Posted by: Mathieu | October 23, 2008

Less Starbucks stores, less recession

A nice article, Will Your Recession Be Tall, Grande, or Venti?, on how the amount of Starbucks stores present in a country can be used as an indicator for major finincial problems.

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. The recent unpleasantries between Israel and Lebanon, which both have McDonald’s operations (here and here, respectively) put paid to that reasoning. But the Golden Arches theory of realpolitik was good while it lasted.

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.

Well, when you start poking around Starbucks’ international store locator, some interesting patterns emerge. At first blush, there’s a pretty close correlation between a country having a significant Starbucks presence, especially in its financial capital, and major financial cock-ups, from Australia (big blowups in finance, hedge funds, and asset management companies; 23 stores) to the United Kingdom (nationalization of its largest banks).

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Responses

  1. Wow, that’s the perfect recipe for ending the financial crisis: just close down all Starbucks stores…

  2. I like Daniel Gross. I really do. For a while I was considering basing my thesis on one of his previous articles.

    But this borders on the idiotic. For one, there isn’t much of a theory there, just a correlation. And apparently not much of one at at that either.


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