Starbucks CEO: "Crisis of leadership" in DC
EAST HAMPTON, N.Y. - Howard Schultz is CEO of Starbucks, a Fortune 500 company with 200,000 employees worldwide. More than half of them are in this country. Thirty-six thousand were hired this year alone.
CBS Evening News anchor Scott Pelley reports Schultz has challenged other CEOs to step up their hiring, and to join him in withholding campaign contributions to Washington incumbents.
Schultz says that instead of giving campaign contributions to politicians, his fellow CEOs should use the money to create more jobs.
Howard Schultz: We have to understand that the problem we have in America today, unemployment, the fracturing of consumer confidence, the lack of lending - all of these things are tied, unfortunately, to the dysfunctionality and the ideology of separate agendas in Washington.
Scott Pelley: Well, in Washington the Democrats believe that they have it right. The Republicans believe that they have it right and this is a battle of ideologies to see who wins.
Starbucks CEO calls for boycotting campaign contributions
Schultz: Well, that's not how I see it. We have a crisis of leadership in Washington right now. And we need to literally put our feet in the shoes of American people. They're not worried about ideology. They're worried about schools for their kids, jobs, housing. This is a problem that is not based on partisanship. This is based on citizenship.
Pelley: How do you create jobs in this country?
Schultz: I would beg Congress and the administration to achieve a long-term debt ceiling deal that removes the crisis of confidence in the markets, in the economy, and in the rest of the world. I don't believe that Congress fully understands the impact that has been achieved as a result of the fracturing of confidence in Washington.
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Pelley: Fracturing of confidence, what do you mean by that?
Schultz: Well, right now you've got about a trillion dollars sitting on the balance sheets of public companies in America - a trillion dollars.
Pelley: This is cash they have on hand?
Schultz: Yeah probably record numbers of money in the last two, three decades. The question is why isn't that money being invested back in America which ultimately would produce jobs? And the only reason is because of the anxiety and the uncertainty that exists with regard to the political system.
One thing Schultz says Washington could do is support U.S. manufacturing - now shrunk to just nine million workers.
Schultz: Can you believe that? I mean, that's a stunning statistic. Now why? The reason is because everything we buy, everything we wear, everything we look at has a label on it that says made in China, made in Taiwan - made somewhere else.
Now I don't want America to become an isolationist, but I want to become proud again to encourage American manufacturing. Which means we're gonna have to give an incentive for small and large companies to buy capital equipment and small and large companies to make things. The manufacturing base of America, down to nine million jobs, is one of the singular problems of the loss of job creation in America. We have to get our manufacturing base back.
Pelley: Why has unemployment been around 9 percent and north of there for nearly two years straight?Schultz: In my view, why unemployment has stayed over nine percent is linked directly to Washington, DC. When I examined the cost of what the election cycle was in 2008, which was more than $4 billion, and it's estimated to be in 2012, which is $5.5 billion is gonna be spent on congressional re-election and the presidential election. Just think about that - $5.5 billion when we have 9 percent unemployment in America. And people don't know where their next meal is coming from. The system is completely broken.
