Callaghan: Starbucks CEO brews up leadership
Sunday, September 25, 2011
Howard Schultz’s recent letter to “Fellow Concerned Americans” made me reconsider my boycott of Starbucks.
Mine isn’t a hard boycott. I’m not a fanatic or anything. It started five years ago when I read about Starbucks baristas dissing what they dubbed “Ghetto Lattes.” That’s when customers order iced Americanos, no water and then top off with milk from the condiment bar. It’s cheaper than an iced latte, but the baristas complained it was “stealing” milk from the company.
Anyway, I decided that too many Starbucks employees had drunk the corporate Tazo Tea. It seemed best to patronize local coffee shops instead, entering a Starbucks only when I had no other choice. As I said, I’m not a fanatic. But then Schultz became one of the few American business leaders to stop whining about the sorry state of the economy, to stop fingering politicians for the blame, and to offer to do something about it.
Most attention has been paid to Schultz’s suggestion that people stop making campaign contributions to President Barack Obama and members of Congress until “a fair, bipartisan deal is reached that sets our nation on stronger long-term fiscal footing.” Such a crusade is mostly symbolic. There will be plenty of donors to backfill for each boycotter. And it falls into the well-worn tactic of blaming politicians and fantasizing that something can spark them into action. In truth, members of Congress look more like average Americans than citizens are willing to admit — divided, short-sighted, finger-pointers who call for sacrifice as long as they’re not doing any of the sacrificing.
No, the real refreshment offered by Schultz is his pledge to do something about the economic doldrums himself. “Right now our economy is frozen in a cycle of fear and uncertainty,” he wrote. Companies are afraid to hire, consumers to spend, banks to lend. Hordes of cash that could be used to expand operations, train workers, and spark innovation sit on the sidelines.
‘Confidence is contagious’
“The only way to break this cycle of fear is to break it,” Schultz wrote. “The only way to get the country’s economic circulatory system flowing again is to start pumping lifeblood through it.”
So Schultz pledged to start hiring more workers and to accelerate expansion of Starbucks stores. “Confidence is contagious,” Schultz wrote. “The best thing we can do now is to spread it.”
Over the last three years, hundreds of billions of federal tax dollars have been pumped into the economy with direct payments to banks, carmakers and insurance companies. Costs of state workers’ compensation and unemployment insurance have been reduced and regulation slowed.
Partly as a result of such largesse, American companies have accumulated almost $2 trillion that could be invested but isn’t.
The same week Schultz called for action, the president of the Washington Association of Business was rationalizing that hoarding of cash by business. “In short, the reason for uncertainty in the private sector is clear: uncontrolled federal spending, new requirements and costs from health care, and crippling regulations,” wrote AWB’s Don Brunell.
It’s not our fault, Brunell says of business, it’s the government’s fault. Until the government acts to reduce costs and regulation, “our nation’s unemployment rate will remain high and our financial solvency will remain in serious jeopardy.”
Schultz said we can’t wait for someone else to go first: “In this moment of great uncertainty, the government needs discipline, the people need jobs — and leaders need to lead.”
To that, let me offer a Ghetto Latte toast to Mr. Schultz. Meet me over at the condiment bar.