Introduction: Steve Forbes is Chairman and Chief Executive Officer of Forbes Media. He is also Editor-in-Chief of Forbes magazine. The company's flagship publication, Forbes, is the nation's leading business magazine, with a circulation of more than 900,000. Steve Forbes writes editorials for each issue of Forbes under the heading of "Fact and Comment." A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award four times. He was a Republican candidate in the U.S. presidential primaries in 1996 and 2000. The Internet site, Forbes.com, averages 18 million unique monthly visitors, and has become a leading destination site for senior business decision-makers and investors. Other Forbes Web sites are: Investopedia.com; RealClearPolitics.com; RealClearMarkets.com; RealClearSports.com; and the Forbes.com Business and Finance Blog Network. Together with Forbes.com, these sites reach nearly 40 million business decision-makers each month. Mr. Forbes serves on the boards of The Ronald Reagan Presidential Foundation, the Heritage Foundation and The Foundation for the Defense of Democracies.
Daily Bell: Please answer these questions as if readers were not aware of your famous magazine, your articles or frequently quoted opinions. Thanks.
Steve Forbes: Okay. Go ahead.
Daily Bell: How has Forbes magazine been holding up in the Internet era? It was probably the most successful business magazine of the late 20th century in America, but what is your strategy going forward? Does it preserve the irreverent Forbes brand or will Forbes gradually turn into something else? … Do you have any new initiatives planned?
Steve Forbes: I think that we recognized years ago, say the mid-'90s, that the Internet was for real. We invested in the Web in a very big way making sure the website was not an appendage of the magazine. We put the website in a separate building, with separate staff and let the baby grow. It grew very nicely. Today the site has 18 million unique visitors a month with our affiliated sites another 10 million or so.
We see our mission as remaining unchanged which is to give our viewers, visitors and readers the kind of unique information and inside analysis that they need to start businesses, run businesses, to invest and also live outside the office. We believe in entrepreneurial capitalism. We are, you might say, similar to a drama critic, we love it when the show is done right, hate it when it's done wrong. Same thing holds true for companies and business people and entrepreneurs. When they get it right we are delighted; when they misuse capital, we are pretty hard on them. The mission has remained the same, but now going forward the staffs of the magazine and the website have been combined, both on editorial side and the marketing side, because we believe that while the platforms are different, the missions are similar. The website is doing well.
Daily Bell: What do you think of the Internet? We think it is changing the face of media. Were you surprised by its growth and impact? How can media generally accommodate its power and influence?
Steve Forbes: Everyone is trying to figure out how you move and prosper on the Web. There are no set answers yet, and I don't think there ever will be. But clearly the Internet has given us infinitely more sources of information, which make a respected brand a vital one that people trust as something more valuable than ever before. I think people want to go to sites where they know the product and trust the information they will get.
Daily Bell: Switching gears. Do you plan to run for president again?
Steve Forbes: No. I am an agitator now.
Daily Bell: What is your overwhelming political concern these days? Is it financial? Economic? Sociopolitical? What are you most worried about for America?
Steve Forbes: Right now my biggest concern is misbegotten ideology and economic thinking from Washington. What we are experiencing now is what you might call a form of soft-core socialism or quasi-Third World socialism where the government doesn't take over industries but, in effect, dominates industries so that you can't do anything without the permission of the federal government. You see it in health care, in finance and in the new so-called financial reform bill. I think the Obama Administration is going to make a move to get its hooks in a very big way into energy. Companies will remain ostensibly independent, but their activities what they can do and how much they are allowed to make will be determined by the White House or the bureaucracy.
Daily Bell: Are you worried about a growing authoritarianism in America?
Steve Forbes: Well, I am worried about this economic authoritarianism in which you have to have government approval to do anything, yes.
Daily Bell: Is the war on terror exaggerated to further enhance the authority of the federal government?
Steve Forbes: In the US there has always been a tension between freedom and ensuring the ability to fight an external threat. So I think what we are seeing now with the Obama administration is government omnipotence at home and impotence oversees.
Daily Bell: What do you think of the neoconservative movement? Do you consider yourself a conservative, a classic liberal or something in between?
Steve Forbes: I think that depends on how you define neoconservative. I am a conservative. I believe in traditional liberal principals of liberty. So anything that revives conservatism is to be applauded. And I think the American people are now seeing first hand the limitations of government powers in terms of being a benefit to society. Government has some unique and important functions; but as far as its running health care, energy, finance, insurance, autos and whatever else they are taking over, NO.
Daily Bell: What do you think of the American Libertarian Party?
Steve Forbes: Well, I think the libertarian movement is a recognition that there needs to be bounds on government, that people need sensible rules of the road and the space to do what they wish to do. It's similar to an automobile; you are not supposed to drive when you are drinking, but that doesn't mean the government tells you what to drive, where to drive and when to drive.
Daily Bell: You have studied economics for most of your life, it appears. Do you consider yourself of the Austrian School? Are you surprised by the progress the Austrian School has made in the 21st century?
Steve Forbes: The basic tenets of the Austrian School have withstood the test of time, and while I may have some variation of views on how you'd implement say, the gold standard, I think the basic tenets are absolutely there. Hayek, Mises and – though he's not considered a fully part of it – Schumpeter had insights on entrepreneurship. Liberty is good, government domination is NOT!
Daily Bell: You mentioned a gold standard. Should the Western world return to some sort of gold standard? What would it be? Is it feasible?
Steve Forbes: We will return to a gold-based monetary system. I don't think we'll go back to a 1920s or 20th century-style gold standard. But I think monetary policy will be tied to the price of gold, which manifestly it is not today. So, yes, a gold-based system is coming back, and it will be good!
Daily Bell: Would you like to see drugs legalized?
Steve Forbes: It depends what drugs you are talking about. Lipitor, yes! I think there needs to be restrictions on hard drugs to which you can become easily addicted.
Daily Bell: Where do you stand on the immigration debate?
Steve Forbes: I am very much for legal immigration. We need to institute policies that will fulfill our own internal needs, whether it's for workers with high-tech skills or for traditional starting service jobs. We ought to face up to the problem of illegals doing the work many of our citizens will not perform instead of averting our eyes. One of the things that has to be done is to reform our immigration service so that people who play by the rules don't get punished.
Daily Bell: Is President Obama doing a good job? Why or why not?
Steve Forbes: He is not doing a good job, particularly regarding the economy. Look at all of his binge spending; he ignores the issue of where the money is coming from. It's not from heaven or a ship from Mars; it is money taken from the people, either through borrowing, taxation or inflation. One way or another it comes out of our pockets. His raising tax is very destructive. His taking over health care is highly destructive to people's health. These massive bills, 2,300 pages at a pop, are written in vague language, which gives enormous discretionary powers to the bureaucracy. And that's deliberate! Obama realizes you don't have to nationalize industries to in-effect control them and make them vassals of the federal government.
Daily Bell: What do you think of the Tea Party?
Steve Forbes: I think the Tea Party movement is a positive thing. It is leaderless, which is good. It's citizens, families and individuals coming together who are worried about what Washington is doing. This is people on their own, not supported by taxpayers' dollars, and it has Washington frightened. Washington does not like spontaneous movements; it likes to control things.
Daily Bell: What do you think of Sarah Palin?
Steve Forbes: She's a formidable national figure. I don't think she'd be elected if she runs for president, but as we saw the other day in Alaska, when she anoints a candidate, lays her hands on a candidate, that candidate becomes viable. And even when a candidate does not win, that candidate becomes a much more serious candidate once Palin provides her endorsement. I have never seen anything like it, where an endorsement by an individual has such an enormous impact.
Daily Bell: What do you think of Ron Paul? Is he realistic or is he like Robert Graves's "Claudius" – harkening back to a republic that can never come again?
Steve Forbes: Today the punditry would say, Ron Paul is unrealistic, but the nice thing about America is that what is today's unrealism becomes tomorrow's conventional wisdom. I think there will be a very real examination during the next five years of our monetary policy – including hitching the dollar to gold, which some of us have been advocating for a long time. There is no substitute for a reliable compass.
Daily Bell: Ron Paul has emphasized a less aggressive foreign policy. What do you think of the Afghanistan War? Do you think America ought to leave?
Steve Forbes: No. America is not going to be able to leave Afghanistan any time soon. I think what we should be doing now that we're there is following the precepts of counter insurgency: work with the local people and maintain sufficient forces to be able to do that and hope for some semblance of stability. To leave now would set in motion a Cambodia-like blood bath.
Daily Bell: Is there going to be war with Iran?
Steve Forbes: I think Israel at some point – and I have learned not to give a timetable on these things – will make a strike on Iran's nuclear facilities.
Daily Bell: Does Israel have too much influence on the American political system and foreign affairs?
Steve Forbes: The answer is no. One of the proofs of this is that Israel tried to get a green-light to go after Iran from the Bush administration two years ago. The administration said "no," even though it was considered very friendly to Israel. Meanwhile, President Obama is more hostile toward Israel than any other U.S. administration in decades. So in terms of the big things, Israel might have influence but it's not omnipotent.
Daily Bell: More international questions: Will the euro survive? How about the EU? Will we see a two-tier EU?
Steve Forbes: I think the euro will survive, if only because the EU countries have invested so much political capital in it. One way or another they will make it survive. But what the bureaucrat should be focused on is creating a more perfect union, a more perfect free trade area in which barriers of goods and services are removed. That way there would be more economic opportunity and efficiency, freer flows of capital, more and more entrepreneurs would have the chance to rise up. The EU should be focusing on its onerous tax and regulatory barriers. It should adopt the Irish tax rate of 12%.
Daily Bell: Is China headed for world dominance or an inflationary depression or something in between?
Steve Forbes: I don't think we are going to see Chinese dominance in our lifetime. China has made enormous advances since the 1970s but it still is a long way from having an economy that is self-regenerating and that allows for genuine entrepreneurship and innovation. Government still has a very heavy hand. The US has been through numerous crises. We have always emerged from them when reforms have been made and people are liberated. The US also has a record of innovation that is second to none in the world.
Daily Bell: Do the Chinese expect the demise of the dollar as the world's reserve?
Steve Forbes: They feel that it might slowly happen, but they won't want that to happen because they own a lot of dollars in devalued assets and no one likes to lose money.
Daily Bell: Where is the US economy headed? Will there be a double-dip "recession"?
Steve Forbes: It won't be a double-dip recession, but we will lumber along. Large companies have fortified their balance sheet, but there's a deep reluctance to hire because people don't know what the rules of the game are. They are facing huge uncertainties from health care, huge uncertainties from this so called financial reform bill – who-knows-what policies Washington will espouse regarding energy. So if you can avoid hiring, most employers try to avoid it and use temporaries, institute extended hours and contract with workers as well as independent contractors. Washington has created massive amounts of uncertainty, which is deadly for vibrant job creation.
Daily Bell: We see this fiat money bear market lasting another five years at least. Agree? Disagree?
Steve Forbes: I think you will start to see life again in the markets if people sense that there's going to be some very positive change in November. If people like Rand Paul and Pat Toomey go to Washington then you will see the big push after the 2012 elections for a president who has at least some understanding of free markets.
Daily Bell: Should the Fed be audited? Should it be abolished?
Steve Forbes: The idea that there would even be a controversy over auditing an entity as powerful as the Fed just makes your eyes roll. They have less formal oversight than does the CIA. No one wants Congress running the Fed, but Congress created the Federal Reserve and it has no accountability; therefore, there ought to be some system of accountability. This is absolutely lacking today. This is partly true because politicians find the subject boring, even though it's important. They find it scary and they are very uneasy around it.
Daily Bell: Will the IMF succeed in making the SDR the world's reserve currency?
Steve Forbes: No, because as much as they want to have conferences and wave wands you cannot dictate a global-reserve currency and have it become a reality. As you know, the SDRs were created back in the 1960s and were called paper gold. They have been around for 40 years and are an artifact of central banking. But reserve currencies come out of the forces of the marketplace not communiques from bureaucrats.
Daily Bell: Have we seen the end of bailouts?
Steve Forbes: The administration is continuing to push them. The next big push will be on bailing out union pension plans that have been run into the ground, not to mention state and municipal pension funds. I think an environment exists today, in which these bailouts can be defeated. But make no mistake: This President is going to make two big pushes regarding union and state and municipal pension plans.
Daily Bell: Where are gold and silver headed?
Steve Forbes: Ask Ben Bernanke (laughing). If he keeps printing money they will continue go up.
Daily Bell: Where are commodities generally headed?
Steve Forbes: If Bernanke keeps printing money, they will go up in nominal value.
Daily Bell: What are the most important seminal articles that you would encourage everyone to read? Where can they be found?
Steve Forbes: On Forbes.com and Forbes magazine! Seriously, here you can read pieces written by such people as Amity Shlaes, who wrote the book The Forgotten Man on the Great Depression and how Roosevelt messed that up. And David Malpass, who is running for the Senate in New York and has written some important pieces on the misbegotten policies of the Federal Reserve. Bill Isaac is another good one and Brian Westbury has a very good take on misbegotten policies like mark-to-market accounting rules and the way regulators applied it.
Daily Bell: What inspires you to write and to run a successful world-class publishing company instead of just retiring and enjoying your life and wealth?
Steve Forbes: You get more out of life when you are living it with a purpose. You can have more than one purpose, but having a goal and having a sense of what you are trying to do is what gives life meaning. So sitting back and enjoying wealth, well, what would I do? Just watch FOX and get depressed? No, I want to do something.
Daily Bell: In closing, what would you like to say to our readers about the coming times?
Steve Forbes: Expect turbulence but also know that thanks to citizen agitation we are laying the groundwork for fundamental change in this country. In this case it is REAL change, going back to basic principles, going forward with basic principles instead of the statist, Third-World, soft-core socialism that we are getting from the current administration and Congress.
Daily Bell: Thank you for taking time to speak with us out of your busy schedule.
Steve Forbes: Thank you.
Daily Bell: Thank you, too, for your time and efforts to support freedom. Good luck!
There is much in this interview that more fervent libertarians might find intriguing though not entirely satisfying. Yet it is hard to be a revolutionary when one is scion to a great publishing empire. Give Steve Forbes credit: He's an important media figure and heads a series of significant media properties. Yet he answered all our questions and in many cases provided significant information. In many of his sentiments he sounds more like Ron Paul than Barack Obama, and that's certainly a good thing from any sort of libertarian standpoint.
Once past the libertarian-conservative divide, in fact, we see much of interest. We've predicted ever since the inception of the Bell (and longer than that, actually), that sooner or later a major revaluation of US money is coming. Steve Forbes himself has long focused on a return of a gold standard of some sort. Of course we don't prefer a classical gold standard defined and controlled by the state (and thus the power elite that stands behind it). We would prefer a private, market-driven gold and silver standard such as has emerged from financial and societal upheavals in the past. For most people such a flexible standard would be preferable. The wealthy of course have more to lose.
Steve Forbes makes a number of other points of note. He has run for US president and has inherited a major business media franchise. It might be said that his views represent the authentic perspective of a certain kind of American power broker. The three most important points he makes in this interview are: 1. Arrival of a gold standard (as mentioned above); 2. Potential war with Iran; 3. America remaining in Afghanistan.
The bad news? It is frankly discouraging to hear such an important and prescient individual predict that the US and NATO will not leave Afghanistan. It is even more discouraging that he sees Israel, sooner or later, bombing Iran. This presages some sort of world war, in our opinion, and is no small prediction. We cannot imagine the ramifications – especially when it comes to Russia and China.
Iran has never dropped nuclear devices on anyone and the threats that Iranian leaders have made (especially about "wiping Israel off the map") have been mistranslated, apparently. Not only that, but Iran's leaders must know that bombing Israel with nuclear weapons would spell the end of the regime if not of their lives. Pakistan, a fervently Muslim country, already has nuclear weapons but they have never been used (not even on India) for the same reason that Iran's nuclear weapons would likely not be used.
Such armaments are defensive in nature, so far as we can tell, when applied to modern warfare. They also, in this day and age, discourage others from using "tactical" nuclear weapons. Iran claims NOT to be making nuclear weapons and seems to be willing to negotiate on a variety of fronts, though as with Iraq the US seems more enthusiastic about sanctions and threats than ongoing discussions.
We may be wrong, of course, but it seems to us that bombing Iran will bring about incredibly negative consequences. Bomb Iran and the price of energy may be measured in the thousands rather than the hundreds of dollars per barrel. And if Iran cannot retaliate mightn't others in the Muslim world? The erosion of civil liberties in the US and EU is already alarming. Marry these authoritarian tendencies to a war with a historic Middle Eastern power like Iran and we have to think the West will end up in a kind of fascist lockdown. Of course, some would argue that's just the point.