No, Starbucks Cannot Replace the Need For Progressive Government

(Cross-posted at Winning Progressive)

Over at the New York Times, Joe Nocera had a column entitled “We Can All Become Job Creators” in which he praised Starbucks CEO Howard Schultz for two recent proposals regarding jobs and politics:

When last we left the chairman and chief executive of Starbucks, in mid-August, he had written a widely publicized e-mail lamenting the poisonous state of our nation’s politics. That led him to his first big idea: a call for a boycott of political contributions until Democrats and Republicans began to act in a nonpartisan way for the good of the country.

The idea had undeniable appeal. But it was also — let’s face it — pretty quixotic, fun to dream about but impossible to turn into reality.

Here we are two months later, and Schultz is back with Big Idea No. 2. It is every bit as idealistic as his first big idea, but far more practical. Starbucks is going to create a mechanism that will allow us citizens to do what the government and the banks won’t: lend money to small businesses. This mechanism is scheduled to be rolled out on Nov. 1. This time, Schultz is not tilting at windmills.

. . . .

Here’s the idea they came up with: Americans themselves would start lending to small businesses, with Starbucks serving as the middleman. Starbucks would find financial institutions willing to loan to small businesses. Starbucks customers would be able to donate money to the effort when they bought their coffee. Those who gave $5 or more would get a red-white-and-blue wristband, which Schultz labeled “Indivisible.” “We are hoping it will bring back pride in the American dream,” he says. The tag line will read: “Americans Helping Americans.”


While I appreciate Mr. Schultz’s efforts to think big, his two proposals are both highly misguided efforts that ignore political realities by working from a flawed pox on both houses approach. The proposal to withhold campaign contributions represents little more than unilateral disarmament, as we can guarantee you that the Koch Brothers and other conservative sugar daddies are not going to stop bankrolling the GOP. All encouraging public-spirited people to stop donating to political candidates will do is reduce the electoral chances of candidates who present the best chance of us making progress in reforming the political system.

And the proposal to have average Americans giving money to Starbucks (and, presumably, buying a $4 caramel macchiato at the same time!) so that Starbucks can then give it to an organization that will hand out small business loans is flawed in a number of respects. First, it is a highly inefficient approach. Second, it amounts to little more than a drop in the bucket in comparison to the level of small business loans and other investments needed to get our economy moving again. According to Mr. Nocera’s column, 10 million Starbucks customers would need to give $5 each in order to leverage $350 million in small business loans.

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Perhaps most problematic, however, is that Mr. Schultz’s proposal encourages the view that we cannot or should not look to government to get our economy moving. For example, Mr. Nocera refers to the government as a “non factor,” saying:

Should the government finance a sustained infrastructure program to create jobs? Of course. Should it give tax breaks to companies that hire the unemployed? Yes again. But with an election coming up, nothing of the sort is likely.

. . .

With the government and banks unwilling or unable, it’s time we took matters into our own hands. At this point, who else can we count on?

But this assumption that the government is a “non factor” that cannot or will not help the economy ignores the reality that one party – the Democrats – supports infrastructure investment, small business loans, payroll tax breaks, unemployment compensation extensions, and other steps that would stimulate our economy and reduce unemployment. The other party – the Republicans – are filibustering such proposals (even ones they once supported) and have failed to offer any credible jobs plan of their own. And the reason the GOP is doing this is that their number one goal is to try to ensure the defeat of President Obama in 2012. In other words, it is not that our political system refuses to take action on the economy. It is that one portion of that political system – the GOP – is engaged in a cynical obstructionist ploy that puts their ideological and political goals ahead of the well-being of the American people.

In the face of this clear distinction between the two parties, we need everyone who is concerned about the economy to focus on getting the proposals in the American Jobs Act passed, President Obama re-elected, and Elizabeth Warren and other progressive Democrats elected in the Senate and House. Unfortunately, Mr. Schultz’s proposals do nothing of the sort and treats the political system as a “non factor,” thereby ceding the political forum to the conservatives who are doing so much to hold our economy down.

Yes, serious reform is needed and the Democrats are far from perfect. But step one in getting the policies and reforms that are needed is to vote out the opponents of reform – the GOP – and to get folks who we at least have a chance of pushing to give us real reform – the Dems – back in, not pretending like the political system is a “non factor.”