Capitalist Tool Time

Steve Forbes is running for president and may well win the GOP nomination. But what kind of road is he traveling?


Predictions about the GOP's next nominee deserve about as much faith as sworn statements by President Clinton. In recent months, however, it has become clear that the top tier of contenders will include Steve Forbes. Two years before the presidential primaries of 2000, Forbes has been outpacing his rivals with an impressive schedule of speeches, television appearances, and radio ads.

In one sure sign that Forbes has become a household figure, his name recently came up in an argument for an anti-cloning bill. A Democratic state legislator in New Hampshire said to the Manchester Union-Leader, "Do we want to have 10,000 Steve Forbes running around?"

Forbes's emergence is remarkable. Every president from Washington to Clinton has held either elective office or a high-level appointment such as a generalship. Apart from his stint on the Board for International Broadcasting, Forbes lacks government experience. Still, he does pass one key test: Like all Republican nominees between 1968 and 1996 except for Ford, he has already lost a bid for the White House. GOP primary voters like their candidates bloodied and humbled.

Forbes understands that any potential GOP nominee has to navigate the Republican Bermuda Triangle: the party's fractious coalition of libertarians, social conservatives, and office-holders. That's hard to do, and even at this early stage, his positions on abortion and drugs have alienated some elements of his libertarian base. But Forbes is no simple trimmer. Main Street Republicans fret about his forthright positions on issues such as Social Security and affirmative action, fearing that Democrats will brand him–and the party–as "extremist."

One label that people seldom associate with Steve Forbes is "daredevil." And yet he has indeed been taking riskier positions than George W. Bush, Lamar Alexander, and other top contenders. There are two possible explanations. One is that he's a sheltered political naif who just doesn't understand the trouble he's going to get into. The other is that he's a shrewd political leader who is firm in his beliefs and confident of his ability to change people's minds.

Either way, he's come much further than anyone expected a couple of years ago.

The Special Olympics Smile

Forbes suffered from a late entry into the 1996 nomination campaign. Dole had already cornered the support of the blue-haired ladies who do the grunt work of primaries and caucuses, so Forbes had to compensate by waging an air war. His commercials rapidly pumped up his poll numbers, which collapsed just as quickly when the other candidates counterattacked.

In the early weeks, his stump style ranged from wooden to robotic. New Republic reporter Michael Lewis offered this cruel but telling account of how Forbes reacted to applause: "A few years back there was a television commercial for the Special Olympics that concluded with a retarded boy bursting through the tape at the finish line and breaking into a joyous, heart-tugging smile. Forbes now wears exactly the same expression. He has a Special Olympics smile."

Other observers dismissed him as a rich dabbler–Michael Huffington minus Arianna. But after Dole clinched the nomination, Forbes confounded the skeptics. He didn't skulk away like Huffington, or go into full-metal-wacko mode like Perot. He stayed in the arena, learning from his own missteps, and adapting techniques from political comebacks of the past.

Since the summer of 1996, Forbes has been walking the old Nixon trail, campaigning for GOP candidates and picking up political IOUs. In February of this year, for instance, he went to Richmond and praised Virginia Gov. Jim Gilmore's initiative to repeal the state's hated car tax: "The governor has proved that you can marry power to perspective." In an interview in these pages ("Happy Warrior," February 1997), anti-tax activist Grover Norquist observed: "Forbes is helping people. Sometimes by helping other people you help yourself."

As Reagan did after leaving the California governorship, Forbes has set up his own political committee: Americans for Hope, Growth and Opportunity. Among other things, AHGO sends out blast e-mails and maintains an impressive Web site (www.ahgo.org). Forbes has also started daily radio commentaries, available in RealAudio on the AHGO site. By coincidence, Forbes's radio producer is the man who produced Reagan's broadcasts in the 1970s.

Forbes is improving as a public speaker. At the Southern Republican Leadership Conference held in Biloxi, Mississippi, this February, he delivered many of his lines with simple humor and a natural-sounding inflection. "And so even if you had trouble with math or arithmetic when you were in school, which of course none of you did–See, I'm learning to pander…." The aside got a good laugh, and he responded with a graceful smile, not one of the "Special Olympics" variety.

In May 1997, he gave the commencement address at Claremont McKenna College, in Claremont, California. He concluded with words that warmed the hearts of professors weary of student grammar: "Just remember, it's not who you know; it's whom you know." Then he did a couple of things that previous commencement speakers had not done. During the distribution of diplomas, he stood up and shook hands with every graduate: a small touch, but a pleasant, unexpected one. After the ceremony, he stayed around for more than an hour to pose for snapshots and chat with anybody who wanted to talk with him. (He gained from comparison with the previous year's speaker, the imperious Vernon Jordan. After giving a harshly partisan speech praising racial preferences and hinting that Republicans were bigots, Jordan did not deign to mingle with the proles. Maybe he was eager to return to his job-referral service.)

Though he is getting better on stage, Forbes still has work to do. Too often, even when he is speaking off the cuff, he sounds as if he is reading a text for the first time. For one thing, he keeps committing the beginner's mistake of pronouncing the indefinite article a with a long-a sound ("ay"). At a New Hampshire town hall meeting, he said: "The IRS abuses…are ay symptom of ay corruptingly complex code."

During the same New Hampshire trip, Forbes toured downtown Nashua, with C-SPAN cameras rolling. At a shoe store, he awkwardly greeted clerks and customers, who seemed more interested in the merchandise. He stopped for a few moments with an 11-year-old girl, saying, "I hope you have a good shopping experience here." She thanked him and walked away. Throughout the visit, he seemed uneasy about getting in the way of market transactions–which, in a way, is a good sign.

The Thinking Man as Candidate

In May 1991, long before Forbes even thought of seeking office, REASON asked him to describe his political philosophy. "I'm pro-growth," he answered. "If that means enterprise zones, I'm supportive, and if it means increasing the earned income tax credit as a way of enabling people to get off the welfare treadmill, I would be for it. That's really the guiding compass: How do you let people develop their talents with a minimum of interference?"

When it comes to broad free-market principles, Forbes "gets it." At the Claremont McKenna commencement, he said: "In times past, we thought of wealth, as land, armies, piles of gold and jewels, and, sadly, slaves. This new era has made clear what has always been true–that the true source of wealth is the human mind, human imagination, inventiveness, stick-to-it-iveness."

Earlier this year, he wrote an obituary for Julian Simon, the economist who debunked dire forecasts about population and pollution. "In an environment of freedom, more people mean more knowledge and, thus, more breakthroughs and inventions. In no small part due to Simon's work, the Chicken Littles were routed." Perhaps looking ahead to a race against Al Gore, Forbes added a caveat: "But Malthusians never stay down. They are at work today propagating a new menace to frighten us–global warming."

Both Gore and Forbes spoke at the Microsoft CEO summit in May 1997, and their remarks highlighted their philosophical differences. Gore compared free-market types to the heartless Tin Man of The Wizard of Oz. Today's Tin Men, he said, "have a cold, calculating bead on the facts and figures and theories that measure the rise and fall of markets," and their economic policy "is simply to slash taxes and get the government entirely out of the way." Their approach failed during the Reagan years, Gore argued, and it cannot work in a high-tech age: "The Tin Men offer no prescription for upgrading the skills of workers or for sparking innovation."

Forbes offered a different vision, calling the tax code "a real dead weight on the economic life in America." Whereas Gore proposed a federal plan to wire classrooms to the Internet, Forbes reached deeper: "Technology won't make a fundamental difference in education as long as the old monopoly is running it." He backed a variety of reforms, including school choice, to "blast those systems open."

Within the party, Forbes is scarcely alone in endorsing such policies. His rhetoric, however, suggests a more sophisticated understanding of government power. When other Republican leaders mention the Cold War, they usually limit their discussion to President Reagan's successful fight to bring down the Soviet Union. That part is true enough, but Forbes stands apart from the others in noticing that the struggle also had a dark side. In a speech at the Cato Institute last year, Forbes said that the Cold War had harmful effects on social and political life. National security, he said, gave the federal government a rationale for enlarging its power over education, research, transportation, and many other fields. By the early 1960s, people concluded that if the government could win two world wars and contain communism, it would do other good things, too. "And thus we got the War on Poverty, Jimmy Carter's moral equivalent of war on the energy crisis, and the war on drugs. War, real or metaphorical, has been the motif of this century." (We'll shortly return to his stand on the drug war.)

Forbes has repeatedly stressed the moral dimensions of his economic beliefs. You don't succeed in business through coercion or deceit, he said in his Claremont McKenna address, "You succeed in business by providing a product and service that people are willing to buy voluntarily from you." He has also discussed the need for honesty and integrity at the highest levels of politics. Many libertarians have praised this line of argument. As Edward Crane, president of the Cato Institute, has written: "I applaud Forbes's decision to include a call for moral leadership along with his libertarian policy proposals, ranging from the flat tax to school choice to Social Security privatization."

Life, liberty, and the pursuit of happiness, Forbes told the Heritage Foundation, are the "moral basis of a free society." Government's role is to secure those rights–in the order that the Declaration lists them. "Switch the order–putting happiness before liberty, or liberty before life–and you end up with moral squalor." From this belief, Forbes has derived some positions that have pleased social conservatives while disturbing many of his libertarian allies.

Abortion and Drugs

Speaking to the Christian Coalition last September, Forbes got a rousing reaction when he said of America's national creed: "Remember, life begins at conception and ends at natural death." Many news reports quoted that line, but by itself, it carried less significance than reporters thought. They forgot that Forbes had used similar language in the 1996 campaign: "I believe that we should protect life from conception to natural death."

Pleasantly surprised social conservatives speak of Forbes's "conversion experience" while pro-choice Republicans complain about a sell-out to the religious right. In fact, he's been more consistent than either side thinks. On February 10, 1996, he said on CNN's Evans and Novak program: "I think that we have to bring public opinion along each step. I think we can start with a consensus by banning abortions in late pregnancy–barring a life-threatening emergency–barring abortion for purposes of sex selection, no mandatory government funding, parental consent in the case of minors." Robert Novak asked him if he would support a constitutional ban on abortion, provided that public opinion came along. "I wouldn't oppose it, if you have the culture with you," Forbes said.

That's largely his position today, but he has made some adjustments that have major political consequences. When the constitutional issue resurfaced during an Evans and Novak interview earlier this year, Forbes's answer suggested a crucial shift in tone: "I believe in life. I want that constitutional amendment."

Whereas he once downplayed abortion, he now emphasizes the issue. Earlier this year, he even supported a Republican National Committee "litmus test" on partial-birth abortion, which would have denied party funding to candidates who didn't oppose the procedure. (Many anti-abortion Republicans, most prominently Rep. Henry Hyde, opposed the test for dividing the party.) "We should not fund a Republican candidate who opposes partial-birth abortion bans unless there are special circumstances, as determined by a majority of the 165-member RNC," Forbes told The Washington Times. He added that there "may be circumstances, such as support for Rudolph Giuliani in New York, where you might want to make an exception."

Forbes's comments illustrate the risks of finessing the issue. Former Republican national chairman Richard Bond wrote: "Forbes has alienated activists on both sides of the abortion issue; encouraged Republicans to engage in an internal fight at a time when President Clinton and the Democrats are on uncertain footing; further driven away women and other potential supporters from the party; and encouraged further attempts for litmus tests to be foisted on Republicans by those who believe in single-issue candidacies."

On another social issue, Forbes has campaigned hard against medical marijuana. "What's going on?" asks Clifford Thies, chairman of the Republican Liberty Caucus. In an open letter to Forbes, available on the group's Web site (www.rlc.org), he continues: "Has he become so fixated on becoming president that he has adopted Bob Dole's failed strategy of trying to beat Clinton on the drug issue?" Libertarian writer Doug Bandow is even harsher: "Treating the sick and dying as the enemy is a particularly cheap way to win votes."

Forbes's supporters argue that his support for tough drug laws, like his abortion stand, is less a new position than a new emphasis on a longstanding and sincere belief. On July 1, 1996, he wrote in his magazine that "the beguiling notion that decriminalization of the use of `mild' narcotics such as marijuana would allow authorities to crack down more effectively on hard drugs still persists (even in a recent Forbes story about the Netherlands). Alas, the idea is destructive nonsense."

Thies, however, argues that it's possible, indeed necessary, to have a separate discussion of medical marijuana: "As Republicans, we understand the importance of what we communicate to others, especially to youth. But it is immoral to hold sick people hostage so we don't miscommunicate our concern for drug abuse."

Some libertarians share Forbes's opposition to abortion. (Murray Sabrin, the Libertarian Party candidate for governor of New Jersey last year, attacked Republican incumbent Christine Whitman for her support of partial-birth abortion.) Some may even favor curbs on certain drugs. Inevitably, though, his high-profile stands on these issues will create friction between Forbes and the libertarian movement. If he is to hold onto at least a share of libertarian support, he has to take bold, pro-liberty stands on other issues. And he does.

Steve, the Vampire Slayer

Forbes has imported his favorite applause line from Transylvania: "Rather than further complicating a failed federal tax code, we should abolish it–kill it, drive a stake through its heart, bury it, and hope it never rises again to terrorize the American people." He urges Congress to take a "bold and radical step" by passing legislation to scrap the tax code by a date certain, a move that he hopes will trigger debate about "a new tax code for a new century."

Forbes thinks that the best alternative is a straightforward flat tax. His proposal features a 17 percent rate on wages and salary, with simple exemptions: $13,000 for singles, $26,000 for married couples filing jointly, and $17,000 for single heads of household. Taxpayers could also deduct $5,000 per child. He would not tax personal savings, pensions, Social Security benefits, capital gains, or inheritances. (Businesses would pay the 17 percent rate on net profits, and could write off investments in the first year.)

The flat-tax idea is compelling. For decades, Washington has used the tax code as an instrument of social and economic engineering. By getting rid of tax preferences, a flat tax would free individuals and businesses from a pervasive form of government power. With the elimination of most deductions and credits, taxpayers would no longer have to supply Uncle Sam with excruciatingly private information. Compliance costs would plunge, since people would no longer have to spend disproportionate sums on record-keeping and accountancy. And what's more, many people would see their taxes go down. Currently, an average family of four owes about $3,000 in taxes for the first $36,000 in income. Under the Forbes plan, they would owe nothing up to the $36,000 level; after that, they would pay 17 cents on the dollar.

The proposal might seem an automatic winner, especially since abusive IRS activity has received massive publicity, and the total tax burden has reached unprecedented levels. There's a catch, however: To slay the vampire, you also have to kill a sacred cow. On NBC's Meet the Press, Tim Russert asked Forbes if he would allow a deduction for mortgage payments. Forbes answered: "I think in order to make change…you have to go with a strong and pure proposal, or else the essence of it will not survive the political process."

Nearly 30 million households take the home-mortgage deduction. Even though many of them would do better under the Forbes plan, they balk at giving up an existing benefit. When the 1986 tax bill ended a number of tax breaks, Americans suspected that Washington would eventually renege on the promised payoff: reduction of the top rate to 28 percent. Guess what: They were right. People don't like Democratic tax increases, which is partially why Republicans took Congress in 1994. But courtesy of the Bush-Darman tax betrayal of 1990, they don't trust Republican pledges about tax cuts.

Even Republican primary voters are skeptical, especially when it comes to proposals that would touch the mortgage deduction. Dole effectively used the issue against Forbes in New Hampshire. In the general election campaign, Dole got his comeuppance when nobody believed his proposal for a 15 percent reduction in income tax rates.

Dan Quayle, among others, has hedged by calling for a "modified" flat tax that would retain the mortgage deduction. That one key word, of course, represents the difference between radical reform and another round of incremental change. The contrast shows that Forbes's stand is gutsier than it may first appear. He's betting that he can lead public opinion and overcome the attacks that will surely come both from Democrats and his GOP rivals.

A Nerd's Cojones

Forbes's risk-taking doesn't end with the flat tax. He has broken with congressional Republicans whose answer to the impending crisis of Social Security is the time-tested dodge of appointing a blue-ribbon panel. In January, he told the National Press Club that we do not need another commission: "We need action. We need real proposals on the table." Forbes's proposal is to phase in a new Social Security system for younger people, in which most of their payroll taxes would go to their own retirement accounts. In his magazine, he explained: "As things now stand, without major payroll tax boosts the actual return for our under-age-30 citizens will be decidedly negative. A new system would both avoid new levies and give participants vastly more than we are getting now."

Such a commonsensical position shouldn't require courage, but it does. Even though many Democrats have acknowledged the system's flaws, Republicans always invite trouble when they discuss programs for the elderly. In 1986, Senate Republicans lost their majority in part because they supported a modest adjustment in benefit increases. A couple of years ago, Democrats drew blood with their "Mediscare" campaign. In both cases, the GOP sustained damage even though it retreated–or perhaps because it retreated. In light of widespread public support for reform, Forbes believes that a strong, firm position will prevail in the end.

Forbes also differs from Hill Republicans on affirmative action. Increasingly paranoid about charges of "racism," the congressional GOP has been caving in to the regime of racial preferences. House Republicans could not get an anti-preference bill out of committee. While passing the shameful highway bill, Senate Republicans failed to repeal the even-more-shameful program that sets aside up to 10 percent of federal highway construction contracts to minority and female-owned businesses. Forbes, however, has been speaking out against state-sponsored discrimination. His group sponsored an ad campaign to support the Washington State Civil Rights Initiative. Forbes said that the measure would "reassert the moral principle that all Americans have been created equal in the eyes of the law, regardless of race or gender or national origin."

Forbes has criticized GOP congressional leaders for yielding too much ground to the White House on budget issues, and they've hinted at retribution. On CNN's Evans and Novak, Senate Majority Leader Lott recently said: "I've got this to say to some of the people that are using that as a method to get the nomination: They'd better be real careful. They may be surprised whose help they might need….I don't appreciate it, and I'm not going to put up with it, I'll tell you that."

And on one important issue–immigration–Forbes has risked the antagonism of GOP grassroots activists, who see immigrants as burdens instead of assets. Forbes strongly supports legal immigration, because of his belief that human beings are the ultimate resource. He editorialized against California's Proposition 187 (which would have denied government benefits, including public schooling, to illegal aliens), and opposed a national version of the measure during his 1996 presidential campaign. He also came out against a constitutional ban on citizenship for children of illegal immigrants–a position that had enough GOP support to earn a place in the party platform. A leader of a California anti-immigration group told the Los Angeles Times that Forbes deserved special condemnation: "Steve Forbes basically says immigration makes Americans work harder. Here's a guy who inherited all of his money, never had to work for a dollar, and is telling us we have to compete against 4 billion people. Outrageous." (Although he inherited much of his wealth, of course, Forbes is in fact a CEO whose fortunes are tied closely to how well he runs the family publishing business.)

Whether out of courage or naiveté, Forbes is saying what he thinks. It's an unusual way to prepare for a presidential race.

The GOP Field

At the moment, that race appears open. Forbes won the presidential straw poll at the Conservative Political Action Conference in late January. He was the first choice of 23 percent of the attendees, compared with 10 percent for Texas Gov. George W. Bush. At the Southern Republican Leadership Conference a few weeks later, Bush led with 18 percent. Forbes placed second with 15 percent, followed by Dan Quayle with 12 percent.

These unscientific results, together with soundings of GOP activists, indicate that Bush is Forbes's strongest competitor. The funny thing, though, is that few Republicans outside Texas can identify anything he has done as governor. Just as Zsa Zsa Gabor was famous for being famous, Bush is popular for being popular. Name identification, of course, has much to do with it, and even that is a mixed blessing. Because of his 1990 budget deal and his humiliating loss to Bill Clinton, the elder Bush has become the "yada yada" chapter of GOP history: "Reagan cut taxes and won the Cold War, then yada, yada, yada, Clinton came along."

At the Southern Republican Leadership Conference, Dan Quayle praised Reagan extravagantly, but only once did he mention the man who chose him as vice president–and then only as Saddam Hussein's assassination target. The rest of Quayle's remarks were in character, which is to say that they ranged from trite to embarrassing. At one point, he described "the centerpiece of our anti-crime plan: Three interns and you're out!" He held up three fingers, perhaps trying to prove that he could count.

On his geekiest day, Forbes does better than that.

And if Forbes sometimes has a "robotic" speaking style, Lamar Alexander must really be a robot. His total lack of originality or spontaneity suggests an artificial life form that someone assembled from pieces of old politicians, according to a focus-grouped blueprint. Consider the tag line of his Web site (www. lamaralexander.com): "For the new century, America needs not so much a new kind of government–not a Squarer Deal or a Fairer Deal or a Greater Society–but a New Spirit…." This depth of banality is far beyond the reach of any natural-born human.

Libertarians would be hard put to identify a potential GOP candidate (or, for that matter, a Democrat) whose positions are more acceptable than those of Forbes. Like other GOP proto-candidates, Bush, Quayle, and Alexander all oppose drug legalization and support abortion restrictions in varying degrees. Forbes outshines them on other issues, especially in his forthright stance on the flat tax. Compare his position with what Alexander said in 1996: "Taxes need simplifying and some of them need lowering."

Forbes is far from a perfect candidate. In his public style, he will never match the Great Communicator. In his issue positions, he will never completely please all the wings of the Republican Party. But the perfect candidate does not exist. Among the likely contenders, who else is there?

Contributing Editor John J. Pitney Jr. (jpitney@mckenna.edu) is associate professor of government at Claremont McKenna College. His Web address is faculty.mckenna.edu/jpitney.