My indefatigable co-blogger has already said most of what needs to be said about the folly of Howard Schultz’s embryonic third-party presidential candidacy. The idea that a billionaire with no political experience is just what we need is particularly galling amid our current disastrous experiment. And Schultz would run as a “centrist independent," which appears to mean “economically conservative and socially liberal,” but there’s not a great constituency for that.
I’d like to add an additional point about Schultz’s independent centrism. In its current form, it totally fails to achieve anything resembling the realistic middle ground between unrealistic extremes that he keeps claiming to inhabit.
NPR aired an interview with Schultz on Tuesday, during which the billionaire elaborated on his views on economic and tax policy. Schultz reiterated that he believes we must reduce economic inequality. But, strikingly, Schultz — who constantly talks about the need to tackle the deficit — refused to say directly whether under his agenda, the wealthy would have to pay more in taxes.
First, NPR’s Steve Inskeep asked Schultz this question:
Inskeep: President [Barack] Obama’s theory was that you reduce the deficit in small measure by raising taxes on the wealthiest Americans. President Trump’s theory was that you reduce the deficit by cutting taxes on the wealthiest Americans. You’re smiling. Which of either of those is true?
Schultz declined to answer directly, instead saying: “We are in dire need of comprehensive tax reform, which would include a significant level of infrastructure development.”
Schultz did reiterate that he opposed the massive corporate tax cut passed in 2017 by the GOP Congress and signed by Trump. But then this exchange happened, according to a full transcript of the interview that NPR provided to me:
Inskeep: So if you’re a president that may be going back up.
Schultz: I think what I would I rather say is that comprehensive tax reform would not have included a 21 percent tax rate for corporations.
Inskeep: Is it safe to say that the wealthiest would have to pay more? Whatever the rates become? However the reform is structured?
Schultz: What I would say is that we need comprehensive tax reform.
These are remarkable exchanges. Schultz refused to say whether he thinks the notion that massive high-end tax cuts pay for themselves has been discredited — which is particularly indefensible given the soaring deficits after the Trump tax cuts. Nor would Schultz say whether paying down the deficit by raising taxes on the wealthy is more economically legitimate. And he refused to answer whether under his vision, the wealthy would pay more.
Yet in the very next breath, Schultz also attacked Sen. Elizabeth Warren’s (D-Mass.) new proposal for a wealth tax — on household wealth over $50 million — as “ridiculous” and “punitive” and “not something that’s ever going to be passed.” As Paul Krugman points out, whether or not one supports Warren’s proposal, it’s notable that tax experts are taking it seriously, because it treats extreme wealth concentration at the very top, revenue shortfalls (and their resulting social ills), and extreme inequality as legitimately profound challenges that require progressive tax reform ambitious enough to match the scale of those problems.
In this sense, what Warren has offered is plainly more realistic as policy than what Schultz is offering here. Keep in mind that Schultz himself claims to want to address the latter two of those problems (though whether he wants to address the first one appears rather less clear).
Schultz would not have backed cuts to corporate tax rates as deep as Trump’s, but this probably means he would back cutting them by less, and he won’t say whether he’d want the wealthy’s overall tax burden to go up relative to the status quo. Schultz probably doesn’t believe cutting taxes on the wealthy is the way to combat deficits. But during another part of the NPR interview, Schultz was asked what painful measures he’d accept for tackling trillion-dollar deficits, and this happened:
Inskeep: You’ve got trillion dollar annual deficits now in good times. Getting that down calls for some specific painful sounding things. . . . Changes to Medicare and Social Security. Tax increases on somebody . . . Are you going to do that?
Schultz: Well you haven’t talked about growth.
Inskeep: So you think you can grow your way out of a trillion-dollar deficit?
Schultz: I don’t think you can grow your way out of a trillion dollars.
It’s good that Schultz admitted that we can’t solve trillion-dollar deficits only with economic growth, but does that immediate segue to growth as the solution to deficits scream hard-headed realism to you?
It’s even worse than this. Schultz says he wants to reduce poverty. But he also wants to reduce deficits while also cutting taxes on the middle class, and he won’t say how big a role in deficit-reduction bringing in more revenue from the spectacularly wealthy should play, which, if negligible, would make it harder to fund poverty-reduction programs. And at any rate he wants to tackle the deficit by cutting entitlements, which might also compromise such efforts. As Eric Levitz points out, this amounts to a big bundle of incoherence:
Schultz is promising to reduce inequality by keeping taxes on corporate shareholders lower than they were under Obama, to reduce the deficit by slashing taxes on the middle class, and to end poverty by cutting two of the most effective anti-poverty programs in American history.
On top of this, Schultz was also asked by NPR whether he would support combating inequality through corporate governance reform. Warren has offered such a proposal, which would mandate worker representation on boards of billion-dollar corporations and require them to obtain federal charters instructing them to factor the interests of all stakeholders, including workers and communities. The goal is to reestablish an ethic of social responsibility to combat the culture of “shareholder supremacy” that has helped produce extreme wealth concentrations at the top.
Schultz conceded to NPR that shareholder supremacy is a serious problem, and he has acted out that view as a CEO. But he also said, “I don’t think I would be changing laws” to address it, instead vowing to persuade CEOs to accept a “moral obligation and responsibility” to do “more” for “employees and the communities we serve.” Again, whether or not you support Warren’s proposal, it is more grounded as policy than this airy solution, which also doesn’t sound terribly realistic.
At the core of this sort of centrism is the idea that there’s a hallowed middle ground that — simply by virtue of being equidistant between arbitrarily designated and presumptively equivalent “extremes" — is inherently sensible, virtuous, and above all, non-ideological. This idea is certainly seductive to far too many people. But it doesn’t give rise to anything resembling realism. In a way, it’s a rigid ideology all its own.