Howard Schultz's appeal for fiscal responsibility could ultimately be more significant to the future of the Democratic party than any threat posed by a third-party candidate.

January 28, 2019 | New York


Good morning. Big in the Bay: Sen. Kamala Harris formally launched her presidential campaign on Sunday before an audience of roughly 20,000 in Oakland. She is already a front-runner.


• Big in Seattle: Howard Schultz is finally apologizing for sending the Sonics to Oklahoma City. "For that I will forever be deeply sorry."


Alex Wong/Getty

The case for Howard Schultz


The former Starbucks chief says he is preparing to run for president as an independent, on the grounds that the Democratic Party has become so fiscally irresponsible and shifted "so far to the left" that he no longer identifies with it.


The announcement was met with immediate revulsion from Democrats who fear his "vanity project" will help re-elect President Trump:


Neera Tanden, president of Center for American Progress: "Vanity projects that help destroy democracy are disgusting. If he enters the race, I will start a Starbucks boycott because I’m not giving a penny that will end up in the election coffers of a guy who will help Trump win."


Tina Podlodowski, chair of the Washington State Democrats: "Howard Schultz running as an independent isn’t about bringing anyone together. It’s about one person: Howard Schultz."


These voices, and the otherwise tepid reaction to Schultz's candidacy — made all the more apparent by the enthusiastic reaction to Kamala Harris' bid — dominated the discussion Sunday. Never mind that, as Nate Silver has pointed out, there's no real evidence yet that Schultz would hurt Trump.


• In fact, Silver writes, Schultz's "core buyer" would likely be "a fiscally conservative voter who personally dislikes Trump but worries that the Democrat is way too far to the left."


But more importantly: In all the Democratic handwringing, little attention was given to Schultz's appeal for fiscal responsibility — an issue that could ultimately be more significant to the future of the Democratic Party than any threat posed by a third-party candidate.


Schultz on the Dems, via Andrew Ross Sorkin:


• “When I hear people espousing free government-paid college, free government-paid health care and a free government job for everyone — on top of a $21 trillion debt — the question is, how are we paying for all this and not bankrupting the country?”


• "It’s as big of a false narrative as the wall. Doesn’t someone have to speak the truth about what we can afford while maintaining a deep level of compassion and empathy for the American people?"


Fiscal responsibility is a crucial issue and deserves to be front and center in the 2020 presidential race. Because, like Bernie Sanders in 2016, Democratic hopefuls are already starting to make big promises without providing specific details about how they intend to pay for them — or, for that matter, get them through Congress.


Simpson-Bowles centrism isn't sexy, and it probably isn't going to buy Schultz a ticket to the White House. But the idea that Schultz shouldn't run "because Trump," and that the nation should therefore forgo a conversation about debt and spending, seems to me to be a far more troubling idea than Schultz's possible bid.



QOTD: The lonely middle


Rhode Island Gov. Gina Raimondo talks to Frank Bruni:


• "It takes a lot of spine to be a centrist in America today. You get whacked from the left and whacked from the right. That’s my life. I get whacked.”

🐂 Rally the Market 🐻


Big Earnings Week Ahead:


Tuesday: Apple, Verizon ...


Wednesday: Facebook, Microsoft, AT&T ...


Thursday: Amazon ...


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Zuckerberg's message play


Mark Zuckerberg's plan to integrate Facebook Messenger, WhatsApp and Instagram messaging services will combine three of the world’s largest messaging networks — a move that could benefit Facebook's business as well as its efforts to stem the negative effects of regulation.


The Business Logic, via Slate's April Glaser:


• It will "pull users even more tightly into the Facebook ecosystem."


• It could "help Facebook better monetize the massive user bases of WhatsApp and Instagram, which aren’t nearly the cash cows that Facebook’s main platform and app are."


• It would "allow the company to make a better privacy argument to users" [through] improved encryption and data protection."


The Political Logic, via The Verge's Casey Newton:


• "If the Federal Trade Commission ever planned to compel Facebook to spin out WhatsApp and Instagram ... the company [could say] that there was no longer such a thing as 'WhatsApp' or 'Instagram.' ... there is only Facebook."


The Big Picture, via Newton: "It’s a characteristically savvy — and ruthless — move from Zuckerberg and his lieutenants."


• It's also reportedly upsetting some Instagram and WhatsApp developers who say Zuckerberg is breaking his promises.


Meanwhile, in Washington ... Alexandria Ocasio-Cortez says Silicon Valley companies have too much power and that "the current monopoly trend is societally and economically unsustainable."


Bonus: Kara Swisher rewrites Zuckerberg's WSJ op-ed.


Stephanie Keith/Getty

Tim Cook goes to Davos


Apple chief Tim Cook went to Davos for the first time and met with a number of foreign leaders. While specific details of most of the conversations aren't known, we do know that at least one resulted in the launch of a new Apple Store.


Who Cook met with, via CNBC:


• Brazilian right-wing President Jair Bolsonaro and Microsoft CEO Satya Nadella, for dinner.


• Armenian Prime Minister Nikol Pashinyan.


• Dubai Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum.


• Austrian chancellor Sebastian Kurz.


And, via Apple Insider:


• Czech Prime Minister Andrej Babis, who reportedly managed to secure a promise of an Apple store in Prague.

Market Links


Bill Gates discusses the U.S.-China trade war (WSJ)


Noah Oppenheim sees 2020 as "a test" for the media (NYT)


Jonah Peretti reconsiders pay plan for laid off staff (@hshaban)


Jennifer Salke opens Sundance with $13m acquisition (Wrap)


Ryan Coogler's cast wins big at the SAG awards (NBC)


Mandel Ngan/Getty

Hope Hicks goes Hollywood


Talk of Tinseltown: Can Hope Hicks, the former Trump aide who now runs communications for the Murdochs' "New Fox," cut it in Hollywood?


Vanity Fair's Emily Jane Fox checks in:


• "In the White House ... her job in the West Wing was always about serving her audience of one. Running communications for a public company, where you answer to shareholders and are constantly held accountable by the Securities and Exchange Commission and no-fucks-to-give veteran reporters, is a truth-elasticity-free zone."


• "Media observers wonder whether Rupert Murdoch, who has traditionally led with his gut, has erred in entrusting so much responsibility to a 30-year-old with no experience at a public company and major Trump baggage — not to mention whatever potential legal entanglements she might face down the line."


• "In a campaign and White House where nearly every person became the story at some point, Hicks was able to largely stay out of sight. She’d be lucky to maintain this quality in her new life."


What's Next: "This is where people come to re-write themselves,” a Hollywood executive tells Fox. “If, at the end of the year, if she lasts that long, and she’s at a party, I can’t see people not gravitating towards her. She has a big job. People don’t stay in Hollywood jail forever, not if you’re that pretty.”

Check-Out Line: NYT's Jim Rutenberg looks at why those check-out aisle tabloids keep printing lies. In short, because they sell. “Whether politics or celebrity, narratives are what matter to people," Janice Min tells him. "The details often don’t."


See you tomorrow.


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