be said of a $24 billion buyout in 2007 that was predicated on that extremely wishful notion that it was “only a matter of maintaining single-digit gaming growth” … in order to merely pay the interest, that is. The question of paying down the principal appears to have been begged. And as Loveman damn well knew (or should have known), when you borrow $24 billion, it’s not you that’s in trouble, it’s the banks. He could threaten default with impunity telling Wall Street to eat debt … or else. As Loveman sadistically gloats, “There’s nothing like impending pain to focus the mind.” Little did then-CEO Philip G. Satre know that, when he hired Loveman in 1998, he had set in motion the destruction and disrepute of the company.
As Loveman himself admitted, vis-a-vis Macao, “You had to have a kind of intuitive courage and I am not well suited to those kinds of decisions.” No, he is not. And that is precisely why he should be fired from Caesars Entertainment — the sooner, the better. Academia’s gain will not be gaming’s loss.