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Howard Schultz just showed he doesn't have a grasp of the issues

Rob Pegoraro
Contributing Editor
AUSTIN, TEXAS - MARCH 09: Businessman and presidential candidate Howard Schultz speaks live on stage during the 2019 SXSW Conference And Festival at the Austin Convention Center on March 09, 2019 in Austin, Texas. (Photo by Jim Bennett/WireImage)

AUSTIN—The face of the world’s biggest coffee chain and a possible independent presidential candidate who attacks both parties came to a city teeming with independent coffee shops and liberal Democrats and did not get booed.

In that respect, Starbucks (SBUX) chairman emeritus Howard Schultz’s Saturday-morning talk at the SXSW conference here went better than expected.

But in terms of giving people a reason to vote for him someday, Schultz served watery decaf. His prescription for America, to the extent that it exists, amounts to cutting the deficit and trying to get more companies to act like Starbucks.

A systemic critique

The core justification for the maybe-candidacy Schultz launched five weeks ago bears a striking resemblance to President Trump’s campaign message: The system is broken, and I alone can fix it.

Former Starbucks CEO Howard Schultz speaks at Purdue University in West Lafayette, Ind., Thursday, Feb. 7, 2019. (AP Photo/Michael Conroy)

“The two-party system is broken, dysfunctional, and in need of great repair,” Schultz said to his onstage interviewer, NBC media reporter Dylan Byers.

Schultz despises the other wealthy businessman to make that claim—he repeatedly denounced Trump for a lack of leadership, character and dignity—but called Democrats just as bad for leaning ever leftward.

"You can't try and solve one extreme with the other,” he said, calling Democratic support for such policies as single-payer health care and a Green New Deal “socialism.”

“Let's propose things that are true, that are honest, that are sincere, that are realistic,” he said of anti-global-warming agenda championed most publicly by Rep. Alexandria Ocasio-Cortez (D.-N.Y.).

A Schultz victory, meanwhile, would stop that separatism and free “good Republicans and Democrats” from having to knuckle under to party bosses. “If an independent president gets elected, you're going to see those good people move outside their ideology.”

On health care and socialism

But what would a President Schultz actually do? It’s clear he would strive to reduce the national debt, which he called “immoral.” But his vague answers to basic questions about health care don’t speak well to the depth of his dedication.

“Every American should have the right to affordable health care,” he declared. Then he suggested that doing more than amending the Affordable Care Act—for instance, letting the government negotiate drug prices—would be socialism.

The Anthem Inc. website is displayed for a photograph on an Apple Inc. iPhone in Washington, D.C., U.S., on Saturday, April 21, 2018. Anthem Inc. is benefiting from a decision last year to retreat from the Affordable Care Act's health insurance markets and raise prices significantly. Photographer: Andrew Harrer/Bloomberg via Getty Images

“There's nothing free in America,” he said of Medicare For All proposals. “Taxes for everyone are going to have to go up.”

That is true. But as a former chief executive of a company that provides health insurance for its workers, Schultz should know well that expecting private companies to subsidize health care for their employees isn’t free either.

An audience member responded by asking Schultz to define socialism. The crowd murmured its disapproval at his glib answer: “If you want a good description for socialism, just look at Venezuela.”

A more relevant parallel would be Canada, where Starbucks owns more than 1,100 stores. Does the government-run insurance covering those employees amount to socialism? Would Schultz rather have Starbucks pay those health-care costs directly? A reasonable debate on this issue would start right there.

Will he run?

Schultz’s answers about the rationale and odds for his candidacy also seemed thin.

He didn’t say that the Democratic Party nominating somebody more centrist—he cited former congressman Beto O’Rourke, former vice president Joe Biden and former Colorado governor John Hickenlooper as possibilities—would lead him to drop out.

And after his early stumbles, Schultz still seems to rate his odds highly.

Howard Schultz, former chief executive officer of Starbucks Corp., right, speaks as Dylan Byers, senior media reporter at NBC News, listens during the South By Southwest (SXSW) conference in Austin, Texas, U.S., on Saturday, March 9, 2019. The SXSW conference provides an opportunity for global professionals at every level to participate, network, and advance their careers. Photographer: Callaghan O'Hare/Bloomberg via Getty Images

“I'm not going to allow the pundits, the cynics, to tell me that what I believe needs to happen in America isn't possible,” he stood up to declare, drawing some applause.

Then he suggested he could take Texas out of the Republican column, something the last major independent candidate—Texan entrepreneur Ross Perot—didn’t do in 1992. “If I were to enter the race, there's a good chance that Donald Trump would not win the state of Texas.”

Schultz did tell Byers that he would drop out if there were “any indication whatsoever” that his role would tip the election to Trump, but that it’s too soon to make that call.

Starbucks as a model

Schultz was, however, more persuasive in advocating for the ethical capitalism he’s tried to install at Starbucks. The company not only provides health insurance, even for part-time employees, it also gives its workers stock options and, since 2014, has offered some college-tuition payments.

At a later event Saturday hosted by the Austin chapter of Entrepreneurs’ Organization, Schultz shared some context from his childhood—how his father was laid off after being injured on the job.

“I witnessed at a very young age the fracturing of an American family,” he said. He described part of his mission at Starbucks as “trying to build the kind of company my father never had the chance to work for.”

Schultz recalled the shame he felt at having to order massive layoffs in 2008—“I cried that day”—and mentioned how he left two empty chairs at board meetings to represent a Starbucks customer and an employee. That moment evoked a different politician. Not Trump, but Sen. Elizabeth Warren (D.-Mass.), who has set out an ambitious corporate-responsibility agenda and defended that in a SXSW talk Saturday afternoon.

One of Schultz’s applause lines at both events could have come from the senator’s mouth: “Success is best when it's shared.”

Email Rob at rob@robpegoraro.com; follow him on Twitter at @robpegoraro.