The Starbucks Recession Indicator
Want to know how bad a country’s economic downturn will be? Add up the number of outlets serving grande lattes.
Remember Thomas Friedman’s McDonald’s theory of international relations?
The thinking was that if two countries had evolved into prosperous, mass-consumer societies, with middle classes able to afford Big Macs, they would generally find peaceful means of adjudicating disputes. They’d sit down over a Happy Meal to resolve issues rather than use mortars.
In the same spirit, I propose the Starbucks theory of international economics. The higher the concentration of expensive, nautically themed, faux-Italian-branded Frappuccino joints in a country’s financial capital, the more likely the country is to have suffered catastrophic financial losses.
It may sound doppio, but work with me.
The current crisis has its roots in the unhappy coupling of a frenzied nationwide real-estate market centered in California, Las Vegas and Florida, plus a nationwide credit mania centered in New York. If you could pick one brand name to personify these twin bubbles, it’s Starbucks.
The Seattle coffee chain followed new housing developments into the suburbs and exurbs, where its outlets became pit stops for real-estate brokers and their clients. It also carpet-bombed the business districts of large cities, especially the financial centers, with nearly 200 in Manhattan alone.
Caffeine Chronicles 