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October 23, 2013 7:30 pm
Howard Schultz, chief executive of Starbucks, has warned America’s political leaders that they must live up to their responsibilities and not allow the US to flirt with the possibility of a debt default again next year.
“We are in dire need of co-operation and civility and civil discourse among our elected officials,” he told the Financial Times in the aftermath of this month’s federal government shutdown.
“If that doesn’t happen and we have this event again it’ll be very destructive to the American people. It’ll be shameful in terms of the lack of leadership and it will continue to hurt America’s standing in the world.”
Mr Schultz, who has become a vocal political activist in the past two years, was adding his weight to criticism already expressed by billionaire investor Warren Buffett and other corporate leaders.
The 11th-hour deal to avert a debt default last week suspended the US debt ceiling until February 7, when it will need to be raised again. Mr Schultz said the latest stand-off had caused a “fracturing” of consumer confidence.
Some US business groups are revisiting their political strategies in the wake of the shutdown and reassessing attitudes towards the Tea Party, whose agenda they say is not fully aligned with the interests of corporate America.
The US Chamber of Commerce, the largest US business lobby group, has hinted that it will become more active next year when midterm elections are due.
Before the deal to avert a default, Mr Buffett likened the last-minute negotiations over raising the debt ceiling to wielding a “political weapon of mass destruction”.
If Congress caused a technical default on bond payments it would be a “pure act of idiocy”, he said. “I know it’s been used in the past, but we used the atomic bomb back in 1945 and we decided we weren’t going to do something like that again.”
Mr Schultz said: “The cause of the shutdown was probably greater on one side versus the other, however the responsibility to reopen the government and not default and reach a compromise is equal on both sides.”
He declined to comment on the Tea Party. He said he had not given money to any elected officials for three years and would not do so until he saw more “civility” in politics.
The Starbucks chief, who was speaking ahead of the opening of its first Teavana tea bar in New York, said: “The unintended consequences of all of this [are] something I don’t believe the American people can continue to go through.”
Before the debt deal last week, Muhtar Kent, Coca-Cola chief executive, called the crisis “a bad dream”, and said: “There is no time that I know in history that the world needs US leadership more than today.”
Additional reporting by Shannon Bond in New York
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