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Monday, December 09, 2019

The Wisdom Of Steve Forbes


Steve Forbes, two-time Capitalist Tool candidate for president, acknowledged last week that most Americans, including many of the prosperous, believe that our economic system is rigged against them.

It is both refreshing and shocking to read Forbes acknowledging this awful truth, which polls have shown for several years.

Could it be that this icon of inherited wealth has seen the light?

Might this faithful worshiper of Mammon’s richest disciples henceforth praise only fortunes earned through hard work, competitive markets and honest dealing?

Could he become Steve the crusading knight, leveling playing fields with a sharp pen and standing resolute against the rising tide of welfare for billionaires?

Sadly, this turns out to be yet another lesson in how much America needs a better right-wing punditry, one that engages in intellectual and policy intercourse with all sides, rather than public displays of ideological masturbation.

In a series of National Memo columns this year, I have been documenting how leading right-wing commentators and propagandists posing as news organizations traffic in easily exposed deceptions, manufactured controversies, and outright fabrications. The left has some loonies, too, but their influence is much smaller and their problems are often more ideological blinders than manufactured “facts.”

From the right, sloppy, often dishonest work ill serves the republic. It allows progressives to make fun of crazy wingnut rants, and avoid working through their own often half-baked ideas so they have both rigor and resonance with a broader public.

Forbes now joins the pantheon of fact-challenged right-wing commentators I wrote about herehereherehere and here.

In his “Fact & Comment” column this week, Forbes cited a November Wall Street Journal/NBC News poll, which found that 56 percent of Americans

…believe the political and economic systems are rigged against them. The survey found this demoralizing malaise cuts across all ages, ethnic groups, professions and political preferences. It also found that a fair number of people who have done well in recent years – those who have high incomes and are well educated – feel the system is stacked against them.

Forbes says he knows why, to quote the title of his column, “We feel so rotten.”

Could it be the shrinking ownership of stocks and bonds since 2000?

Or the decline this century in the number of jobs paying $2 million or more?

Perhaps it is the drop in wages and salaries at every level in 2013 except for jobs paying $50 million or more, although even at that rarefied level, the number of these jobs dropped by a third in 2013.

Maybe what Forbes thinks vexes most of his fellow Americans is that 6 of the 400 highest-income Americans paid no income taxes in 2009, despite making an average of $202 million. The next year, when the top 400 soared a third to an average $265 million, only one or two lived tax-free.

No, none of that, says Steve Forbes. The real reason “this malaise” has been growing is because in the year 2002

…the Federal Reserve and the U.S. Treasury Department began to weaken the dollar. Currency instability undermines social trust, leaving people with the feeling that the link between effort and reward no longer holds, that they can no longer get ahead and that more and more the rewards go to those with political connections.

This disenchantment is corrosive and, if not turned around, will lead to ugly political consequences. Leaders here and around the world are utterly oblivious to all of this, especially when it comes to a critical solution: establishing a new gold standard.

If you know anyone who thinks our problem is lacking a gold standard for the dollar, please rush them to your nearest psychiatric facility for evaluation. Forbes personally need not fear a straitjacket or forced medication, because when rich people say crazy things, we don’t lock them up… we just call them “eccentric.”

Furthermore, the dollar has been rising against other currencies, which depresses American exports and therefore restrains or reduces American manufacturing jobs.

What makes Forbes’ diagnosis surprising is the motto that runs atop his column, which I have read for decades: “With all thy getting, get understanding.”

Revealingly, Forbes cuts off the crucial first part of that quote, which may explain his chronic case of an economic disease that could be called “goldbugitis.” Proverbs 4:7 says in full: Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding.

Had Forbes gotten wisdom, he would realize that the problem Americans feel in their wallets is not that merchants disdain their greenbacks.

Now, in Russia, the value of the currency is, for sure, a devastating problem right now.

The ruble has gone all Weimar Republic, thanks to falling oil prices and international trade sanctions as punishment for the Hitler-like annexation of Crimea. Russia, Russian companies, and individual Russians owe about $700 billion in debts denominated in dollars and euros, making the collapsed ruble a crisis. But America is not dictator Putin’s Russia.

American borrowers now enjoy the lowest interest rates in the nation’s history. For savers, though, it’s hard times, with banks paying close to zero interest.

Our national problem is that so much money has been siphoned away by the 1 percent of the 1 percent that most of the people below — the 99.99 percent — are squeezed by a lack of reliable jobs at good pay.

When the vast majority are not properly rewarded for their contributions, the economy suffers from what economists call a lack of aggregate demand. That means that altogether, Americans cannot buy as many goods and services as are needed to make the economy grow at or even near its potential.

That, in turn, erodes the value of business enterprises. No one should know that better than Steve Forbes, on whose watch the family business has been losing value. The empire he inherited has been shrinking, selling off this and that asset. Last July, after a long search, the flagship magazine Forbes became majority owned by Hong Kong investors.

Of course a cynic might look at the latest Steve Forbes column in a different light. Forbes magazine publisher Rich Karlgaard in his column recommended as one of the best books of the year a new tome by Steve Forbes and a co-author titled Money: How the Destruction of the Dollar Threatens the Global Economy — And What We Can Do About It.

But whether Forbes is just trying to buck up his book royalties – no objection from me about that – or he sincerely believes we are all suffering from not having the dollar on the gold standard, the case that the dollar has been weakened is more than a bit hard to make.

The multiyear trend data shows the dollar strengthening against the euro, the Canadian dollar and the Japanese yen. That forces us to pay more for what we import and discourages other countries from buying American goods and services.

That Forbes says a weak dollar is making us all feel rotten when the markets show the dollar is strong and getting stronger should not surprise. Forbes often does not understand what he pontificates about — or, perhaps, hides what he knows.

He loves telling workers they would prosper under his flat-tax plan. What he does not tell them is that the flat tax applies to wages, but not to dividends, interest and capital gains, which means workers would be fully taxed while Forbes could enjoy tax-free living.

Nor does Forbes ever fess up about the roots of his flat tax. It stems from European socialism. He also neglects to explain that the esteemed American economist who came up with the idea, Robert E. Hall of Stanford University, got it from a 1972 proposal by none other than George McGovern, the very liberal Democratic Party presidential nominee.

The Steve Forbes fantasy that the strong dollar is weak and that not being on a gold standard is what vexes so many Americans tells us how ill informed he is. That he writes ridiculous falsehoods, like asserting the dollar is being weakened, and avoids inconvenient facts like his wanting workers to bear burdens he could escape, and that his best-known idea stems from European socialism, enables magic thinking by his readers.

Imagine how much good Steve Forbes could do, however, if with all his getting, he got not just the understanding he so clearly lacks about what vexes most Americans, but an understanding that the principal thing to get is not wealth, but wisdom.

Photo: Gage Skidmore via Flickr


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