The Grand Barista From The Republican Wing Of The Democratic Party Wants To Run The Show. Why Isn't He A Republican?

My guess is that most of the right of center schnooks from the Republican wing of the Democratic Party are hoping Biden will run as the alternative to a Bernie/Elizabeth Warren ticket. But there are alternatives. One of the least plausible is Howard Schultz, the Starbucks guy. What a joke! And Trump's dream come true. In New York last week, Eric Levitz urged Democrats to reject him and his radical centrism. With Democrats like Schultz there is absolutely no need for Republicans. He's more of a Republican than Trump will ever be.

Howard Schultz is the quintessential corporate Democrat. As CEO of Starbucks, Schultz preached (and, arguably practiced) the gospel of “conscious capitalism”-- a creed that insists corporations can do well for their shareholders, by doing good for the world. He supports a wide variety of progressive goals that do not involve taking money away from rich people-- and even endorses a few that do. His bona fides as a “woke” billionaire are so robust, Hillary Clinton had reportedly planned to make him her Labor Secretary.

On Monday, Schultz resigned from the board of his coffee company, and signaled interest in a potential run for president. The coffee magnate has left his precise intentions for 2020 unclear-- but he’s made his desire to influence the Democratic Party’s internal politics unambiguous.

In recent interviews, Schultz has argued that progressive Democrats have grown so rigidly ideological, they can no longer recognize basic political and policy realities.

He has also contended that the wealthiest nation in human history can’t afford to provide public health insurance to all of its citizens; that the national debt is a bigger threat to the United States than climate change; and that Democrats would be wise to demonstrate “leadership” to the electorate-- by calling for cuts to Social Security and Medicare.

“It concerns me that so many voices within the Democratic Party are going so far to the left,” Schultz told CNBC Tuesday. “I say to myself, ‘How are we going to pay for these things,’ in terms of things like single payer [and] people espousing the fact that the government is going to give everyone a job. I don’t think that’s realistic.”

Schultz went on to say, “I think the greatest threat domestically to the country is this $21 trillion debt hanging over the cloud of America and future generations... The only way we’re going to get out of that is we’ve got to grow the economy, in my view, 4 percent or greater. And then we have to go after entitlements.”

Too much coffee, not enough Stephanie Kelton. I'll make it easy for him, so he doesn't have to read a dense economic book. Last September Kelton wrote an OpEd for the L.A. Times geared right to people like Schultz:

In school, you were probably taught the order of operations, or PEMDAS: Parentheses, Exponents, Multiplication, Division, Addition, Subtraction. That mnemonic helps you handle tricky equations like this one:

(3^7 — 2 (150+136)) / (5^5 — 17 x 100).*

When Clinton asks where the money will come from, she's ordering the government's fiscal operations like so:

1. Government collects money from us in the form of taxes (T)
2. Government figures out how much it wants to spend and then borrows any additional money it needs (B)
3. Government spends the money it has collected (S)

Since none of us learned any differently, most of us accept the idea that taxes and borrowing precede spending-- TABS. And because the government has to "find the money" before it can spend in this sequence, everyone wants to know who's picking up the tab.

There's just one catch. The big secret in Washington is that the federal government abandoned TABS back when it dropped the gold standard. Here's how things really work:

1. Congress approves the spending and the money gets spent (S)
2. Government collects some of that money in the form of taxes (T)
3. If 1 > 2, Treasury allows the difference to be swapped for government bonds (B)

In other words, the government spends money and then collects some money back as people pay their taxes and buy bonds. Spending precedes taxing and borrowing-- STAB. It takes votes and vocal interest groups, not tax revenue, to start the ball rolling.

If you need proof that STAB is the law of the land, look no further than the Senate's recent $700-billion defense authorization. Without raising a dime from the rest of us, the Senate quietly approved an $80-billion annual increase, or more than enough money to make 4-year public colleges and universities tuition-free. And just where did the government get the money to do that? It authorized it into existence.

Whoa, cowboy! Are you telling me that the government can just make money appear out of nowhere, like magic? Absolutely. Congress has special powers: It's the patent-holder on the U.S. dollar. No one else is legally allowed to create it. This means that Congress can always afford the pony because it can always create the money to pay for it.

Now, that doesn't mean the government can buy absolutely anything it wants in absolutely any quantity at absolutely any speed. (Say, a pony for each of the 320 million men, women and children in the United States, by tomorrow.) That's because our economy has internal limits. If the government tries to buy too much of something, it will drive up prices as the economy struggles to keep up with the demand. Inflation can spiral out of control. There are plenty of ways for the government to get a handle on inflation, though. For example, it can take money out of the economy through taxation.

Clinton's pony was a metaphor for the big-ticket items on Sanders' agenda. Namely, tuition-free college and Medicare for all. Putting a fiscal twist on Nancy Reagan's famous catchphrase, Clinton scoffed at the price tag and warned voters to Just Say Neigh. But Americans still like Sanders' ideas: 63% support free tuition and 66% support Medicare for all. To make these policies work, all we have to do is produce enough hospitals, doctors, nurses, universities and teachers. Just imagine how high those poll numbers would climb if everyone understood how easy it would be for Congress to pony up.

If Schultz-- like Trump-- can't wrap his coffee-addled brain around that, let's go back to Levitz for a moment who tears him apart mercilessly-- and absolutely deservedly. "There is no mathematical reason," he wrote, "why the U.S. government cannot 'afford' single-payer health care. America has a higher per-capita GDP than Denmark, Canada, France, the United Kingdom, and virtually all other European and Asian nations that boast universal health insurance systems. The U.S. also has lower tax rates than most developed nations-- and spends more on its military than China, Russia, Saudi Arabia, India, France, United Kingdom, and Japan combined. There is no question that America has the means to ensure that all of its residents have high-quality, affordable health care. The fact that the U.S. declines to do so is the product of political choices not technical necessities."

Schultz’s fixation on entitlement cuts betrays either an ignorance of-- or callous indifference to-- the bleak finances of America’s retirees. The collapse of private-sector pensions-- along with the failure of wage growth to keep pace with the rising costs of health care, housing, and higher education--— has left Americans more dependent on Social Security benefits for their retirements, not less: As of 2016, nearly half of U.S. families had no retirement account savings at all, according to a report from the Economic Policy Institute (EPI). But Schultz’s radical centrism doesn’t just render him incapable of putting evidence above ideology on policy matters; it also compels him to put purity above pragmatism on the electoral front. The conscious capitalist’s combination of socially liberal beliefs (he’s pro-gun control, immigration, and gay marriage) and fiscally conservative ones (he wants to cut Medicare and Social Security) might put him at the “center” of the ideological spectrum at Davos. But those views put him on the radical fringe in the United States: According to data collected by the Voter Study Group, the percentage of the 2016 electorate that held right-of-center views on economic matters-- and left-of center ones on “identity” issues-- was a whopping 3.8 percent.

Now, look: Howard Schultz will never be president. The man is the embodiment of nearly everything that Democratic primary voters are anxious to vote against: A white male billionaire-- with no political experience-- who opposes universal health care and supports entitlement cuts.

Thus, some may reasonably feel that Schultz’s 2020 trial balloons should simply be ignored: If Democratic consultants want to sell a billionaire on a doomed, vanity campaign-- that will progressively redistribute wealth from his bank account to theirs-- why stand in their way?

But the trouble is that Schultz does speak for a real constituency. His ideology might not appeal to a great many voters, but the ones it does appeal to have great deal of money: There are a lot of coastal-dwelling corporate executives in the United States who want to vote for a political party that doesn’t threaten their gay friends or abortion rights; champions capital-friendly trade agreements; and recognizes deficit reduction as the political (if not moral) challenge of our time-- and many of them are willing to pay for the privilege of having that party on their ballots.

To this point, the Democrats’ leading lights have shown little deference to Schultz’s faction. The Center for American Progress (the Democrats’ Establishment think tank) recently released proposals for a federal job guarantee and a universal health-care plan-- while the party’s top presidential prospects in the Senate have been racing to pledge their allegiance to socialized medicine, free public college, universal child care, and paid family leave. Some of these proposals come with specified revenue sources; the majority do not. And if you try to take progressive Democrats to task for the latter fact, they’re likely to reply as Hawaii senator Brian Schatz did in a recent interview with New York: “Republicans are tactically skillful about never talking about paying for what they want, and Democrats are always very earnestly trying to satisfy the 13 people who are still doing third way work on K Street, and it’s a game that disadvantages Democrats, and I don’t want to play it anymore.”

And yet, if the Democratic Party’s wonks and 2020 hopefuls are moving sharply left on fiscal issues, its House caucus remains home to no small number of “Blue Dogs,” and “problem-solvers” who evince sympathy for “third way” verities. And given the fact that winning elections in the United States isn’t getting any less expensive, it would be unwise to assume that Howard Schultz’s point of view has become politically irrelevant, simply because it has grown intellectually unfashionable.

Progressives can’t get complacent: They must force the Democratic Party to distance itself from radical centrists like Schultz, whose divisive rhetoric-- and fringe ideology-- threatens to condemn America to another four years of Trump.

Let me add one thing-- something that should scare all progressives-- a lawsuit by a Trumpist organization against the DNC. But, believe it or not, the Trumpists aren't the bad guys in this; the DNC is. I think Republicans do the same thing but the Trumpists are suing the DNC for circumventing the law by allowing big rollers to contribute immense sums of money to the DNC, which could then funnel it into Hillary's campaign. "You had individuals giving $300,000," Dan Backer (the Trumpist) said Friday. "They’re not doing it because they care about Nevada’s or Arkansas’ state party. They’re doing it to curry favor with and buy influence with Hillary Clinton." The New York Post: "Up to 40 state Democratic parties could be implicated in an alleged scheme to illegally funnel some $84 million to Hillary Clinton’s 2016 presidential campaign, according to a new report. A federal lawsuit says the Clinton team and the Democratic National Committee went around campaign finance laws by pouring money into state parties that then sent the funds back to the DNC to help Clinton.

The FEC complaint alleges “an unprecedented, massive, nationwide multi-million dollar conspiracy” in which Dems and Clinton’s camp were “effectively laundering nearly all contributions” given to the Hillary Victory Fund.

That fund is a so-called joint fundraising committee that allowed Clinton to raise money for her campaign and local state parties simultaneously. Possible due to looser campaign finance rules, this type of fund meant Clinton could raise $350,000 or more from a single rich donor.

This is how the Democratic establishment plays the game-- against Trump... and against progressives.