Joe Tharakan | The power of the purse strings

Cup O'Joe | Like it or not, your spending is a political statement. Use it wisely.

By Joe Tharakan 02/06/17 9:14pm

On Monday, 97 companies issued a joint statement going against the “Muslim ban” executive order. For better or for worse, this is the new normal. Companies are being forced to take a stand one way or the other. Consumers like us should as well.

For example, Howard Schultz, CEO of Starbucks, got political in his pledge to hire 10,000 refugees following the executive order. This led to a “boycott Starbucks” movement among Trump supporters, which led to a counter-movement of liberals buying more Starbucks to compensate. Everything, even where you get your coffee, is now a political statement.

It’s very frustrating to realize that this country is so polarized that politics has permeated absolutely everything. The Trump black hole has sucked in our entire nation and not even a small ray of non-partisan light can escape. Not the Super Bowl, with its politically themed advertisements. Not simple service businesses like Lyft and Amazon. Not even the “failing” news media, which publishes story after story and op-ed after op-ed on whatever thing President Trump just did or said.

Companies have found themselves between a rock and a hard place when it comes to the Trump administration. On one hand, going against him could lead to a Twitter attack and a subsequent dip in stock prices, which has already happened to companies like Boeing and GM. On the other hand, aligning too closely with him leads to backlash movements like #DeleteUber and the “Grab Your Wallet” campaign designed to boycott companies that do business with Trump. And remaining silent comes with its own risks, like potential backlash from consumers and employees alike.

Businesses are finding that, one way or another, you’re going to have to pick a side. From a corporate point of view, branding yourself as pro-Trump or anti-Trump has serious implications for your marketability. Whether Airbnb’s “accepting” Super Bowl ad was a smart decision is yet to be seen, but you can bet it was very deliberate.

However, let’s not sugarcoat it. Starbucks probably didn’t pledge to hire 10,000 refugees out of the kindness of their hearts — they did it because they calculated the good press and increased purchasing among their target demographic, urban liberals, making it worth the expense. Uber CEO, Travis Kalanick, only resigned from Trump’s economic advisory council when confronted with the fallout from the #DeleteUber campaign. Numerous companies have withdrawn advertisements from Breitbart.com fearing consumer backlash, which might eventually hurt their bottom line.

I personally think all those outcomes are good, but I of course come with my own partisan biases, as does everyone else. But whether you like them or not, you must admit these actions were a result of changing incentives for these companies. Consumers are now deciding to put their money where their mouth is and refuse to bankroll companies they feel don’t stand up for their values. More power to them.

Nobody can tell you where to spend your money. While it may be irritating that everything has become political, it isn’t new. Calls for boycotts of states like North Carolina after they passed discriminatory laws were effective and hurt their economies and were arguably responsible for former Gov. Pat McCrory’s loss last November. If we can boycott a state when it pushes a policy we dislike, why not a company?

If this is the world we live in, so be it. Everything is so political because there is a massive political divide. The two parties are so divided because people are divided. Business owners are free to support whomever they like, but if we disagree, the least we can do is refuse to let our money line their pockets.

That being said, this approach comes with its drawbacks. Intentionally valuing a product more due to political affiliations instead of the product itself leads to market distortions, and trying companies in the court of public opinion can be dangerous.

Nonetheless, this hyper-partisan environment won’t end with some kumbaya come together sing-along. It only ends when one side wins and the other side loses. That is when the nation heals and comes together again.

Economic boycotts are one weapon in a political arsenal. So whichever side you are on, go ahead and flex your consumer muscles. It’s your right to spend your money at companies that promote your values and your right to boycott companies that don’t.

JOE THARAKAN is a College senior from The Bronx, N.Y., studying Biological Basis of Behavior. His email address is jthara@sas.upenn.edu. “Cup O’Joe” usually appears every other Tuesday.