By Dane Smith, president of Growth & Justice
Steve Forbes has a reputation as a fiercely zealous capitalist, and in general we need much less of such wild-eyed fundamentalism – from both the right and the left – in policy and politics.
But I went to hear his speech in Minneapolis last week, partly because my friend Mitch Pearlstein at the Center of the American Experiment graciously offered me a seat, and partly because I always like to know what the smartest anti-government adversaries are saying.
I was pleasantly surprised that Forbes delivered a message that was bullish about the future, candid at times in admissions of Wall Street failures, and mostly lacking in incendiary, Tea Party polemics about the evils of all things public and governmental.
Forbes, who ran for president in 1996 and 2000, is a fabulously wealthy publisher who inherited the Forbes magazine empire from his father, Malcolm Forbes. By most accounts, the junior Forbes has worked hard to deserve his place at the top of the American economic aristocracy.
He is best known as an advocate for cutting taxes, especially on the rich, and as the apostle of the so-called flat tax – and he’s been mostly scornful about the role of government as an economic regulator and equalizer.
And he got off some pretty hard shots at the CAE fundraising event, against both health care reform and the growing federal deficit.
But he sounded imminently sensible in making these points:
• Capitalism has a moral foundation, in that “you don’t succeed unless you meet the needs of other people” but, he added, that “doesn’t excuse what Wall Street did,” especially mortgage bankers.
• While to some it “looks like free markets have ill-served us,” Forbes said, the larger and more accurate picture of the U.S. economy is one of remarkable productivity, resilience, innovation and growth that actually outperformed India and China in raw dollars, even in recent years.
• Rather than a call for abolishing the Federal Reserve and any governmental role in oversight of the economy – as some extremists do these days – Forbes implicitly endorsed a Fed that would strengthen the dollar, print less money and keep credit tighter.
• Repeating his points from a magazine column more than a year ago, Forbes called for judicious reforms in regulation, especially “mark-to-market” accounting rules, and he actually praised the Democratic Congress for reforming that irrational system earlier this year.
The most important takeaway was that Forbes, unlike some sky-is-falling conservatives who declare that the Obama administration’s policies are about to destroy capitalism, believes that the system is essentially sound.
Forbes noted that despite all the gloom about trillions in market losses in recent years, the United States and its citizens and businesses still have some $70 trillion in assets.
In short, we remain a nation of unequalled and fabulous wealth, albeit one of the most unequally distributed economies among the wealthy nations.
The fact that Forbes did not mount an all-out anti-Obama screed was counter-intuitive, but it was reinforced in a commentary from syndicated conservative columnist David Brooks a few days later. (Brooks also was a Center of the American Experiment speaker this year.)
Continuing his pattern of evolution toward a far more reasonable accommodation of public investment and moderation on tax-and-budget policy, Brooks opined that Treasury Secretary Timothy Geithner has been mostly right and has been vindicated for the massive outlays of taxpayer dollars to stabilize the economy.
Noting that early on both the liberal New Republic and a panel of Wall Street Journal economists gave Geithner an “F,” Brooks wrote that the “financial sector is in much better shape than it was then. TARP money is being repaid, and the debate now is what to do with the billions that were never needed.”
Brooks went on to say that the left was wrong in calling for nationalization of the financial industry and the right was wrong to fault the administration’s pragmatic tactic of having the federal government act “as aggressive(ly) as possible, as early as possible.”
The crisis is not over yet, Brooks concluded, and the nation and its president face three cross-cutting pressures: a need to reduce deficits, a rising populism in Congress, and “intense public cynicism about government, which means that every debate is washed in negativity.”
Cynicism and negativity, about our private sector and our public sector, are our enemies. To borrow from Franklin Delano Roosevelt, the only thing we have to be cynical about is cynicism itself.
Constructive and honest criticism are always in order, but it’s great to hear voices of reason and balance from both sides in these perilous times.
And listening carefully to the more thoughtful conservatives is always a good idea for practical progressives.
A version of this column originally appeared in the St. Paul Legal Ledger Capitol Report on Thursday, November 26.
Dane Smith is president of St. Paul-based Growth & Justice, a progressive research organization that focuses on economics and state-and-local budget issues. He also spent 30 years as a journalist for the Star Tribune and Pioneer Press, where he delved into state, local and federal governments and politics.