business news in context, analysis with attitude

Starbucks CEO Howard Schultz has made the case that American corporations ought to shut the door on any and all political contributions until President Barack Obama and the US Congress reach “a fair, bipartisan deal ... that sets our nation on stronger long-term fiscal footing.”

Schultz said that as of now, that is Starbucks’ policy. And in fairly short order, he said, 50 other CEOs contacted him and agreed to take the same position - no personal or corporate contributions until Washington gets its act together.

Bloomberg reports that “among the recipients of Schultz’s e-mail were NYSE Euronext CEO Duncan Niederauer and Bob Greifeld, CEO of Nasdaq OMX Group Inc., who in turn e-mailed letters to companies listed on their respective exchanges.”

Schultz made the case in an email to Starbucks employees as well as in a series of press interviews, expressing frustration with the gridlock and inability to compromise in Washington.

The statements came as investment guru Warren Buffett wrote a New York Times op-ed piece suggesting that the government needed to stop “coddling” the super-rich and raise taxes on millionaires and billionaires. “I would raise rates immediately on taxable income in excess of $1m,” Buffett wrote. “And for those who make $10m or more – there were 8,274 in 2009 – I would suggest an additional increase in rate.”

In his email, Schultz wrote:

Our country is better than this.

Over the last few weeks and months, our national elected officials from both parties have failed to lead. They have chosen to put partisan and ideological purity over the well-being of the people. They have undermined the full faith and credit of the United States. They have stirred up fears about our economic prospects without doing anything to truly address those fears. They have spent a resource even more precious than the dollar: our collective confidence in each other, in the future, and in our ability to solve problems together.

As leaders in business, we have watched all this unfold, first with frustration and then with dismay. Like so many of our employees and customers, we are gravely concerned about the current situation. Today, with both humility and urgency, we propose to do something about it.

First, we aim to push our elected leaders to face the nation’s long-term fiscal challenges with civility, honesty, and a willingness to sacrifice their own re-election. This means not kicking the can anymore. It means reaching a deal on debt, revenue, and spending long before the deadline arrives this fall. It means considering all options, from entitlement programs to taxes.

This is what so many common-sense Americans want. That is why we today pledge to withhold any further campaign contributions to the President and all members of Congress until a fair, bipartisan deal is reached that sets our nation on stronger long term fiscal footing. And we invite leaders of businesses – indeed, all concerned Americans – to join us in this pledge.

We also believe in leading by positive example. And we believe that while the long-term fiscal challenge is serious, even more painful to millions of Americans today is the immediate crisis of jobs. Tens of millions are unemployed and underemployed. Right now our economy is frozen in a cycle of fear and uncertainty. Companies are afraid to hire. Consumers are afraid to spend. Banks are afraid to lend. Record levels of cash are piling up in corporate treasuries, idling. That cash is not being used to expand operations, train new workers, underwrite new ventures, or spark innovation.

The only way to break this cycle of fear is to break it. The only way to get the country’s economic circulatory system flowing again is to start pumping lifeblood through it. That is why we today issue a second pledge. Our companies are going to hire. We are going to accelerate growth, employment, and investment in jobs.

We do this because we want to set in motion an upward spiral of confidence. We are not waiting for government to create an incentive program or a stimulus. We are not waiting for economic indicators to tell us it’s safe to act. We are hiring more people now.

We invite leaders of businesses across the country to join us in this pledge as well – and to bring their stakeholders into the effort. Confidence is contagious. The best thing we can do now is to spread it.

This is a time for citizenship, not partisanship. It is a time for action. We don’t pretend that our two pledges are quick fixes. We just believe that in this moment of great uncertainty, the government needs discipline, the people need jobs – and leaders need to lead.

Our country is better than this. Let’s get things moving now.

KC's View:
If the theory is that money fuels politics, and politics is becoming increasingly poisonous, then perhaps one way to reduce the vitriol is to cut off the fuel supply.

It’ll be interesting to see if Schultz’s and Buffett’s positions gain any traction. I’m sure there will be plenty of other arguments against it, but here at MNB, the Schultz “a time for citizenship” call is persuasive.

Not that it counts for much - if anything - but MNB is right now pledging to not make any personal or corporate donations until both parties and both ends of Pennsylvania Avenue get their acts together.

So here’s my memo to Schultz: You now have 51 companies to put on your list.