Ali Velshi Tries, Fails to Explain Macroeconomics to Howard Schultz

In an interview, the businessman shows zero awareness of anything outside his pet issue of the debt and deficits.

Former Starbucks CEO Howard Schultz is still toying with an independent run for the presidency for some reason. If he goess all in on the idea, he’s going to need to do a lot more homework. Specifically, he’s going to have to learn something about economic policy so that he won’t sound, as he did in an MSNBC interview on Friday, like a wind-up toy for deficit hawks who still mourn the failure of the Simpson-Bowles plan from the early Obama years.

Schultz sat down with Ali Velshi and Stephanie Ruhle for what turned out to be a contentious discussion. Velshi went at him hard on not just his vague policy ideas, but also on his eighth-grade-civics level of understanding of the current political moment in America.

Velshi seemed annoyed at Schultz’s diagnosis of a “bifurcation” in American society. Not only because Schultz is wrong that it’s a Democratic-Republican split instead of a rich-poor one, but because “a lot of Americans knew this a long time before you really rich guys started talking about how bifurcated America is and that’s where we are today. Do you get why some people don’t think you have all the answers?”

Schultz then tried to pitch his diagnosis of that bifurcation’s cause, which in his mind comes from “a lack of leadership and government of two sides, Democrats and Republicans, who are unwilling to face the issues and solve America’s problem.”

Schultz’s pitch is a near carbon copy of the diagnosis of some center-right types during the Obama years who ignored the growing ideological and procedural radicalism of the Republican Party to complain that “both sides” were equally at fault for governmental gridlock. So he is about ten years too late to put this outlook into practice.

Velshi pressed him on his binary worldview by talking about the global problem of income inequality. “If that’s true, why is Britain bifurcated? Why is France bifurcated? Why were the Arab countries bifurcated?” Velshi asked. “It’s not actually about Democrats and Republican. It’s about rich people who don’t pay taxes, who don’t understand it’s not about charity. It’s actually about wealth distribution.”

After some more arguing on this point, Schultz pivoted to another simplistic point about the deficit and debt, asking “Should we be spending more than we’re taking in?”

“It’s not a yes or no question,” Velshi replied. Then, over Schultz’s protests, he tried to explain to the mogul that in a recession, the country might want to spend more to keep the economy afloat. In a robust economy, it might not.

Schultz tried again: “It’s not complicated to me. We have such a robust economy and we’re spending much more than we’re taking in and why? Because the Democrats and Republicans and this president are not doing what they need to do to reduce this national debt that we have.”

In Schultz’s mind, the national debt is the most important issue, and reducing it is the priority. That deficit and debt reduction would do nothing to address the issues of wealth inequality that plagues nations around the world in a globalized, interdependent economy does not occur to him. Nor does he seem to realize that government spending is the only lifeline helping people at the bottom of the distribution scale. He does not seem to understand that governments and successful businesses like the one he built have different needs.

To Schultz, there is a simple solution: just get everyone in the room through the magic of leadership and get them talking about the debt, and everything will flow from there. He has no vision or ideology beyond that. It would be hilarious if there wasn’t a real danger he’ll run and throw the race into chaos.

Watch the interview up top, via MSNBC.

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Gary Legum has written about politics and culture for Independent Journal Review, Salon, The Daily Beast, Wonkette, AlterNet and McSweeney's, among others. He currently lives in his native state of Virginia.

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