'The $2 trillion is not going to be nearly enough to satisfy the economic issues’: Howard Schultz

American Businessman Howard Schultz shared his thoughts on how the government is responding to the coronavirus and Washington’s stimulus package. Yahoo Finance’s Julia La Roche joins the On The Move panel to discuss.

Video Transcript

ADAM SHAPIRO: Welcome back to Yahoo Finance. Markets really jumping within the last 10 minutes. The Dow is now up more than 600 points. S&P 500 up over 60. And the NASDAQ up over 130 points.

Part of the reason is this news coming out of Washington that the Senate Majority leader Mitch McConnell and the Minority Leader Chuck Schumer are apparently working on an additional funding bill for the Paycheck Protection Program to add anywhere from $200 to $250 billion dollars to that program. So we're keeping an eye on that. Of course, this money on top of the $349 billion that's already allocated, is designed to save small businesses. Our Julia La Roche spoke with former Starbucks CEO Howard Schultz about how this money and how these businesses need that money in this dire time.

HOWARD SCHULTZ: So as part of the due diligence for this effort, we have spoken to many restaurant owners in Seattle as well as restaurant workers. And the common theme, unfortunately, was that the bureaucracy, the red tape, and the way the system has been just overloaded with demand. People are very frustrated and concerned that this isn't happening fast enough, and there's a lot of bottleneck. That's one thing.

The other issue is, I think it's clear to members in Washington and certainly to business people that the $2 trillion is not going to be nearly enough to satisfy the economic issues. And in the same context that we are trying to flatten the coronavirus curve, we have to flatten the economic curve of despair. What that means to me is that it could very well be over 30% of small business owners and restaurants who will not be able to reopen their stores.

Now these are not big companies. These are small businesses, mom and pop, independent people, entrepreneurs who have struggled to do everything they could to build this business. And all of a sudden, it might be gone. So in my view, I would hope that members of Congress are looking at a way to create a backstop, and looking at it now so that the landlords and the mortgage holders have some kind of facility that is government backed not to put these people out of business.

And you know, in view of that, I think the $2 trillion needs to be a lot more. And I could see it exceeding $5 trillion. And I would hope that members understand that the time to execute and plan for this is now, not when we are weeks and months away. The need for a comprehensive plan would go so far in satisfying I think the epidemic of fear, uncertainty, and panic that is now going through the country as well as the coronavirus.

ADAM SHAPIRO: Julia La Roche, did he, did I hear him correctly? $5 trillion?

JULIA LA ROCHE: Yeah. That's right, Adam. You did hear him correctly. He has a really good pulse on small businesses. Even if you go back to his time at Starbucks, he did a whole effort around the last crisis around helping small businesses get on their feet.

And yeah, he's calling for $5 trillion. If you heard him, he said a backstop specifically for mortgage holders, landlords so you're not forcing these small businesses to pay rent that they simply cannot afford. There needs to be some sort of government facility because there's this interconnected nature of business with the landlords, those small businesses, the restaurants, those sorts of things.

I'll point this out, Adam. Howard Schultz now running his family foundation, the Schultz Family Foundation came out with a program yesterday. It's called the Plate Fund. It's helping to get restaurant workers in Seattle access to $500 immediately. Within 48 hours, they've already had 1,700 plus applications. $850,000 going out right away. They expect more.

They have more than 5,000 restaurants in the Seattle area, an area that's been hard hit by the coronavirus, one of the earlier hit areas, 100,000 workers. They're also getting those funds to undocumented workers who will not be getting the federal stimulus checks. So it's just another example of a private sector nonprofit stepping up and filling the gap, bridging that gap while we wait for the stimulus checks to arrive.