If Howard Schultz wins in 2020, would he be a good president?
When billionaire and former Starbucks CEO Howard Schultz announced last month that he was serious about a run for president in 2020, many choked on their vanilla lattes.
The backlash has been fierce and on Tuesday, Schultz gets an hour of primetime CNN to dispel the nation’s gag reflex.
His run really shouldn’t be a surprise. Before Donald Trump, the curriculum vitae of a presidential candidate always included at least a flirtation with elected office. Post-Trump the non-political super rich see no reason why they can’t add the White House to their property portfolio. And for Schultz, worth $3.5bn according to Forbes, money is no object.
Candidates who spend more tend to win more. Thanks to a 1976 supreme court ruling on campaign finance spending, the sky’s the limit on how much of their own fortune candidates can spend on their own campaigns.
But just because billionaire tycoons can afford to run for president, does that mean they should?
According to John Quelch, dean of the University of Miami Business School, the answer is no. “Founder billionaire CEOs may be visionary and tenacious but they do not make good politicians,” said Quelch. “They are used to getting their own way, not to building consensus.”
There’s certainly a rare consensus in Washington over Schultz’s plans. Trump has said Schultz “doesn’t have the ‘guts’ to run for President!” and Democrats say his presidential run could leech votes from their party and help re-elect Trump.
But if he does run – and win – would he be any good?
According to John Paul Rollert, adjunct assistant professor at the University of Chicago Booth School of Business, Schultz has certainly nailed “management 101” given his success at Starbucks. But that doesn’t necessarily translate to working well with Congress. “When you can’t replace people or promise them an increase of salary, you fall back on pure powers of persuasion,” said Rollert. “I don’t know whether Schultz has such powers, but the fallacy that many CEOs labor under when they enter government is the belief that government can be run like a business. It can’t. Democracy is not a business, especially when coupled with American system of divided powers.”
Not yet an official candidate, Schultz’s past is already being pored over for signs he may not be up to the job.
Starbucks’ record on taxes under Schultz may come back to haunt him. Multinational companies such as Starbucks and Amazon were apparently paying less tax in Austria than one of the nation’s curbside sausage stands.
During Schultz’s time at Starbucks, the coffee giant was also unabashedly anti-union and was found to have illegally fired three workers in 2008 for their union activities. Moreover, the National Labor Relations Board found Starbucks guilty of issuing unfavorable work evaluations of those employees – or “partners”, as they’re called – who supported unions.
Starbucks has also made it impossible for employees to defend themselves in court by having them sign arbitration agreements as a condition of their employment. By doing so, Starbucks can bury wage disputes or claims of sexual harassment and racial discrimination.
Schultz’s record as a participating voter is also questionable. Despite calling himself a “lifelong Democrat” Schultz voted in less than a third of state and county elections and didn’t bother to vote in crucial midterms, such as 2014, which saw the Republican party gain the Senate during Obama’s second term.
Nor is his charitable giving much to shout about. Schultz donated less than 1% ($18,065,864) of his estimated fortune to his charity, the Schultz Family Foundation, in 2017.
Regardless, Schultz’s tenure as Starbucks CEO is unlike others in the Fortune 100, according to Timothy Hubbard, assistant professor of management at the University of Notre Dame. “I believe he was able to show himself that companies can be financially successful while being socially responsible. That’s quite a different experience than other CEOs.”
Hubbard said Schultz’s policies, if elected, would likely be businessfriendly while pushing the boundaries of social programs. “The combination of financial and social success in business is in stark contrast to President Trump’s experience before coming into the White House,” said Hubbard.
Schultz grew up modestly in Brooklyn, New York, and was the first person in his family to go to college, earning a bachelor’s in speech communication from Northern Michigan University.
In 1982, he joined Starbucks as the director of marketing. By 1988, through the help of investors (including Bill Gates) he purchased Starbucks, where he presided as CEO until 2000, and again from 2008 to 2017.
Through his tenure as CEO, Schultz played the “caring capitalist”. He has been a supporter of same-sex marriage, spoken out on climate change (calling it a serious threat to the “quality and integrity of coffee”), and has put his philanthropic efforts towards helping veterans and the homeless in Washington state. In 2014, Schultz rolled out the Starbucks College Achievement Plan, which allowed all employees to earn a tuition-free bachelor’s degree at Arizona State University.
After Trump restricted entry into the US from seven predominantly Muslim countries the first month of his presidency, Schultz announced that Starbucks was committed to hiring 10,000 refugees by 2022.
Even so, says Rollert, the reasons for wanting to make the leap from a socially conscious CEO to president of the United States are both charitable and uncharitable – and both stem from ego.
“As a highly successful CEO, someone like Mr Schultz, buoyed by a passion for public service, might believe that he possesses the skills and experience that would make him uniquely qualified to run the executive branch,” said Rollert.
He added that since Schultz comes from a place beyond politics, he holds no historical commitment to principles, politicians or party positions that might limit his flexibility in office.
“The less charitable answer is that, when you can buy everything, obtaining something that money can’t buy (at least not directly) is a challenge that may appeal to someone in Schultz’s socio-economic position,” Rollert continued. “Say what you will, being president is pretty cool, and it costs a lot less than a first-rate art collection.”
As a longtime Democrat, Schultz endorsed candidate Hillary Clinton in 2016 and was apparently her pick for secretary of labor, according to a report from the news site Axios.
But Schultz’s recent criticism is that Democrats have moved too far left. He called Democratic candidate Elizabeth Warren’s plan for a 2% annual tax on those worth over $50bn “ridiculous” and slammed Alexandria Ocasio-Cortez’s proposed 70% tax rate on those earning over $10m a year.
While Starbucks has been offering health insurance to its employees since 1988, Schultz said that Medicare for All is “unaffordable” and not American.
In a divided America, is there room for Schultz as a CEO president to take the center lane?
Rollert looks to political strategist Bob Shrum, who advised taking the presidential nomination of a major party. “Either the Republican will win, or the Democratic will win, so if you’re on either side the divide, the odds of your success are a lot better than winning the Powerball [lottery],” said Rollert.
For a third-party candidate, however, victory is a crapshoot. “With no institutional support of a national political party, someone like Mr Schultz has to get on the ballot in 50 states and connect with enough voters to win at least the electoral college,” Rollert said. “Could he prevail? Sure, but I think I’d rather take my chances on the Powerball.”