Business

Saturday October 3, 2009

Publisher Steve Forbes answers your 10 questions


StarBizWeek: In 1996 and 2000, you were a Republican candidate in the US Presidential primaries. What motivated you to get into politics?

Forbes: I had been heading up a political reform organisation called the Empower American, founded by Jack Kemp, Jeane Kirkpatrick, and Bill Bennett. This was in the early 1990s; Jack Kemp was a prominent political figure then and we though he’d run for President in 1995/06. But he surprised us, a year before the campaign, when he said he was not going to do it. I was looking for another possible Ronald-Reagan (pic) Jack-Kemp-like candidate but did not find any. Instead of complaining, I decided to do it myself, taking on the spirit of my grandfather; he founded Forbes magazine, but instead of writing about entrepreneurs, he decided to become one himself by starting this company (Forbes Inc). I decided to do the same thing.

Do you see yourself returning to politics?

My role now in the United States is as an agitator – to promote changes such as simplify the tax code, advocating a stable dollar as opposed to a weak one, which the Bush and Obama administration have given us. That’s the kind of activities I’d be involved in.

The group is very big in publishing; is it involved in any other business? We are focused on the media business. The other business is commercial real estate. (But) That does not mean that we’d not do any other business.

Steve Forbes

It is perceived by some that you use your magazine, especially your editorials, to push forth your personal view points, hence there are those who question the independence and objectivity (of these articles/editorials). Your comment.

I write on each issue of Forbes and Forbes.Com editorials. That’s it. If anyone watches our television shows on Fox network or Fox News, you get plenty of disagreements, including from our own writers, and they do not hesitate to disagree with me. We have been doing that for nine years now. So the value of the Forbes magazine and Forbes.com is precious as our writers and editors are able give readers analysis, information, insights. We provide value-added information.

If you were a politician, what would be your political stance? Definitely, more conservative than President Barrack Obama, right?

It wouldn’t be difficult to be more conservative than President Obama. We never had a President who had spent as much money in his time and run up a bigger deficit in American history as he has. He wants to nationalise healthcare and put up massive new taxes; I don’t think these are good things for the United States or the global economy.

A weak US is not going to help the other economies. Holding back and creating an environment that hurts innovation, new businesses and job creation is not good for anyone.

When you have the government absorbing the money instead of the people in the private sector and the government proposing massive new taxes and now, a government that has more powers over banks, auto companies, insurance companies, healthcare, it is not a good thing.

Reagan believed in a strong dollar, helped fend off the Great Inflation of the 1970s, sharply reduced income taxes and put a rein on domestic government spending. Reagan had a very rigorous foreign policy, a strong military; that is how we won the Cold War.

Of course times and circumstances have changed but the principles of progress has not and right now the thing that is hurting the world is the very weak US dollar. US economy has not been helped by this massive government spending and this new regulations are hurting small businesses that want to get started and grow.

Without innovation, there will be no progress. Learning to provide new services with products, learning to increase productivity, learning to turn scarcity into abundances – now, that is the essence of a modern economy.

How long do you think the United States will take to come out of the current economic crisis?

Well, we will show some economic growth in the second half this year and next year but unless they make some changes on the dollar and taxes it is not going to be a recovery that creates as many jobs as it should. Small businesses in the United States still find it difficult to get credit. The Federal Reserve still hasn’t fixed that; they promised to do so last January but (Ben) Bernake (US Federal Reserve chief) is too busy patting himself on the back for saving civilisation to get the credit system working again.

But the real question for the future is – will the growth be similar to what we saw in the 1970s. In the 1970s we had even more serious recessions and the recoveries weren’t sustainable. In 1980s, by contrast, we had very vigorous recovery and we had a good 25-year run of prosperity interrupted by two smaller sessions. It was an extraordinary period of expansion. Right now we seem to be in the path of the 1970s rather than the 1980s.

China is supposed to emerge as the world’s largest economy by 2038 if the current growth rate continues. Do you think that China will overtake the United States?

Well, we should learn from the events in recent years of projecting the present on an item into the future. There is no question that if China continues to pursue policies to liberalise its economy and create an environment that is hospitable to entrepreneurs, then the economy will grow impressively, which is good for China and for the world.

Certainly China understands currencies better than our own government. They wanted a stable relationship between the two currencies, yuan and the dollar, but our government hasn’t learnt that yet. In that sense, they are ahead of us on monetary policy.

It does not mean we have to fight one another. After WW2, Japan became the second largest economy in the world. We often had economic disputes with Japan but we never used arms against each other.

Asian countries have accumulated a lot of reserves. Should Asians spend more and Americans less?

Governments shouldn’t be telling people to save or spend. If we have a stable currency system and governments, such as in Malaysia, are liberalising its economy – financial services and other subs sectors – then these things will just adjust by themselves.

But given what our own government and the British government did with their economies, I have no faith that these politicians can do that (influence investing decisions).

Certainly, the Malaysian government now recognises the importance of creating a good environment for small and mediums sized businesses because that is where the job creation is. That’s a better approach than our government telling people to save more money.

Your father was known to be very flamboyant. Did you take after that trait as well?

It is a mistake to try to imitate other personalities. You are what you are. My father always encouraged his children to find our own interests and do things our way.

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