Promethean News

A Private Solution for a Public Problem

A Private Solution for a Public Problem

By Brett Solimine

 

The economy is still in dire straits. Not only do we maintain high levels of unemployment and low productivity growth, but the troubles in Europe are looming over us like a new crisis waiting to happen. To make things worse, our current government consists of a partisan dichotomy that seems virtually incapable of agreeing on any single decision for our country moving forward. At the time when we need unity the most, we seem to have the largest deficit of it. People can wonder, endlessly, where the leadership and innovative thinking will come from in such a world.

 

This is where Howard Schultz steps in. Schultz is the chief executive officer of coffee giant Starbucks, taking this position in 2008 after the previous chief, James Donald, stepped down. Schultz joined the firm much earlier, however, in 1982 when Starbucks could only boast of four stores.

 

Schultz is particularly known for his outspokenness, particularly during this year. In August of this year, while recovering from surgery, he sent a letter to the employees of Starbucks titled “Leading through Uncertain Times,” where he lambasted politicians for putting “partisan agendas before the people’s agenda.” He went even further, stating, “this is not the leadership we have come to expect, nor deserve.” Later that week, he announced an idea: a concerted effort on the part of average citizens and large businesses alike to stop making political contributions until Washington can work together for the benefit of our nation.

 

His logic makes sense. Politicians, in reality, work for political contributions, and it is no secret how important these contributions are to each and every elected official in Washington. If they are not going to represent the people, the people should not support them.

 

Ok, his idea may be a bit outrageous. Surely people will continue to give to politicians for their own self-interest. It is a sad fact, but that is how many things get done in this nation and it won’t change any time soon. Schultz may have realized that himself, and being who he is, his ideas did not stop there.

 

Schultz was also disturbed about the fact that many small businesses could not get the credit they need to expand, which then allows them to hire new workers. How can the economy recover with such a dynamic? Schultz came up with a second idea: allow customers to donate into a fund which will be loaned to small businesses and underserved communities through facilities called Community Development Financial Institutions (CDFIs).

 

The idea is simple, but potentially genius. Customers can give money to Starbucks, and this money will then be lent to entities which cannot find credit elsewhere. If a customer gives five dollars or more, they receive a wristband that says “indivisible,” a reference to Pledge of Allegiance and a call for the nation to remember the word. The money donated is then leveraged, 7-1, creating even more loanable funds. What this means is that if a customer donates five dollars, thirty five dollars of loanable funds are created. This idea has the potential to actually make a difference.

 

Howard Schultz is what our country needs, a smart and ambitious person creating real ideas on how to help the country move forward. The real beauty of his particular ideas is that they can be carried out by any one of us. Business writer Joe Nocera sums up Schultz and his efforts in the best possible way. His ideas are “hardheaded and practical…the kind of idea[s] you would expect from a good businessman,” and “it’s time we took matters into our own hands.”