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PIERS MORGAN TONIGHT

Interview with Christine O'Donnell; Interview with Howard Schultz

Aired August 17, 2011 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)

PIERS MORGAN, HOST: Tonight, an absolutely extraordinary moment. Christine O'Donnell, one time Tea Party darling, walks out of my studio rather than answer what I thought were fairly straightforward questions.

(BEGIN VIDEO CLIP)

MORGAN: I'm just asking you questions based on your own public statements and now what you've written in your own book. It's hardly rude to ask you that surely.

CHRISTINE O'DONNELL (R), FORMER U.S. SENATE CANDIDATE: Well, don't you think as a host, if I say this is what I want to talk about, that's what we should address?

MORGAN: Not really, no. You're a politician.

O'DONNELL: Yes. OK. I'm being pulled away. You know, we turned down another interview for this.

(END VIDEO CLIP)

MORGAN: We'll see the whole bizarre encounter in a few minutes.

Plus, Starbucks boss, Howard Schultz.

(BEGIN VIDEO CLIP)

HOWARD SCHULTZ, CEO, STARBUCKS: It's wonderful.

(END VIDEO CLIP)

MORGAN: Why he is leading a rebellion, cutting off big money contributions to candidates in Washington.

(BEGIN VIDEO CLIP)

SCHULTZ: People who will be signing the pledge with me will be both Republican and Democrat CEOs who have had enough.

(END VIDEO CLIP)

MORGAN: This is PIERS MORGAN TONIGHT.

(MUSIC)

(END VIDEOTAPE)

MORGAN: Christine O'Donnell ran for the Senate from Delaware. She's a Tea Party darling and yes, she infamously dabbled in witchcraft when she was in high school. She's also the author of a new book with the intriguing title, "Troublemaker."

And Christine O'Donnell joins me.

Christine O'Donnell, how are you?

O'DONNELL: I'm doing well. Good to see you, Piers.

MORGAN: I can't help but notice you did the sign of the cross as you sat down there. Was it -- is it because you're nervous about the interview? Or --

O'DONNELL: No, I did it off camera. I didn't realize you were watching. I do that just because ever since my very first TV interview, I just pray. You know, and ask for God's blessing on what I'm about to say.

MORGAN: Well, I got relieved. I was expecting some kind of devil worshipping sign.

(LAUGHTER)

MORGAN: Look, here's your book, "Troublemaker." And what I was struck by is a little description on the back where -- it's a quote from you. "They call us wacky. They call us wing nuts. We call us the people."

I mean, I have met lots of people who are wacky and wing nuts. You can be both, can't you?

O'DONNELL: Oh, yes. And it's an exciting time right now what's going on in the political establishment and the political process right now. But that's a quote from my introduction, which is a quote from a speech that I gave, reminding the reader, reminding the audience, you know, that as the establishment pushed back and say, they are extremist, don't listen to them, I remind them that they said the very same thing about our Founding Fathers, they said the very same thing about the abolitionists who wanted to end slavery, that they are extremist, they are unrealistic, they're naive about the establishment in the political process.

But these folks were committed to a vision. They were committed to the greater good and they sacrificed and they didn't give up, and they turned, you know, these bad times in American history into major breakthroughs and, you know, the foreign press corps has called this time the second American revolution and we need to keep moving forward and remember that if we want to enjoy the same fate as the first American Revolution, we have to not listen to the name-calling and the harassment and malignment that they might throw our way.

MORGAN: Well, you certainly have plenty of that. You were this star of the midterm elections. You were the hottest thing the Tea Party had produced, I don't know, probably ever at the time. It all went horribly wrong, didn't it, and you got hammered all over the place.

O'DONNELL: Yes.

MORGAN: When you look back on it, what was the catalyst, do you think, or -- not your down fall but your hiccup?

O'DONNELL: Well, I think -- I like the way you say it's a hiccup. Thank you for minimizing that.

MORGAN: My pleasure.

O'DONNELL: I think it's a combination of things. And you can't point to any one thing but rather a perfect storm. And it started with the fact that our party wouldn't unite.

The day that I won the primary, you had major national Republican figures going on national television slamming me when instead what we needed to do was what they did in Kentucky where Mitch McConnell railed against Rand Paul, but as soon as he won the primary, thy were arm in arm saying, let's take this guy to the finish line. And the strength of that united party is what ultimately won a victory.

We had none of that in Delaware. Instead, as soon as I won the primary, you had -- you know, the White House, Barack Obama personally came to Delaware to campaign against me. You had, of course, the whole Democratic machine coming against me slamming me and then I had my own party. Some of those ousted leaders were telling people to vote for my Democratic opponent.

So, it was a very heavy lift for a grassroots mostly volunteer- based campaign and without the strength of the united party, it was difficult. And the, of course, as I admit in the book, we made certainly a lot of mistakes. Some of those were self-inflicted wounds as I admit that I definitely regret.

MORGAN: Let's -- why don't we -- why don't we just jump in there and remind you.

O'DONNELL: OK.

MORGAN: I'm sure you'll be thrilled about this. We're going to remind you of one of the self-inflicted wounds. So, have a little look at this.

(BEGIN VIDEO CLIP)

O'DONNELL: I dabbled into witchcraft -- I never joined a coven. But I did, I did.

UNIDENTIFIED MALE: Wait a minute, you are a witch? UNIDENTIFIED MALE: Yes, she was a witch.

UNIDENTIFIED MALE: Wait a minute. If you were a witch, you are going to --

O'DONNELL: I was a witch. That's exactly why.

UNIDENTIFIED MALE: How can you be a witch?

O'DONNELL: Because I dabbled into witchcraft. I hung around people who were doing these things. I'm not making this stuff up. I know what they told me they do. I mean, one of my dates -- my first date --

(CROSSTALK)

UNIDENTIFIED MALE: Wait. I want to hear about this.

O'DONNELL: One of my first dates with a witch was on a satanic altar and I didn't know it. I mean, there's little blood there and stuff like that.

UNIDENTIFIED MALE: Your first date was in the satanic altar?

O'DONNELL: Yes. We went to a movie and like had a midnight picnic on a satanic altar.

(END VIDEO CLIP)

MORGAN: My first date was in a satanic altar with blood there. What were you thinking?

O'DONNELL: Did Bill Maher pay you to rerun his show?

You know, well, at the time -- at the time as I, again, painstakingly detail in the book, it was a different time in my life and perhaps I was a little too candid for television. But my goal wasn't to go on the show just for the sake of going on national television. I went on the show to try to reach a younger audience with a message that, you know, when I was 16, by the way, this was 25 years ago, you know, I too was trying to find my way in the world and ultimately I did.

And, you know, people have said -- do you regret making those comments?

And I go into detail about what my thinking was. But the more self-inflicted wound was how we chose to respond and the ad was a big mistake.

MORGAN: Well, that brings me -- that brings me neatly to --

O'DONNELL: Oh, don't tell me you're going to play that ad.

MORGAN: I'm afraid we are. Yes. So, let's have a look at how you made a small problem 10 times worse. (LAUGHTER)

(BEGIN VIDEO CLIP)

O'DONNELL: I'm not a witch. I'm nothing you've heard. I'm you.

None of us are perfect but none of us can be happy with what we see all around us. Politicians who think spending, trading favors and backroom deals are the way to stay in office. I'll go to Washington and do what you would do.

I'm Christine O'Donnell, and I approve this message. I'm you.

(END VIDEO CLIP)

MORGAN: You see, the weird thing to me watching those two clips is on the first clip, you seem like a fairly naive -- you don't me mind saying -- slightly silly young woman who is having a bit of fun about witchcraft.

O'DONNELL: Right.

MORGAN: In the second one, you look like a witch. You look really creepy.

O'DONNELL: I know.

MORGAN: And so ugly. I even started to believe you might be a witch when I saw this creepy commercial.

O'DONNELL: It was -- you know, as I write in the book, as soon as I saw that line, I said I don't want to do this. This is the wrong direction. What our campaign ads should be doing instead is highlighting who I am now, what my platform and position is, the reason why Democrats, independents and Republicans are getting behind my campaign, and we didn't go that route.

And we should have gone on the offensive and started to expose the many lies that my opponent was saying about his own record. But instead -- you know, I didn't listen to my gut. I tell that story and I relive it as embarrassing as it is to watch it.

But I do so, so that perhaps the reader can relate and might have confidence in their own gut because the mistake that I made was that, you know, it was my gut and the instincts of many disenfranchised voters in Delaware who got us through such a tremendous victory in the primary and then what did I do after we won the primary? I listened to the so-called experts who had been losing election after election.

So, again I try to tell that story so that the reader might have confidence going forward propelling the second American Revolution to listen to your gut and the experts aren't always experts.

MORGAN: Well, here's the thing. You and I had a -- we had a little Tea Party in New York soon after your departure from the political stage. We had a breakfast where I told you how to make proper English breakfast tea --

O'DONNELL: Right.

MORGAN: -- making the Tea Party tea had a certain irony to it. And I remember thinking at the time that at least you were pretty positive about all this. You seemed to work out where you had gone wrong and I thought -- we're going to see more of that lady going forward.

And now, we have a situation where the Tea Party is becoming ever more credible, ever more popular. We have Sarah Palin, Michele Bachmann and others leading the charge here.

I would have thought there was a pretty good chance that you could make a pretty big move back into the political stage, isn't it?

O'DONNELL: Well, I hope to stay in the political arena -- maybe not necessarily as a candidate or in an elected office. But I wrote this book so that it can be, you know, not just a tell-all or setting the record straight -- trust me, there's plenty of juicy gossip in it.

But I close the book with what I hope to be a practical application about how people can get involved and with what I think are the policy solutions we need to engage moving forward. I have a whole chapter that I call the freedom food chain where I talk about what the proper role of government should be and I call for a radical, ideological reawakening of the principles that made our country great. And it's Republicans and Democrats who have had a grave departure from those principles and we need to get back on track.

And I'm glad that you see that the Tea Party is credible because I believe that the Tea Party is at a crossroads. And the fact that the balanced budget amendment was such a huge part of the debate and we didn't just raise the debt ceiling blindly as we have done in the past is completely credited to the impact of the Tea Party movement.

So, what do we have as a response instead of congratulating them for this wonderful impact and bringing common sense solutions back to the political process --

MORGAN: The problem, Christine, if I may just jump in there?

O'DONNELL: Yes.

MORGAN: I mean, is the problem is yes, you are credited with not having the debt ceiling raised. But at the same time, you are credited with total paralysis in Washington. I think there's an emerging credibility for the Tea Party --

O'DONNELL: Right.

MORGAN: -- but there's also an emerging issue about if you're going to continue as a party to be ever more forceful but don't do anything to compromise. That is going to paralyze America.

O'DONNELL: Well, that's why I say that the Tea Party is at a crossroads. I don't think that compromise is the issue. I think that we have to not -- not take the bait as we have Joe Biden calling us terrorists and extremists.

Again, remember they said that about the abolitionists. That it was naive to think that we can end slavery. They said that, you know, our whole economic system rested on the slave trade. And they were wrongheaded, establishment-minded arguments.

And we have to remember that again -- they tried to say the same thing about our Founding Father at the birth of our country.

And they are trying to do the same thing now, because the reality is: our country is going bankrupt. Our country is on the brink of collapsing. Our economy, our currency is being devalued.

This is a very grave situation unlike any time. We need real solutions. We need to get back in a very radical way to the principles on which our country was founded.

If your family got in such a difficult economic situation such -- you know, such an overextension of your finances, you're not going to continue to go to the country club. You're going to not -- you're not going to take these elaborate vacations to Martha's Vineyard. You're going to have drastic cuts in your family budget so that you can get back on track.

And it means downsizing and that's exactly what we have to do right now because this is very serious. We might not continue in the next couple years. It's a very serious situation that we're in.

MORGAN: OK. We're going to discuss this further after the break. We're also going to talk to you about sex. You'll be pleased to know.

O'DONNELL: Great.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

O'DONNELL: We need to address sexuality with young people. And masturbation is part of sexuality, but it is important to discuss this from a moral point of view.

The Bible says that lust in your heart is committing adultery, so you can't masturbate without lust.

The reason you don't tell them masturbation is the answer to AIDS and all these other problems that come with sex outside of marriage is because, again, it is not addressing the issue.

(END VIDEO CLIP)

MORGAN: That was from the MTV special "Sex in the '90s."

I'm about to ask you a question I don't ask most of my guests, I have to be honest with you. Do you still think masturbation is wrong?

O'DONNELL: Let's not even go there.

MORGAN: Why? You went there.

O'DONNELL: Well, again, like I said, I address it in the book. At that time in my life, my goal was to reach out to young people and there was a show "Sex in the '90s" on MTV where it pretty touted the philosophy that anything goes. And, you know, there's no doubt I don't think anyone would disagree that there's a little bit of a crisis when it comes to whether it's AIDS or sexually transmitted disease or teenage pregnancies.

So, my goal at the time was to reach out to young people and try to present a view of sexuality that they weren't getting. And again I go into detail about where I was at that time in my life and why I chose to go on that show and do that interview.

MORGAN: I get all that. I mean, your views on sex and stuff are relevant if you're going to be a politician.

O'DONNELL: Well, they're not because there aren't laws outlawing sex. And if there are, they should be on the local level, as I make the case for local control as opposed to federal control.

MORGAN: So, am I right in assuming your views have evolved over the years?

O'DONNELL: Well, I am a practicing Catholic and I support what the Catholic Church teaches. But, you know, would I as a -- I was about to say my age, but as an older woman, go on that show again, no. I wouldn't go on that show again and nor would I choose to do an interview about that subject again.

Again, it was a different time in my life. I was -- I was excited and passionate about this new belief that I had, this new faith that I found. I was eager to share it with my peers.

MORGAN: Are you still a supporter of total abstinence even if you are on your own?

O'DONNELL: Are you the pro-masturbation talk show host?

(LAUGHTER)

MORGAN: Yes. Why not? Yes.

O'DONNELL: Good for you for taking that stand. You know, right now --

MORGAN: If the option is to be the anti, I think I'd be in the pro department, yes.

(LAUGHTER)

O'DONNELL: OK. MORGAN: And I'm not afraid to say so. So, over to you, Ms. O'Donnell.

O'DONNELL: Well, what I'm going to do and what my goal is now is to fight for the freedom of speech in America that allows to you say that. I mean, that's what's my focus right now is to fight for the constitutional principles that made our country great because we do have a movement in Washington that is completely abandoning it.

MORGAN: Can I ask you, have you -- have you committed lust in your heart and therefore adultery?

O'DONNELL: Let's not even go there. Let's get the conversation back to the book. That's why I'm here.

MORGAN: Yes. But this is -- to me, it's a natural extension to ask you, for example, a very relevant question of any politician. For example --

O'DONNELL: I address it all in the book.

MORGAN: -- what is your view of gay marriage, for example?

O'DONNELL: I address that stuff in the book.

MORGAN: You can't -- you're on here to promote the damn book. So, you can't keep saying it's all in the book. You got to repeat some of it.

O'DONNELL: I'm here to talk about the book.

MORGAN: Yes. I'm talking about the book. You keep saying it's all in the book. So, tell me what's in the book.

O'DONNELL: Well, why don't you ask me questions about what I say in the chapter called "Our Follower in Chief" where I criticize Barack Obama? You know, why don't we talk about --

MORGAN: Because right now, I'm curious -- right now, I'm curious about whether you support gay marriage.

O'DONNELL: You're borderline being a little bit rude. You know, I obviously --

MORGAN: Really?

O'DONNELL: -- I obviously want to talk about the issues that I choose to talk about in the book.

MORGAN: Do you answer that question in the book?

O'DONNELL: I talk about my religious beliefs, yes. I absolutely do.

MORGAN: I mean, do you talk -- do you talk about gay marriage in the book? O'DONNELL: What relevance is that right now? Is there a piece of legislation? I mean, I shouldn't be voting on anything.

MORGAN: It's obviously one of the most -- it's obviously, as you know, because Michele Bachmann's views and others, it's obviously a highly contentious political issue. I'm just curious what your view is.

You keep saying it's in a book. So, I'm bemused as to why you wouldn't just say it in an interview if it's in the book?

O'DONNELL: Because I don't think it's relevant. It's not a topic that I choose to embrace. I'm not championing it right now. I've been there, done that, gone down that road.

Right now, what I'm trying to do is to promote a book that I hope to be a very inspirational story to people who are part of the Tea Party movement so that they can continue, you know, in this movement to bring America back to the second American Revolution. That's my goal. That's my focus right now.

MORGAN: So, would you agree with Michele Bachmann that we should maybe repeal "don't ask, don't tell"? You should restore that?

O'DONNELL: I'm not talking policies. I'm not running for office. Ask Michele Bachmann what she thinks. Ask the candidates who are running for office what they think.

MORGAN: Why are you being so weird about this?

O'DONNELL: I'm not being weird about this, Piers. I'm not running for office. I'm not promoting a legislative agenda. I'm promoting the policies that I lay out in the book that are mostly fiscal, that are mostly constitutional.

That's why I agreed to come on your show. That's what I want to talk about.

I'm not being weird. You're being a little rude.

MORGAN: I'm baffled as to why you think I'm being rude. I think I'm being rather charming and respectful. I'm just asking questions based on your own public statements and now what you've written in your own book. It's hardly rude to ask you that surely.

O'DONNELL: Well, don't you think as a host, if I say this is what I want to talk about, that's what we should address?

MORGAN: Not really, no. You're a politician.

O'DONNELL: Yes. OK. I'm being pulled away. You know, we turned down another interview for this.

MORGAN: Where are you going? You're leaving?

O'DONNELL: Well, I was supposed to be speaking at the Republican women's club at 6:00, and I chose to be a little late for that not to be -- you know, yes, not to endure rude talk show hosts, but to talk to you about my book and to talk about the issues that I address in my book. Have you read the book?

MORGAN: Yes, but these issues are in your book. That's my point. You do talk about them.

O'DONNELL: OK. All right. Are we off? Are we done?

UNIDENTIFIED MALE: He's still there.

MORGAN: I'm not. I'm still here.

UNIDENTIFIED MALE: He says he still wants to talk to you.

MORGAN: It would appear that the interview has just been ended.

Christine O'Donnell, I want to issue a personal invitation right now for you to come back on my show tomorrow night to explain why you walked off and to answer some of what I thought were pretty straightforward questions based on your own public statements. We could do it live and I hope you'll accept the invitation. I promise not to be even remotely rude.

Coming next, Starbucks CEO Howard Schultz on why he wants to cut off big bucks contributions to Washington. Stick around.

(COMMERCIAL BREAK)

MORGAN: Howard Schultz is not just man who caffeinates America and the world for that matter, he has a radical proposal to end the infighting in Washington, stop giving money to candidates. Howard Schultz is also the author of "Onward: How Starbucks Fought for Its Life Without Losing Its Soul." And he joins me now.

Howard Schultz, thank you for joining us. I want to make sure you're not going to walk out on me like my last guest.

HOWARD SCHULTZ, CHAIRMAN, CEO, STARBUCKS: Piers, I'm here to stay.

MORGAN: Excellent.

Now, I want to read you a quote which you recently gave as kind of, I guess, a standard bearing mantra to other CEOs. You said, "Over the last few weeks and months, our national elected official from both parties have failed to lead. They have chosen to put partisan and ideological purity over the well-being of the people. They have undermined the full faith and credit of the United States. They stirred up fears about our economic prospects without doing anything to truly address those fears."

And you go on to ask those fellow CEOs to boycott Washington and cease campaign contributions -- a pretty aggressive stance from a pretty aggressive businessman.

What do you hope to achieve here?

SCHULTZ: Well, I wouldn't characterize it as aggressive when you consider the sense of urgency that I think we all need to have about the crisis of confidence that exists in our country as a result of a crisis of leadership.

But let me say at the outset that I love this country. I'm a registered Democrat, but I'm not coming at this in any way in terms of my own views or partisanship. I'm coming at this as a citizen.

The ways in which our members of Congress and administration are looking at these things, unfortunately, is through the lens of whether or not the polls will suggest this is good or bad for their own re- election. And the life blood of their re-election, unfortunately, is fund-raising and money.

And when I did my own research and was stunned by the fact that over $4 billion were spent in the last presidential cycle and an estimated 5.5 billion in 2012. I just could no longer sit idly by and just allow the status quo to continue when I realize that the connective tissue of what's happening in America, in terms of the cause and effect of not only the economics system of the U.S., but how this is affecting America's reputation, our standing in the world.

I just feel very strongly that I just wanted to raise my voice in the most respectful way, with civility, and suggest to those people who are funding these re-elections and funding the incumbents' ability to stay there, that we send the most powerful message that they will hear, that we no longer want to accept the status quo. We're tired of what's going on in Washington. And America deserves better.

MORGAN: What's fascinating, watching from the sidelines here, is that Warren Buffett early this week came out with some pretty strident advice to the president, to tax the super rich like him. And that, of course, would impact on you, another billionaire yourself.

What it seems is that the American business community, that the guys running the sharp end of business in this country have decided, enough is enough. This procrastination, this dithering, this political infighting is actually really causing damage and harm to business in America.

SCHULTZ: I think that's actually an understatement. I actually spoke to Warren on Friday about the initiative that I was going to take, as well as his own. I wanted to seek his advice and counsel. But I think what you just brought up is something -- let's put some numbers on top of that.

I think, if my research is correct, there's about a trillion dollars sitting idly on the balance sheets of American companies. And because of the crisis of confidence and uncertainty, the anxiety of American business people is to probably not invest as much as they could or should in the American economy right now, because there's such uncertainty and a fracture of confidence with the consumer and America at large. And part of my proposal was not only suggesting that we hold back and suspend donations, but we do not wait for Washington. As American business leaders, we too can have and make a difference. I think the confidence that we could bring to the country could be contagious.

What I'm asking of my peers is to invest back into the growth of their company and to the country, and do everything we possibly can to hire people. I would suggest -- you know, I wouldn't in any way compare turning a company around to the crisis of confidence in America. But I think some of the tools and resources are the same.

What I mean by that specifically, there has to be a laser focus on the things that are most important. I'm looking at the situation now and I'm saying, we are in a crisis. We have to have this deep sense of personal urgency.

I don't begrudge anyone from taking a vacation, but we need to send a message to Congress to go back to Washington and please address the issues of the day and bring confidence back to the American people and the rest of the world.

MORGAN: You are obviously a very successful businessman. You run one of the biggest companies in America. It's been an odd recession in many ways, in the sense that a lot of companies -- take Apple, for example -- they've been exploding with profit through a period when many people in the street, ordinary young businessmen or running their own businesses, have been really struggling.

So there's a real disparity here between I think big, successful companies like yours, like McDonald's, like Apple and so on, and what is happening to the average guy on the street, isn't there?

SCHULTZ: Well, I think unfortunately the gap between the rich and poor, and the haves and have nots has widened. And I think, Piers, there's something else that unfortunately has not been spoken a great deal about. And that is as a result of the deficit and the pressure on the federal government, the United States, the individual states -- I believe 42 of the 50 states are facing a budget deficit. And about a third of the states are facing a crisis of insolvency.

But specifically what that means is that there is going to be such a dramatic cut to social services in America. And the people that that is going to affect the most is the people in the safety net of social services, the people who don't have a voice, the people who are being left behind.

And again, I think the responsibility of not only the government but business leaders and corporations is -- corporations are going to have to ask themselves a very important question. And that is that we're going to have to do more to provide the kinds of services to the communities we serve, and a safety net for the people that we employ, because the federal government is not going to have the resources. And the states are not going to have resources they've had before, which I think brings into play the need for Washington to get their act together because -- MORGAN: Hold that thought. We're going to take a quick break. Hold that thought. When I come back, I want to talk to you. When you came back as CEO of Starbucks, for example, three years ago, I think it was, you dealt with a pretty big crisis facing your company. And I want to talk to you about how you turned that around and how America, maybe through President Obama's administration, can do the same now.

(COMMERCIAL BREAK)

MORGAN: Back now with Starbucks CEO Howard Schultz. Howard, you basically built Starbucks from scratch and turned it into this huge global company. But a few years ago, you stopped being CEO. You remained as chairman. And then you came back as CEO after an eight- year gap in 2008, at a time when the company was facing not the same kind of problem that America is facing, but certainly difficulties in its business model.

Tell me about that period and about what you did to get Starbucks back on fire again?

SCHULTZ: Well, the irony is when I came back in 2008, it was terrible timing because it was during the cataclysmic financial crisis. So we were trying to navigate through the storm of the economy and also some self-induced mistakes that the company had made. Even though I was not the CEO and I was the chairman, I stood up in front of our people and I apologized for the fact that I thought we, as leaders, had let them and their families down.

But we created what we referred to as a transformation agenda. It was a one-page document. And whether you were a part-time barista in one of our stores or the president of a division, you understood with great clarity the core purpose of the company, the humanity of the culture and values, and most specifically, the role and responsibility of what we had to do as a company to restore confidence in the brand and the experience.

MORGAN: What are the parallels between the decisions you took then to correct the difficulties at Starbucks? What parallels do you see with America incorporated?

SCHULTZ: First off, I want to be extremely respectful of Congress and the president. I think turning a company around is a very different challenge than turning the country around. But perhaps there are some tools or resources that are applicable.

I think the first thing is you have to reduce the agenda to the lowest common denominator, and sequence the things that are most important because you can't do everything at once. There has to be 100 percent transparency, truth, and authenticity among the leaders.

And people within the company -- and we employ 200,000 people -- have to have faith and confidence in what the leaders are doing, why they are doing it. And there has to be a collective understanding about what's in it for them. What I mean by that specifically is it's not enough for a group of white collar workers to achieve success and rewards. Success has to be shared. I think we learned that a long time ago at Starbucks. When we started our company, we did something that was very uncharacteristic. Way before there was health care in America in terms of the administration, Starbucks was the first company in America to provide comprehensive health insurance for every single employee, including people who work 20 hours a week. That's a cost of 250 million dollars a year for our company.

But the challenge, then and today, was to preserve the core values of the company while we were restoring it back to the glory of what it once was. And specifically what I mean by that is achieving the fragile balance between profitability, social conscience and benevolence.

MORGAN: When I hear you say that, Howard -- when I hear you say that, there are obvious parallels there with America. Because President Obama's challenge is to restore America to greatness, but by doing so maintaining the core values of what made America great in the first place.

SCHULTZ: If I was sitting here -- and I think I have a license to say this, because I grew up in the projects of Brooklyn, New York, on the other side of the tracks. I understood what it meant not to have access to the American dream as a young kid.

I think the most important thing that I think everyone in America must have is belief that wherever they live, whatever station they have in life, that the American dream is alive and well. I think the fracturing of trust and confidence is in the American dream.

We must restore the emotional relationship that people have to the idea of America, that no matter where you come from, no matter where you live, that you have access to the same opportunities that somebody who is born in privilege. I think when I read the letters I have received from so many people who are hurting, if members are reading these letters -- and I'm sure they're getting their own. I can't understand why they don't understand the specific responsibility of their oath.

And that is to represent all of America and get back to solving America's problems. I don't believe this is that hard. I think we are making it that hard because we're fighting one another, as opposed to trying to focus on what's most important. And that is the American people.

MORGAN: There's also, Howard -- if you don't mind me jumping in there, there's also this question on how to deal with globalization, and in particular China. Fascinatingly, you have set up the Starbucks China club. And you are learning Mandarin. You, Howard Schultz, as I speak.

When I come back after this break, I want to talk to you about why you, as opposed to Donald Trump, who sees them as the enemy, see China as a potential friend.

(COMMERCIAL BREAK) (NEWS BREAK)

MORGAN: Back now with Starbucks CEO Howard Schultz. Howard, tell me about the Starbucks China Club, because this is an institution set up within Starbucks, in Seattle, I think, where all the top -- I think 300 top executives get together. They learn Mandarin and they learn about Chinese culture. Is that right?

SCHULTZ: You're doing your homework. But I didn't know -- how did you find that out about the China Club?

MORGAN: I have spies everywhere.

SCHULTZ: OK. We have about 900 stores in greater China, about 450 in the mainland. We think there's an opportunity for thousands of stores. And I think given the opportunity and the size of what Starbucks could be in China, and the amount of Chinese Americans we have working for the company -- someone came up with the idea to really start a club in which we could understand with great sensitivity and respect the Chinese culture.

I think when other people have made comments, which I do not agree with, that China is the enemy, I don't believe that. I think the enemy is within. And specifically, let me give you an example of that.

This is the first time in many, many decades, Piers, where we have more jobs of people working for the government than we have manufacturing jobs in America. I believe we're down to nine million manufacturing jobs, and over 30 million people working for the government.

The problem is not China. And the problem is not Asia. The problem is that we've allowed, because of unintended consequences, the manufacturing jobs of America to move overseas. This is another I think example of what we have to do. And that is create an opportunity for very smart people to focus on solving the problem and creating new ways to innovate around manufacturing. And I think provide incentives --

MORGAN: That's the key thing, Howard. Let me pull you up on that, because that seems to me to be absolutely the heart of the American problem right now. When I hear people like you and I hear Steve Jobs talking about Apple's global expansion -- you look at McDonald's, you look at any of these companies -- I went to Shanghai recently. Just full of superstores from Britain, Tescos in the case that I was reporting on at the time.

You look at Nike, apparently have 3,000 stores throughout China. It seems to me there are certain types of American businesses and business leaders who get this and who are aggressively taking their products, made here or their products taken over there and made there, into China, and selling them to the Chinese.

There are lots of other businesses standing back, saying, whoa, this is all too scary. They're the enemy. We can't help them. That has to be wrong. The answer has to be America having more Apples, doesn't it? More McDonald's, more Starbucks, more things created by Americans that the Chinese want.

SCHULTZ: Well, we live in a global society. And that global society I don't put a label on. I think the opportunities that private enterprise has to extend the brand in their business to the people who are buying the product. But I think you bring up a subject that I think is important.

Great companies that build an enduring brand have an emotional relationship with customers that has no barrier. And that emotional relationship is on the most important characteristic, which is trust. And if you bring that back to America, I think whether you are Democrat or Republican, I think most people would say that for whatever reason -- and there are many -- that we have fractured the trust that we used to have in government.

I believe that can be restored. And once it is restored, because of people doing the right thing, we get back to doing the work of representing the people the right way. But the problem we have right now is that we have -- for whatever reason, the unintended consequences of what happened in Washington has fractured the opportunity for Americans to trust their representatives.

And if you look at the statistics, I believe it came out last week, over 80 percent of the people who were polled did not have trust and confidence in Congress. And that's a tragedy. These are good people who have been sent to Washington to do the right thing.

And for whatever reason, they are doing things right now that are inconsistent with the interests of the American people.

MORGAN: Well said, Howard Schultz. It's been a pleasure talking to you. Thank you very much.

SCHULTZ: Thank you, Piers.

MORGAN: Coming up, a preview of my interview with high brow heart throb Josh Groban. You'll see a side of him that you may not know.

(COMMERCIAL BREAK)

MORGAN: Tomorrow, the larger than life rock star Meatloaf, a man who recently collapsed on stage and then went back on to finish the show ten minutes later. And he says I can ask him anything and I intend to. Tomorrow, our no holds barred interview.

Plus singer Josh Groban, he reveals a side you may not know. Listen to this.

(BEGIN VIDEO CLIP)

JOSH GROBAN, SINGER: Piers, you have some Tweets that are mighty epic. You -- I feel that perhaps I might want to give some of your very dramatic, very passionate Tweets the gravitas that they, quite frankly, deserve.

This one -- I wish I had a piano, because that would have made this a whole lot easier. But this one calls for an operatic, "memo to all the spotty, tax-dodging, dough-scrounging anarchists in London, please just give it a rest for today, can you? Thanks."

I like the thanks at the end. I feel like -- this is good. "This parrot is the smartest animal I've ever seen. Amazing."

Yeah. I don't know.

(END VIDEO CLIP)

MORGAN: That's Josh Groban, singer, heartthrob and a pretty funny guy, tomorrow night.

An interesting evening this evening. If Christine O'Donnell is watching, you're very welcome to come back tomorrow night live and finish what we started. That's all for us tonight. "AC 360" starts right now.