Class Warfare

10.10.12

Why is David Siegel so Mad?

A second thought about David Siegel, the time-share magnate who warned his employees of job losses if Barack Obama is re-elected.

Obviously, this kind of behavior by an employer is improper. It's one thing for an employer to warn that a particular government policy is potentially injurious to a firm or industry; another to demand that employees use their franchise to protect his personal interests - in this case, his present tax rate.

Yet inside this shabby story is a nugget of insight screaming to get out.
David Siegel and his wife Jacqueline feature in the recent movie, "Queen of Versailles." The movie ends with their timeshare company on the edge of bankruptcy, their preposterous 90,000 square foot mansion unfinished and for sale, and Siegel himself defeated and humiliated.

Siegel is now attempting to a comeback. In July, he gave an interview to Reuters in which he claimed, "We're the most profitable we've ever been." He is hiring employees and claiming that his company will be debt-free in 2 1/2 years. He says he is restarting work on his monster home - although still with a view to sale.

Siegel's company is privately held, so it's not easy for outsiders to check his claims. However, it is improbable that they are true, given the still very fragile state of the time-share industry. Even if the claims are true in the sense that Siegel's company now earns a higher return on investment than before the crash, Siegel himself must be a very much poorer man than he used to be. None of this has anything to do with national presidential politics, but it does cast some light on Siegel's intense personal embitterment - and his otherwise bizarre letter.

Think of it: In his letter Siegel celebrates his own work ethic and denounces those who work only 40 hours a week. "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." Siegel obviously believes this to be a commendable attitude. Apparently he believes that America would be a better place if more of us worked without rest, more of us worked through weekend. And maybe he's right. But I'll tell you one thing about such an America: It wouldn't have any time-share magnates.

Imagine Walt Disney denouncing animated cartoons. Imagine Henry Ford praising the bicycle. Imagine Dave Thomas going Vegan. That's what Siegel is doing here.

And even weirder:

Think of David Siegel's market. It's not the 1%. I doubt you'll find a single time-share buyer anywhere from Dupont Circle to Chevy Chase. He is the Wal-Mart of the vacation industry, the Hyundai, the Applebees. His top concern ought to be seeing as much disposable income as possible flowing into the hands of the $65,000 a year family. An economic future that continues to shift wealth from the middle to the top is good news for the Four Seasons hotel chain, for builders of vacation homes in Aspen, for the fractional jet industry. But it's death to time-shares - and yet there is Siegel fulminating against his very own customers.

Fairly or not, "Queen of Versailles" leaves behind an impression of David Siegel as actually not a very astute businessman. He maintains no cash reserves. He has established no trust funds to protect the wealth of his wife and children. He signs his own personal guarantee to a bank note - a violation of the Prime Directive of real-estate development, never, ever, ever give a personal guarantee. Really, he's probably best thought of as a builder rather than a developer, somebody who keeps building as long as the banks keep lending and who is caught utterly unprepared when the lending ends, as it always does.

In the end, he seems as much the plaything of circumstances as any of the hapless victims of the despised 47%.

That's a frustrating and enraging situation to find yourself in. And it's a situation in which a man begins to look around him for somebody else to blame. Isn't that why we have a president?