In an effort to stimulate the failing US jobs market, Starbucks recently teamed up with Opportunity Finance Network. At all Starbucks locations, bracelets are being sold for five dollars, with proceeds allocated to providing start-up nonprofit organizations with business loans. Following his column in the Baltimore Sun, Dan Rodricks hosted representatives of Starbucks, Opportunity Finance Network, and a local nonprofit that will benefit from the initiative.
Later in the program, Rodricks brought on Agora Financial’s executive publisher Addison Wiggin, whose newsletter the Apogee Advisory has frequently discussed the role of private programs in economic growth. Addison was joined by Moody’s Analytics chief economist Mark Zandi in the discussion.
Some highlights from the program:
“It’s appropriate that we are talking about [job creation] today,” Wiggin stated. “Because we learned that the Super Committee, which is what resulted form the deadlock this summer, is in fact going to be deadlocked itself and automatic cuts will kick in. We learned effectively that Congress can’t work together. What this Starbucks program indicates is that it is important that there is a private initiative to try to do something – even if it’s small.”
He continued to discuss where public policies have recently failed. “Jobs are not necessarily created in the United States,” he said. “The way the wage and labor markets work it’s cheaper to get stuff produced – and even the tax advantages make it cheaper to produce overseas. Stimulus money goes to creating jobs. It just creates jobs in places like Vietnam.”
“Creating any policy that doesn’t turn into a partisan battlefield has proven to be very difficult. Until some kind of leadership develops that provides for changes in immigration and tax code, the rest of us are going to be standing around waiting for something to happen. Private initiatives are the step in the right direction.”
“I would caution that lending money in the down cycle of a credit crunch is not necessarily the way to create jobs,” he warned. However, he provided some optimism as well: “More importantly Starbucks is beginning the conversation. [This] gets the thing going in the right direction. If we can have a private conversation that is separate from the political football that gets tossed around Washington, I think we’re moving in the right direction. But the challenges we face in the economy are not going to be addressed by putting more credit into the system.”
The full audio is available here. Addison joins Rodricks in studio at the 40-minute mark.
The message was a continuation of his comments of last week, when Addison spoke for a Mount Vernon Women’s Club dinner event. Invited for his reputation of “concerned, constructive criticism,” he highlighted the lessons of his widely acclaimed documentary on the national debt crisis, I.O.U.S.A., and how the nation has progressed since. While discussing his new film, RISK!, he emphasized the need for job creation through entrepreneurship. He stated that private companies need to pave the way, as Congress will continue to be slow in improving our economic situation.
One attendee of the Mount Vernon Women’s Club event said: “Addison has wrestled with these issues of U.S. debt for years, and it shows with his ease of manner and living room tone. His insights to me boil down to the fact that looking to corrupt and bankrupt governments for individual enhancement is a fruitless quest. But there is hope! And the hope lies with individual connections and insights.”
