Special Report

General Forbes Returns

Steve Forbes takes the battle to Obama and the statist quo.

By 7.16.10

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LAS VEGAS -- Nearly two hours into the Liberty Ball that closed out FreedomFest, Thomas Jefferson, Ben Franklin, John Adams, and comedic foil Roger Sherman interrupted the pop-lite meanderings of the colonial attire-festooned house band to perform "The Spirit of 76." The first half of the musical skit, wherein the Founders argue over who will write the Declaration of Independence, earned its share of laughter and applause, but nothing to quite match the roar the met Steve Forbes as he ascended to the stage as General George Washington, eyes twinkling above a mile-wide smile despite the marshmallow-y brace around his neck.

Washington grouses over the lack of a teleprompter, then casually muses there was "never a good war or bad peace," a phrase which Franklin, of course, immediately vows to "borrow."  

"Throw me a royalty," Washington shoots back before Forbes steps out of character to ad-lib to the crowd, "We're capitalists. Some habits are hard to break."

Indeed, they can be, although in other quarters -- *cough* Congress *cough* -- the free-market and individual liberty tendencies have been abandoned with the sadly predictable ease of a political class that increasingly views the skeptical individual as more hurdle than constituent.

Forbes, however, is ready neither to say "die" nor "regulate." The stint as George Washington capped a weekend of appearances during which (coincidentally?) the publisher, two-time presidential candidate, and unrepentant champion of laissez faire often sounded like General Forbes.

"What is happening in America right now is an aberration," he declared at one point. "This is the last stand of statism."

Forbes is no Ivory Tower chieftain. I sat in on at least a half dozen small -- some very small -- breakout sessions at FreedomFest that Forbes tiptoed into as inconspicuously as possible, sitting and listening in seemingly placid, thoughtful reverie, offering the occasional gracious nod when a speaker's voice rose a register as she noticed him in the third row or a well-wisher approached to chat or someone asked him to sign a copy of his (wonderful) new book, How Capitalism Will Save Us­ -- a tome which, much as I love Hayek, many newly aroused/engaged tea partiers would likely find considerably more accessible (and, therefore, enlightening) than Road to Serfdom, at first contact, anyway.

Forbes could easily have stuck to the featured luncheons and the big room. Instead he got down with the hoi polloi and dug into the fecund grassroots minutiae. Whenever you saw him traipsing the halls of Bally's Resort and Casino between events, it was never without that singular smile leading the way. And when he spoke, it was never without the sort of good humor, passion, and feisty intellectual verve that will be utterly necessary if we hope to salvage anything from the ever-strengthening assault of the state.

"I NEEDED BACK SURGERY, AND I FIGURED I better get it while it's still legal," Forbes cracked at the outset of his Friday morning keynote speech, jabbing a finger up at the thick neck brace for emphasis. And then he warned us that explicating the "severe headwinds" the American economy faces would require wading into the theoretical weeds a bit.

"Monetary policy is not the most exciting subject in the world," he cautioned. "You say monetary policy in polite company and people's eyes start to go heavy and they nod off. If any of you are single, on a bad date, and want out, talk about monetary policy. You will never see that individual again."

This default conspiracy of silence has, unfortunately, led to what Forbes called a great "myth of the modern era": that government can create money. "Governments can print paper," Forbes said, "but real money is created by real people doing real things." Manipulating interest rates and overheating the Federal Reserve printing presses, he said, "juiced" the housing bubble, encouraged currency speculation, incentivized bad banking and consumer decisions, and is now injecting uncertainty and volatility into an economy that hardly needs it.

"Weak money means a weak recovery," he said. "If cheap money, ladies and gentlemen, was the way to wealth, today Zimbabwe and Argentina would own the world."

While It's the meddling, stupid doesn't seem likely to take off as a political rally slogan anytime soon, Forbes makes a better case against returning to the "failed policies of the past" than the current occupant of 1600 Pennsylvania Ave ever has.

"In ancient times you had to barter," he explained. "Three thousand years ago if I wanted to sell a subscription to Forbes magazine or an ad, what would I get? Maybe a bottle of wine, I don't know what quality, or a sheep? Maybe goat cheese or something? Maybe a camel. Then I'd have to figure out how to turn a camel into something I could pay my writers with. Money makes transactions infinitely easier."

Money, of course, has made Barack Obama and Nancy Pelosi's transactions infinitely easier -- it's very good to be a friend of the palace these days, what with the massive slush funds they've set up. For his part, Forbes chooses to make a distinction between monies exchanged voluntarily and those confiscated.

"Taxes aren't just a means of raising revenue for government, they're also a price and a burden," he said. "Tax on income, price you pay for working. Tax on profit, price you pay for being successful. Tax on capital gains, price you pay for taking risks that work out. When you raise the price of good things -- productive work, risk taking, success -- you get less of those things, lower the price you get more of those good things."

Capitalism leading to good things? Surely ye jest! Isn't capitalism, in fact, to borrow a chapter title from Forbes latest book, brutal?

Perhaps to the chagrin of the Ayn Rand acolytes in the audience, Forbes made a moral argument for capitalism that did not begin with selfishness or end with a denunciation of altruism, instead focusing on the "complicated circles of cooperation and community" free enterprise necessarily spawns; and the empathy operating in those circles inevitably engenders.

"In a sense we're like fish swimming in water," he said. "Fish don't know they're swimming in water. Most people don't know what free enterprise capitalism is all about. The moral basis of it is that it meets the needs and wants of other people. In a true free market, even if you are that Hollywood caricature of a businessman -- you know, loaded, lusting for money, taking pleasure in seeing pelicans drown in oil, loving it when people, especially children, suffer -- even if you are that kind of person, even if you have a nasty personality, the kind that makes babies cry and dogs bark when you walk down the street, even if you're all of that, in a true free market you don't succeed. You only succeed if you provide a product or service somebody else wants.

"They call capitalism soulless, something that drives the good out of us," he continued. "It actually allows us to get outside of our narrow circles of tribes, ethnic groups, and families. It breaks down those barriers."

Forbes also rebutted the statist framing of government as a choice between "massive government regulation or anarchy."

"That is a false choice…Yes, you have transgressions like Bernie Madoff. But just because you have fraud in elections doesn't mean you do away with free elections. You deal with the specific transgressions…Madison was right: if men were angels no government would be necessary. Manifestly we're not angels, except for our grandchildren until they reach a certain age. We do need laws and government and law enforcement."

Enacting "sensible rules of the road," however -- i.e. speed limits, turn signals -- was a far cry, Forbes insisted, from three-thousand page obtuse bureaucratic regulatory bills that essentially "tell you what to drive and where to drive and when to drive."

Like, say, I don't know…the financial reform bill?

"Only Congress would pass a two-thousand page financial reform bill and not get anything right in it," Forbes said, citing the lack of attention to mark-to-market accounting, Fannie and Freddie, or too big to fail. "It's amazing."

EVENTUALLY FORBES TURNED TO THE damned inescapable topic, Obamacare. General Forbes is not a fan. He'd rather see the interstate market for insurance opened up, tort reform, and a targeted deregulation he believes would turn "a hopeless liability into a growth industry," the type of industry where if you ask how much a procedure costs they don't "assume you're uninsured or a lunatic."

"Ask yourself, 'Why do we have a health care crisis?'" he said. "After all, if in any other part of our lives people want more of something it's seen as an opportunity. People want more software, Silicon Valley would be very happy. People want more cars, Detroit would be very happy. Why is demand for more health care seen as a disaster? Why is the fact we're living longer a disaster? As I get older I kind of like longevity. It's nice!… Food is more basic than health care. No food, no nothing. Yet the government does not run the farms. If it did we would not have obesity, we'd all be starving."

Forbes's diagnosis and prescription is too detailed to be done justice in this space -- it's laid out well in How Capitalism Will Save Us, naturally -- but it is worth noting one example he used of free enterprise in medicine: cosmetic surgery, which has increased sixfold over the last ten years but has not seen the same inflation as primary health care -- in some cases prices have decreased due to increased market competition.

"Not that any of you need it," he told the crowd, then quickly added, "That's called pandering. I tried in politics, but it didn't work. That's why I'm here today."

The troops appeared extraordinarily grateful that he was. 

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