Starbucks' Schultz: 'Solve the Problem!'

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"Solve the problem!" Starbucks CEO Howard Schultz repeated multiple times in an interview at the Washington Ideas Forum where he blasted partisan politics in Washington "We have a crisis of leadership and confidence in Congress and we're drifting toward mediocrity," he told Chris Wallace of Fox News. "This is not the America our parents promised."

Schultz made news last month when he published an open letter asking business leaders to withhold campaign donations until Congress came together to pass a deficit reduction plan and acted on the jobs crisis. "I don't want to support the status quo," Schultz said. "I don't want to feed the beast."

Washington Ideas Forum - Full CoverageWallace pressed on the issue, saying "there is a basic philosophical disagreement in this town" between those who believe  government is the solution versus those who believe equally fervently that government is the problem.

Schultz resisted blaming one party over another, instead saying, "we need cooperation. We need compromise. If this was a business, the problems would be solved. Solve the problem."

The Starbucks CEO reviewed the history of the Marshall Plan designed to protect Europe from economic collapse and stop the march of communism after World War II. "Is there any way that something close to the Marshall Plan could possibly get through a committee [today]?" he said. "The domestic agenda the problems are at least as great as the 1940s. We need a comprehensive commitment."

Schultz, who grew up in a modest family and said his success in life represented the epitome of the American Dream, said his greatest fear was that Congress' dithering would crush the middle class. The lack of solutions could engender "anger and frustration [that] could have unintended consequences could lead to unrest in America."

He blamed ideology and "the season of reelection" for stalemate in Washington.

In one particularly hot moment, Schultz quoted George Will who said last week that Washington was working. "Is he out of his mind?" Schultz said. "Is he in a coma?"


Schultz, who supported President Obama in 2008, said he was disappointed not solely in the president but in Washington.

Starbucks provides health care for 130,000 people, Wallace said, including part-time workers. So how did Schultz feel about the Obama health care law that could raise insurance demands on smaller companies? "As its currently written, I don't believe that mandate would be good for small businesses," Schultz said, predicting that the mandate for small- to medium-sized companies would be reformed.

Schultz suggested that after many public companies let people go to be leaner through the recession, a "new muscle memory was built" in American business that has made companies more profitable with fewer people. He also cited the headwinds of low demand and high uncertainty.

Schultz also said the Occupy Wall Street movement presages unrest across the country.



View the entire session at FORA.tv

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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