We do not know if a third-party presidential run by former Starbucks CEO Howard Schultz would throw the 2020 election for President Donald Trump. Professional Democrats, of course, are terrified by this prospect.
But the fact that Schultz can imagine running for president only as a long-shot third-party candidate demonstrates something critical — and frequently overlooked — about his brand of politics. Schultz hails from an aging, elite enclave in which the conventional wisdom of the 1990s remains the foundation of all political truth. It is a world where balanced budgets, low taxes and government spending cuts animate the top minds among Republicans and Democrats alike. But in the 21st century, the 1990s are a political death sentence.
In a “60 Minutes” interview that aired on Sunday, Schultz reeled off a list of complaints about contemporary politics cryogenically preserved from 1995. “What the Democrats are proposing is something that is as false as the wall,” he said. “And that is free health care for all, which the country cannot afford.” The bean-counting billionaire said he would not have cut corporate taxes as much as Trump did but refuses to say whether he would raise corporate taxes as president.
“I look at both parties, we see extremes on both sides,” Schultz said. “We are sitting today with approximately $21.5 trillion of debt, which is a reckless example ― not only of Republicans but of Democrats as well ― as a reckless failure of their constitutional responsibility.”
Schultz is distressed that the current administration locks children in cages and leaves them to die, but he finds the prospect of Democrats authorizing spending on health care comparably troubling. Back in Bill Clinton’s presidency, Schultz would have been toasted as a great mind for making such pronouncements. Everyone, it seemed ― Clinton, then–Federal Reserve Chairman Alan Greenspan, then–House Speaker Newt Gingrich — agreed: Low budget deficits would boost Wall Street’s confidence in America’s fiscal sustainability, bringing down interest rates and boosting economic growth. Since the government was too clunky and inefficient to spend money wisely, according to this orthodoxy, it was best to get deficits down through spending cuts, rather than tax increases, although a slight hike for the richest households could be stomached for the sake of appearances. It was very nice that bleeding-heart liberals wanted to spend money to alleviate poverty and treat the sick, but ultimately, most people would be better off with smaller deficits.
The problem with this story is that it isn’t true. Despite endless prophecies of debt apocalypse during the George W. Bush and Barack Obama years, fiscal armageddon has steadfastly refused to arrive. “Economists increasingly recognize the benefits of budget deficits,” noted Stephanie Kelton, an economics professor at Stony Brook University. “Deficits are an important policy tool, especially at a time when global growth is slowing.”
Schultz hails from an aging, elite enclave in which the conventional wisdom of the 1990s remains the foundation of all political truth.
In fact, economists have been distancing themselves from these 1990s relics for quite some time. “The tide of expert opinion is shifting the other way from this ‘Old View,’ to almost the opposite view,” wrote Jason Furman in 2016. Furman, a thoroughly conventional economist in the Clinton administration, was also a thoroughly conventional economist in the Obama administration. By the end of Obama’s presidency, the conventional wisdom had changed.
If his “60 Minutes” interview is any indication, Schultz isn’t very good with numbers. His $21.5 trillion debt monster is an exaggeration: It includes trillions of dollars the government owes to itself. As of the third quarter of 2018, the total debt held by the public was about $15.8 trillion. And he is simply wrong about the affordability of “Medicare for all.” Even the Mercatus Center, a think tank funded by Charles and David Koch, found that Sen. Bernie Sanders’ single-payer health care plan would actually lower total health care costs.
But the fundamental problem for Schultz isn’t his ineptitude with calculators. It’s the way ordinary Americans think about politics in the 21st century. Polling consistently indicates that a majority of Republicans support “Medicare for all.” Among Democrats, support hovers around 80 percent. Few political ideas are so popular. As he vacillates on tax hikes for the rich, 59 percent of voters surveyed said they favor increasing the marginal tax rate on the highest-income Americans to 70 percent — including 60 percent of independent voters, 57 percent of Southern voters and 56 percent of rural voters.
If there were a large constituency for what he is offering, his easiest path to the White House would run through a major political party. No third-party candidate has ever won the presidency, and only an ego fueled by enormous amounts of money is capable of believing that will change in 2020.
The Schultz trial balloon is ultimately a sign of the elite center flailing to maintain its grasp on power in the populist world shaped by the 2008 financial crisis. Ask Emmanuel Macron.