April 05, 2019

Howard Schultz

Former Starbucks CEO Howard Schultz discusses his potential run for president as an independent, his case for centrists politics, the backlash he has received from Democrats about his potential candidacy, and how he responds to the criticism that he could help get President Trump re-elected.

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He’s the billionaire businessman who says America is ready for a change, this week on ‘Firing Line.’

Raise your hand if you think the government is doing well for you.

Not a single hand.

From his humble roots in Brooklyn, New York, Howard Schultz rose to the top by building one of the most famous brands in the world, using Starbucks to promote social change, healthcare for part-time employees, and free college tuition.

And to our 330 Starbucks College Achievement Plan graduates, so proud of you.

Now the lifelong Democrat is considering a bid to become the nation’s chief executive as an independent.

You can’t beat the system, can you?

Well, I think I can beat the system if I decide to run.

Leaving some Democrats worried he’ll hand the presidency to Donald Trump in 2020.

All it can do is embolden Donald Trump.

None of us should go to Starbucks until he announces he’s not running.

What does Howard Schultz say now?

‘Firing Line with Margaret Hoover’ is made possible by… Corporate funding is provided by… and by…
Howard Schultz, welcome to ‘Firing Line.’

Thank you for having me on.

For more than two decades, you were the chairman, the CEO of Starbucks, a company that you built, in your words, from the ground up.

Mm-hmm.

And you have, beginning in January, stirred the pot…
You think so?

…by announcing that you are exploring the candidacy for the president of the United States as an independent centrist candidate outside the two-party system.

Correct.

It’s been nine weeks, approximately, since you made that announcement.

Mm-hmm.

How do you measure your success thus far?

Nine weeks does not make a long opportunity to assess what’s really taken place.
But I will tell you this — I’ve traveled the country.
I’ve been in a different city almost every day over this period.
And mostly, I’ve heard from people who are dissatisfied, exhausted, and, at times, disgusted by the broken political system and the government’s inability to solve the problems and the challenges the American people are facing.
Now, clearly, I was met with a barrage of — an assault, almost — most probably from the Democratic party.
I don’t know exactly.
Which is interesting unto itself when I built a company that not only succeeded commercially but gave healthcare ownership and free college tuition to every employee, and at the same time, established a global enterprise carrying the American flag and American values.
But the short answer to your question is, it’s gone very well, from my perspective, and inspired me to continue to proceed.

Who’s buying the message?

The vast majority of Americans who feel as if the Democrats are so far tilted left and Republicans are so far tilted right and certainly don’t trust the government.

If it’s going so well, do you anticipate that you’re gonna run?

By the end of spring, early summer, my wife, Sheri, and I and our kids will make a final decision.

What’s gonna convince you to do it?

We’ve been studying with great discipline the pathway to 270.
I think, at this point, given how far left the Democratic party has gone —
270 electoral votes, which means, as an independent centrist, you believe that there’s a pathway through the Electoral College…
Yes, exactly.

…to win the presidency?

We’ve done the work to basically put us on the ballot of every state.
I can tell you that unequivocally.

Mm-hmm.

So, at this point, I’m cautiously optimistic.

If you ran as a Democrat, do you think that you can navigate the Democratic primaries and caucuses?

Well, I appreciate the question, but I don’t recognize what the Democratic party stands for anymore.
I don’t believe that free college, a job for everybody, and Medicare-for-all, which would take 180 million people off of their employer insurance, is the right way.
It’s not only that the Democratic party has gone far too left, it’s the fact that both parties are not representative of the American people, and the system is broken.
It’s corrosive.
It’s corrupt.
The system is not working.

Why doesn’t the system work?
Why is it broken?

It’s broken because both parties are beholden to special interests, self-preservation.
They would rather have political issues as a wedge as opposed to solving a problem.
So, let’s just list a few things.
We’re $22 trillion in debt.
That is an immoral issue that both parties are complicit with.
We have an immigration problem that goes back 20 years.
President Obama and President Bush both submitted immigration policies that should’ve been embraced, but it wasn’t.
We have a healthcare crisis, we have an education crisis, our standing in the world — all of these things are old problems that haven’t been solved for decades because both parties are not in business, every single day, waking up, caring for and solving Americans’ problems.
And there’s such a lack of leadership and truthfulness in the system.

What about this moment to you says, ‘This is the moment for an independent centrist candidate’? I mean, certainly —
Well, this is a moment of disruption, of transformation, and opportunity because the American people are fed up.

What’s your evidence that the American people are fed up?

Well, with 100 million people not voting in 2016 and a choice coming to the American people that could very well be a socialist-leaning Democrat in the form of Bernie Sanders, Elizabeth Warren, Kamala Harris, Beto O’Rourke — you name them — and President Trump, is there any evidence that anything is gonna improve, regardless of the outcome?
And the answer is no.

So why do you think the center hasn’t held yet in American politics?

Because there hasn’t been a legitimate choice and no one’s represented the center for quite some time.
I mean, this show has —
When was the last time there was somebody who really occupied the center?

Well, I think you got to go way back.
It’s not so much occupied the center as a person occupying American values.
So, President Johnson and the Great Society demonstrated a level of empathy and compassion for African-Americans that was led by a white president.
It was a centrist position.

Mm-hmm.

President Reagan established both immigration and the fact that every American deserved an opportunity to go to an emergency room, regardless of your opportunity to pay.
His cooperation with Tip O’Neill demonstrated a centrist opportunity in which both parties were doing things on behalf of the American people.

Although Reagan didn’t come at it from a centrist position.
He came from a conservative position, and then, through leadership of working through compromise, right?
Principled compromise.

Yeah, you just mentioned the word — leadership.
Servant leadership, caring for the American people.
When’s the last that we’ve seen that?

Are you interested in building a centrist architecture and infrastructure that goes beyond the presidency?
And how do you persuade people that you’re the one to do that?

First of all, I’m not a messiah.
I’m one person who loves the country and is deeply, profoundly concerned about the direction we’re going.
I do believe that there are millions of Americans who agree with me, from all walks of life.
There are good people on both sides of the aisle who can’t vote their conscience and their heart because of the ideology of both parties and the pressure if they do not follow the rules of the party, they will be primary’d out.
If an independent person could get to the White House, these people would come out of that ideology.
I also think you will see a plethora of independent candidates run for office at all aspects of government.

So you believe it has to go top down.
You have to win the presidency, and then that can be the watershed moment that empowers an independent architecture?

I think the catalyst is the Oval Office, and the reason for that is, the president in the Oval Office establishes the character, the tonality, the morality of the country.
And look at our situation today.

There’s an argument that Howard Schultz should run for an independent senator from Washington and start building the center at the federal level rather than the executive.

I don’t think we have the time when we have $22 trillion of debt.
We have the planet that is burning up.
We have a healthcare crisis in the country that is a runaway problem.
We have K through 12 education, and we’re almost 30th in the world.
We have a situation with China and North Korea that is bubbling up.
I can go on.

You say you’re not a messiah, but why is it you?

Well, uh, why is it me?
It’s not about destiny.
It’s about the courage of my conviction to try and be the leader that I have been in a company.
I’ve spent the last 18 months thinking this very carefully.
I put myself in a position to do this.
I’ve funded it myself thus far.

Will you fundraise, or will you self-fund?
One of the arguments Donald Trump made is, ‘I don’t need money from anybody else.
I won’t be beholden to anybody else.
I’m gonna pay for it myself.’

Yeah, he did say those things, but then he’s beholden to every Republican self-interest known to mankind.

Recently, you were in Nashville.
I’d like to play a clip and have you respond to it.

I have a feeling I know what this clip’s gonna be.

I’m sure you do.
They were chanting for billionaires for president.
And you are self-made.

I’m self-made.

You didn’t inherit your wealth.

I didn’t inherit any money.
Just a belief in the country from my mother.

Your father didn’t give you $300 million.

No, but I’m somewhat sympathetic to what those people were seeing, and let me try and explain that.
There is a crisis of capitalism in the country.
And I say that as a proud capitalist.
What’s the crisis?
The crisis is that, with $22 trillion of debt, the government cannot solve all the problems of the American people.
So, when President Trump came out with a 21% tax rate for corporations, I was one of the first ones out of the gate to say, ‘This is a mistake.’

Why? Does it make us less competitive?

No, it makes us more competitive, but I think there was a better way to do it.
And the better way to do it would’ve been to provide a tax rate of 25% or 26% with an incentive built in to provide health insurance, to provide training, provide college tuition.
Give an incentive, because businesses and business leaders need to do more for our people and the communities we serve.
And since President Trump, in a sense, has provided such a degree of immorality and a lack of character, lack of civility, lack of dignity in the White House, he has established for many people what it means to be wealthy in this country.
That is not me.
I mean, I could not be more different than Donald Trump in every aspect, especially as a businessperson.
I’ve been a public CEO for almost 30 years where I have fiduciary responsibility, and I did two things.
Our stock price is up 25,000% while giving free college tuition, healthcare and ownership to every employee, and building a global enterprise in 77 countries.
Donald Trump had no constituency whatsoever than himself and his family.
And as you know, he’s got a degree of conflict of interest that is greater than any president in the history of our country.
So, the comparison is a false narrative.

Speaking of Donald Trump, the Attorney General has recently summarized Robert Mueller’s report in a four-page letter that he sent to Congress, and hopefully that full report will be released.
But do you accept the Attorney General’s conclusions that there was no collusion with the Russians?

Well, I have not read the report.
I think the American people have a right to read every word and every sentence in that report.
And when that occurs, we will know.

But do you accept the conclusion of the Attorney General?
Do you think the Attorney General would misrepresent the conclusions in the Mueller report?

I have to believe that the Attorney General is telling the truth.
But having said that, we should recognize that Russia is an enemy of America and has worked very hard and has done a very good job of disrupting our democracy and our election process, and this president has turned a blind eye to that, which is very, very dangerous for us as a democracy.

Another foreign-policy question deals with China because you’ve spent a lot of time in China.
This extraordinary statistic that a Starbucks opens up every day in China.

Yes, that’s true.

One of the things our intelligence agencies also agree on is that China is a rising authoritarian threat to the long-term and even short-term interests of the United States.

Right.

How do you see China and the United States’ geopolitical relationship with China and our security?

I think this is really an important question.
First off, Starbucks has been in China for 20 years, and I’ve traveled to China perhaps more than any other public CEO in the last decade.
I don’t think China, unlike Russia, is an enemy of America, but I think China is a fierce competitor, and China has an eye on becoming and displacing us as the number-one economic power in the world.

What about militarily?

Which is a danger to us, in terms of our standing in the world, our foreign policy, and our safety and security.
And so I think we have to deal with China very — with great effectiveness, diplomacy, statesmanship.
I do not believe the current policy of this trade and tariff war is the right approach to China, but I do believe we need to be very tough with China on human rights, on currency manipulation, on trade, obviously.

‘Tough with China’ — does that mean preventing China from superseding us in terms of research and development, intellectual property, and all of the things that would give it the security and economic advantage over the United States?

100%. 100%. And we should be unleashing every aspect of innovation, technology, and resources we have to make that happen.
Your viewers should understand that China holds over a trillion dollars of our debt.

Would you call yourself a deficit hawk?

I would.
And I’ve been talking about this for a decade.
I’ve been talking about this when it was at $10 trillion.

Yeah.

The other issue is that the Republicans were banging on President Obama for eight years — Boehner, McConnell, and Ryan — about the debt and the deficit.
Now we have a Republican president.
Where are the Republicans?
Where are your conservatives?

Explain why this matters to an average citizen.

Yeah.

Because as you know, the conservative movement built an entire pillar around fiscal responsibility and championed it for a good 60 years.

Yes.

And then, as far as I can tell, has completely abdicated this series of principles.

Not only abdicated it but is adding a trillion dollars a year and $500 billion of interest.
Why it’s so — It’s two things.
One is, it’s economically a disaster for the United States because we will not have the resources to invest in the things that we need, especially in competing with China.
That’s just one issue.
But it’s immoral.
Why is it immoral?

Why is it immoral?
Because we need a candidate who can make the case that there is a moral imperative to the debt and deficit.
But the new generation has forgotten it.
There’s no constituency for fiscal responsibility, it seems.

Well, it’s immoral because — You have children?

Yes.

Okay. So, I have two grandkids and one on the way.
It’s immoral because the United States of America will not be able to invest in their future, and they are gonna be saddled with this level of national debt.
And by the time President Trump hopefully gets out of office in 2020, the debt will be closer to $25 trillion, larger than the U.S. economy.
We have never been in this situation before.
And so, at some point, this thing is going to blow.
The two parties have been complicit in equally, recklessly adding to the deficit and the debt — both parties.
But this has been a Republican issue for decades, and I just ask rhetorically, ‘Where are they?’

I agree with you.
I don’t know where they are.
But here’s my question back to you.
How are you gonna be able to do it if they built an entire party and movement around it and couldn’t?
How are you gonna be able to do it instead?

If I run for president and am fortunate enough to get elected, unlike a Democrat or Republican who goes into the Oval Office, I don’t walk in there with a fixed enemy.
In fact, I walk in there saying, ‘Listen, there are good people on both sides of the aisle.
There are good ideas from both sides.
I’m willing to work with both.’
But my agenda is going to be to rebuild trust and confidence with the American people to specifically go after the debt and the deficit, to restore our standing in the world, and most importantly, restore confidence in the promise of the American dream.

The liberal or progressive side of the Democratic party believes the way to restore confidence is by buying things for people — by paying for free college, having universal healthcare, guaranteeing a job.

Yeah.

When you were the CEO of Starbucks, you partnered with Arizona State University to offer free college tuition for some of your employees.

All, actually, now.

Now it’s all of your employees.
Can you explain, how is that fundamentally different than free college for all?

First of all, there’s nothing free.
We should establish that.
So, someone is gonna pay.
And who’s gonna pay for all this free stuff?
Not only the wealthy but everyone’s taxes are gonna go up.
My company demonstrated that we could be financially successful, reward shareholders, and achieve the fragile balance between humanity and financial performance.
I think every business in America can do that and has a responsibility, in one way or another, to do that.
And that should be a transformation of what of capitalism should be in the future.
All these other Democrats that are running for president, who are espousing all these things that are not feasible, that are fantasy, I have done it.

Is one of the keys to a platform for a centrist independent candidacy calling on the civic sector and the private sector to step up and carry the weight of what the far left says should be the responsibility of government?

Well, I think the transformation of the country has to be an understanding that government can’t solve all our problems, unlike what the Democrats are saying, that there has to be a partnership between business, philanthropists, nonprofits, and the government.
You know, when I hear Bernie Sanders and Elizabeth Warren and this young, very talented congresswoman who — I think these are all well-intentioned people who love the country, but their policies are just not — they’re not real.
Free college, free jobs, Medicare-for-all — it’s not gonna happen.

Somebody who has a very similar pedigree to you, in the sense that they are self-made and they’re a billionaire, is Mike Bloomberg.
There’s a report that Mike Bloomberg is reconsidering his decision not to run for president and may run as a moderate Democrat, not as an independent centrist.

Yeah.

Where is his thinking wrong about the viability of a moderate Democrat?

Well, I can’t speak for Mayor Bloomberg, who I have tremendous respect for.
I wasn’t surprised when, a month or two ago, he decided that he was not gonna run, because when he looks at the math, there’s no room for him as a centrist Democrat in a party and a platform that —
This is the calculation you came to.

Yeah. But my calculation was also based on the two-party system.
I’m sure that the recent talk is linked to whether Vice President Biden is gonna run or not.

Do you think the accusations about Joe Biden are unfair?

I don’t know if they’re unfair or not.
I think, for these women who are coming out and talking about this, there’s no reason to believe they’re not telling the truth.
I know Vice President Biden, I respect him, he’s a good man.
I don’t know whether he was gonna run for president or not.
I suspect that Mayor Bloomberg’s decision to rethink this is directly linked to that.

If it’s true what these women say about Biden, do you believe it’s disqualifying or should be disqualifying for Vice President Biden?

I think he’d have to answer that question for himself, and the American people have to answer that.
But certainly, I think it’s a very big problem.

There’s a different standard for Democrats and Republicans, it seems.
President Trump has sustained —
Well, it’s a different standard for President Trump.

Why?

I don’t know the answer to that.
But let’s see if it’s a different standard in 2020.
That’ll be the test.

This program aired for 33 years by a single host, William F. Buckley Jr.
And he covered almost every topic.
So, he covered the idea of an independent centrist candidate in a program here with a guest you’ll recognize in a discussion about Ross Perot.
Let’s play the clip.

Mm.

How do you win in a way that Ross Perot couldn’t?

Very different time.
We have to recognize that the country is much more divided than it was in 1992.
The American people do not trust Congress and do not trust this president.
I also believe that the ideology of both parties, as we talked about earlier, is not representative of the vast majority of Americans who are looking for an answer.

The cry from the Democrats — at least moderate Democrats — is that you will give the election to Donald Trump.

They want you to believe that.

Does your candidacy only work if the left nominates a progressive?

I think the math, for me, certainly works better if there is a far-left nominee.
However, it is a false narrative completely, with regard to me siphoning votes away from Democrats in re-electing Donald Trump, and the reason is, there are lifelong Republicans who have been Republicans forever, who perhaps have never voted for a Democrat, who are not gonna pull a lever for Bernie Sanders or Elizabeth Warren.
But they do not want to pull that lever for someone whose character, morality, lack of civility is so inconsistent with the Republican party.
So if I’m in the race, there is a great chance that I will pull more votes away from the Republicans than the Democrats.
The character issue of Donald Trump is gonna come home to roost in 2020 with millions of Americans.
If they have — If they have a different choice.

That is what you believe.
Where is the evidence that that’s the case?

Well, the evidence is that Donald Trump is not a trusted president.
The evidence is that Donald Trump has made all of these promises.
What’s happened in West Virginia?
What’s happened to the manufacturing jobs?
What’s happened to the millions of Americans who he promised a better life?
He’s gonna have to run on his record for the first time.
And we’re gonna make that record very, very visible to the American people.
And he’s not gonna be able to deny it.

There are so many people who want to believe what you’re saying, but where do you see the evidence that it will be enough to carry you over the finish line?

The evidence is, I believe in the goodness and kindness of the American people.
And if given a choice between a far-leaning left, socialist-type person running for the Democratic party and re-electing an immoral person whose character and lack of civility is inconsistent with how they raise their children, and we can provide an opportunity for someone to see that I have run a global organization and balanced profit with conscience and humanity and are willing to solve serious problems today and bring the two parties together, we have 18 months to prove that case.

Howard Schultz, thank you for coming to ‘Firing Line.’

Thank you.
Thanks for the opportunity.

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