How Capitalism Will Save Us
August 6, 2010 by Chip Wood
I’d like to take credit for the title of today’s column but I can’t. It comes from my favorite American capitalist, Steve Forbes. It was the title of a speech he gave at the huge gathering of 2,000 stubborn individualists at FreedomFest last month. And it is also, not so coincidentally, the title of his latest book, which I hope you’ll read.
In his speech, and in an exclusive interview he gave me afterwards, Steve sounded off on several things that are wrong in Washington, D.C., today. The first, he said, is the ridiculous idea that the way to solve excess spending is by raising taxes.
“You don’t reward bad behavior by giving them more of the stuff that got them in trouble,” he declared. “If someone’s been on a bender, don’t give them another bottle of booze and say, ‘okay, next time get it right.’ That won’t work; even it’s a very good brand.”
And then he added, “They’re not going to get it right until you deprive them of the means of spending. That means lowering taxes, not raising them.”
The crowd loved the idea.
“Regulation” was another topic that had the publisher seeing red.
“Only Congress could pass a 2,000-page financial reform bill and not get anything in it right,” he said. “I mean, it’s amazing. They ignore monetary policy. They ignore Fannie and Freddie—two institutions that issued $1.5 trillion in junk loans to finance this charade. They don’t do anything about ‘too big to fail.’ They don’t do anything about the disaster of mark-to-market accounting. You go down the list and you’ll find 2,000 pages of stuff that is going to hurt the economy, not help it.”
And here was a shocker: “Every time you have a 2,000 page bill, you get at least 10 regulations per page. That means 20,000, 30,000, 50,000 new rules coming down the road. Is it any wonder businesses are reluctant to hire? How can you plan for the future when you don’t know what the new rules will be?”
What about all the government subsidies to banks and businesses? The outright takeover of automobile companies and lending institutions?
Steve Forbes’ solution is simplicity itself: “Sever their ties to the government. Cut ‘em lose. Send them out in the public to sink or swim. If they can’t compete in the marketplace, so what? It shouldn’t be our concern. We shouldn’t have to bail them out!”
He received another long round of applause and foot-stomping.
The publisher of Forbes magazine admitted that monetary policy isn’t the most exciting topic for a speech. In fact, he offered this counsel: “If any of you are ever at a party or on a date that isn’t going well, just start talking about monetary policy. I promise you, you’ll quickly be alone. Everyone will vanish. Monetary policy has got to be the most boring subject in the world.”
Still, there were some things that we need to know.
“If cheap money were the way to wealth,” he told us, “Zimbabwe and Argentina would own the world.”
And he added, “That’s why this whole idea of a stimulus package is garbage. Where did they get the money from? It doesn’t come from Mars; it comes from thee and me. It comes from taxes. It comes from borrowing. It comes from the printing presses at the Federal Reserve, which is the sneakiest form of taxation of all.”
Steve blasted another argument the statists like to use—the idea that anyone who’s made it in America has a duty to “give back.”
“When you say it that way, it sounds like you took something that didn’t belong to you,” he said. “But you’re the one who earned the wealth in the first place. You’re not giving back, you’re giving.”
Then he took off on the Hollywood caricature of American businessmen.
“You know the ones,” he said. “They take pleasure in seeing pelicans drown in oil. When they walk down the street, babies cry and dogs bark at them.
“But even if you’re all of that, in a true free market you don’t succeed. In a free market, you only succeed if you provide a product or service that somebody else wants and will pay you for. That’s not stealing, it’s providing.”
In his speech and in the book by the same name, Forbes made an unapologetic plea for free enterprise, free markets and free trade. He has become perhaps the most eloquent defender of American capitalism since Ronald Reagan.
“No system has been as effective as capitalism in turning scarcity into abundance,” he pointed out. “Think of computers. Forty years ago, only business and government could afford the old massive mainframes…. Today the Blackberry device in the palm of your hand has more computing power than those old machines.”
And what about one of the most controversial issues of our age—healthcare?
“In any other part of our lives, if people want more of something, it’s seen as an opportunity,” he pointed out. “If people want more software, Silicon Valley and other places will be happy to provide it. If people want more cars, Detroit will be glad to build them. Why is the demand for more healthcare seen as a disaster? Why is the fact we’re living longer seen as a problem?”
The grey-haired publisher then put it on a very personal basis: “As I get older, I kind of like longevity. My heirs might not, but I’m all in favor of it.”
Then he pointed out the obvious: “Ladies and gentlemen, we don’t have real free markets in healthcare. We have pockets of it here and there—which is why we have more medical-device breakthroughs in this country than anyplace else. More pharmaceutical breakthroughs than anywhere else.”
What’s the solution? He offered several: “Let’s allow basic things like nationwide shopping for health insurance, equalizing tax treatment between individuals and businesses, removing barriers to health savings accounts, and tort reform.”
And he concluded with this promise: “Get real free enterprise in health care and we’ll turn a hopeless liability into the most dynamic growth industry the world has ever seen.”
We concluded our conversation with Forbes telling me why he is so optimistic about the future.
“The liberty movement is coming up with new, creative, workable, free-market solutions to issues,” he said.
He pointed to the lady who preceded him on the stage—Sharron Angle, who is running against Harry Reid for the Senate seat in Nevada—and other politicians who are making a difference. One is in his own state of New Jersey, where Gov. Chris Christie has put a cap on property taxes and cut the top income-tax rate there by 20 percent.
“We have a rebellion going on,” Steve said happily.
The only time he played coy was when I asked him if he would be running for office again. “I want to be the new Tom Paine,” he replied. “I want to be an agitator for freedom and free enterprise.”
From what I’ve seen, he’s doing a good job at it. But find out for yourself; go to your local bookstore, or visit www.Amazon.com, and get a copy of How Capitalism Will Save Us. And then do your part to spread the word.
Until next time, keep some powder dry.
—Chip Wood
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