Veteran publisher and two-time presidential candidate Steve Forbes discusses markets, media and modern political discourse.
Modern Trader:Congratulations on turning 70! How do you feel about the milestone?
Forbes: As my father liked to say, just think of the alternative.
Is there a song that changed your life along the way?
In Hey Jude by The Beatles, there is a line… “You know that it’s a fool, who plays it cool, by making his world a little colder,” — a very, very good observation.
Yes. They range from economic books like George Gilder’s “Wealth and Poverty,” Jude Wanniski’s “The Way the World Works,” all the works of Thomas Sowell, other Gilder books, some biographies of Alexander Hamilton, and starting as a kid with Bible stories. There have been a number in 70 years.
Media political bias is well documented. As an example, the full-time U.S. journalists who claim to be Republican dropped from 26% in 1971 to 7% in 2013, according to a study by Indiana University, Professor Lars Willnat and David Weaver. A 2016 Politico poll found that of the 72 press corps members asked, they were all registered republicans — how did this come to be?
People of a liberal ilk seem to be more inclined to go into journalism. Journalism involves words and writing, rather than running a business.
Does political bias exist within Forbes media?
There are a lot of people here who probably wouldn’t subscribe to my philosophy [but] I don’t know, and I don’t ask, as long as they turn out good copy, I am not going to care.
Which political media platforms do you have high regard for?
The web is a relentless commoditizer, and if you don’t have a strong brand, you’ll be grounded to dust. There is a lot of noise out there, but if you don’t have something distinguished it’s going to be very hard for you to survive and thrive. The turnover is enormous. And that’s why sites like Forbes.com, The Wall Street Journal’s web site (wsj.com) and a handful of others do so well. Obviously, sites like RealClearPolitics.com do well in part because they’re aggregators. Politico, and even though I don’t agree with them philosophically 90% of the time, it’s a good barometer of what’s happening politically. And of course, you always have to look at the Drudge Report.
In 1999, you said that, “Now that the Cold War is over, we no longer need such a massive centralized Federal government. We should now downsize Washington and shift money, power and control back to individuals, families and local communities.” America faces new, more challenging security threats since you made that statement. Has your thinking evolved?
Well, we face challenging security threats, but of a very different character than those of the Cold War, not to mention the two World Wars as well. And, well, we need to beef up our defense spending. There is a lot that can be done to get more for our money in defense, especially in the area of procurement. And the key, though, is getting our economy growing vigorously again. Then we can meet our global obligations by spending between 3% and 4% of GDP on defense. And in terms of downsizing the government, that means, among the big things, getting more patient control of healthcare, simplifying the tax code with a flat tax and giving parents school choice for their children. There is a lot that can be done to reduce the scope of government, and people would applaud it rather than fear something is being taken away.
If there was one new government policy, regulation or legislation that you could enact by fiat, to better the lives of all American, what would it be?
Linking the dollar to gold. Alexander Hamilton did in 1791 and the gold standard lasted 180 years, during which time the United States experienced the highest average annual rates of growth in world history. Since we went off gold, growth has slowed markedly.
Have there been any social issues on which you’ve evolved in recent years?
I am pro-life. I am also libertarian. So if somebody wants to go wreck their lungs by inhaling weed, which is far more powerful than it ever was when I was in college, go ahead, just don’t ask me to pay for your health care bills.
Do you see any conflicts in being both pro-life and libertarian?
Grade President Obama’s eight years of policy substance.
D-, the only reason I don’t give him an F is that he had substance, just the wrong substance.
President Obama’s political style?
“C,” and the only reason it doesn’t look worse is because the Republicans floundered. It’s like having a football team and the defense of the other team is no good. It doesn’t mean your offense was great; it just means the other side’s defense was awful.
Your grade for President Trump in terms of the policy substance that he has articulated thus far?
Let me be a harsh grader, an “A-.” I’d give him an “A,” but [without] the tax bill, yet, I’ll be conservative, “A-.”
His political style?
His political style is absolutely unique, so you have to give it an incomplete. Whether it’s going to lead to anything substantive, we will see.
What advice would you give the president as to how he might improve the administration’s optics, and messaging?
They’ve got to change this daily press briefing. It doesn’t mean you ignore the press but doing more online may have a better chance of getting through in terms of substance instead of the “gotcha” game you see now. Remember the Obama administration was a press control freak — very Nixonian.
Trump and Twitter?
Well, if it’s focused on things like tax cuts, yeah. One thing Trump discovered is that people read tweets more than they do press releases. If you want to get a theme out, that’s the way to do it.
Who do you think will be the Democratic nominee in 2020?
It will not be Hillary Clinton nor Chelsea. I would guess it’ll probably be a CEO. Which one, I’m not sure. Whether Howard Schultz at Starbucks, Robert Iger at Walt Disney or someone else. I don’t think they’re going to go for Bernie Sanders or Joe Biden or Hillary. They’re going to try something totally different.
He would break the mold like Trump did. Not sure, though, that he has the themes to go the distance.
Does a third party have any chance to succeed in the United States?
The answer is no. The Electoral College makes that very difficult. Even if you get a plurality of the popular vote, if you didn’t get those 270 votes in the Electoral College, then it goes to Congress and you are going to have a very hard time surviving.
Favorite musical artist living and dead?
Elvis Presley and Leon Russell. Living, there are a number of them ranging from the [surviving] Beatles, the Rolling Stones, Stevie Wonder and Tina Turner.
Your business heroes?
In addition to my father and grandfather, A.P. Giannini, Alfred P. Sloan, Henry J. Kaiser, Ruth Handler and William Knudsen.
Any current CEOs on your list?
What is the best investment that you have ever made?
Which sector of the stock market do you feel has the most opportunity for the year ahead?
Healthcare. And high tech will still do well in the next five years.
The Trump bump has resulted in a significant post-election market advance. How does it end?
It’ll end if they don’t get a tax bill through; a good one. And if they get a good one through, you’ll see less movement, reward from big stocks [and a rotation into] smaller cap Russell 2000 stocks.
Congratulations on 50 years of financial publishing and your 70th birthday; what have you learned that is essential to pass on to investors?
It’s more fun to buy stocks when they’re going up than watching them go down. The other thing is, my grandfather said you make more money selling advice than following it. And finally, in terms of an age where all business models are being fundamentally changed, you have to do what Peter Drucker said you should do, and remind yourself what it is you’re trying to do, what your mission is. Then even if the tools change, you won’t be too discombobulated.