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21 May 2024

Forbes in White House 'slug-fest'

By The Daily Telegraph



Steve Forbes is hoping to make fresh waves in 2008. After losing bids for the Republican nomination in 1996 to Bob Dole and in 2000 to George W Bush, 2008 may be the year he gets to fight a presidential election campaign against a Clinton.

Forbes is co-chairing the Republican presidential nomination campaign for former New York mayor Rudy Giuliani. He is confident his charge will secure a run for the White House and has no doubt about who he would face in the final battle.

“It will be Rudy versus Hillary,” he says like a battle-hardened veteran. “It will be a tough brawl, a slug-fest, but the Clintons are known for their brass knuckles.”

Forbes – president, chief executive and editor-in-chief of his eponymous magazine empire – can be punchy too. In his election campaigns, he advocated a 17 per cent flat tax, a new social security system for working Americans and a strong national defence.

In his book The Flat Tax Revolution, he says such a tax will boost the US economy by seven per cent to 10 per cent, adding between $800 billion (Dh2,937bn) and $1,200bn in extra economic activity within “just a few years”. Somehow, it would mean a tax cut for every American too.

With populist proposals like these, Forbes is happiest on the hustings. But now his efforts are for someone else. “Sometimes you get more done pushing on the outside,” he concedes. “I like Giuliani’s ability to get things done. As New York mayor, he cut taxes 23 times, the homicide rate fell by 70 per cent and he reformed the welfare system. And he would be very tough on national security. If you’re a terrorist, oh, oh, look out.”

But what about all those sub-prime US lenders and their increasingly repossessed borrowers? Isn’t this going to be a major election issue? “Sub-prime is a major worry,” Forbes admits. “It’s not the size of the potentially bad mortgages per se – the stock market will work that out. The issue has been finding out the truth about where the bad stuff is.

“People in the markets got jittery and the problem then has been one of overreaction by the regulators, which makes banks fearful and less likely to make money available to otherwise solvent businesses.

“I don’t think there will be a US recession or a global recession but there will be a slowdown and it will not be as a result of consumers not being able to borrow on their houses. Incomes have gone up; jobs are still being created. The problem is that lenders are not lending to small and medium-sized businesses, which will make it more difficult for them to buy inventory and will slow the economy down.”

Will this dent the fortune of Forbes’ own fortune? He looks dismissive. “Most of my money is in Forbes,” he says. “Some is in the stock market but it isn’t going to make or break me.”

Steve Forbes is the third generation of his family to run the Forbes publishing business started by his grandfather in 1917 – he takes particular pride in his family having set a capitalist benchmark in the years of the socialist revolution.

In recent years, Forbes has become best known for its annual rich lists. One brought the company into conflict with Fidel Castro in 2006 when it upped the estimated net worth of the Cuban leader from $550m to $900m. Castro famously responded that he has a net worth of less than $1 and stated that Forbes should put a bucket over his head.

Others have not always liked their wealth being chronicled either. “We get people like Donald Trump, who always thinks we have undervalued him,” says Forbes. “But we were the first to reveal just how wealthy [Wal-Mart founder] Sam Walton had become. No one had a clue quite how much money he had made from Wal-Mart,” he says.

Probably the most amusing anecdote is about what happened several years ago when someone called in a state of high dudgeon. “He didn’t dispute our estimate, but he was going through a divorce and he didn’t want his wife to know how much he had.” What happened? “Well, he’s not on the list any more,” laughs Forbes. “His wife took care of that.”

The king of the rich lists is coy about his own wealth, however. “I’m not on the list,” he says. “The bar keeps getting too high. This year there were more than 60 billionaires in the US who didn’t make the cut. Some 25 years ago, the cut was $125m. Now it’s well more than $1bn.”

Why would not he come clean on his own worth? “I say to people: ‘You can do to us what we do to you’,” he replies.

However, Forbes is privately owned, so such information is hard to come by. In 2004 the Forbes family raised eyebrows by selling the world’s second-largest collection of Faberge eggs to Russian oil and gas industrialist Victor Vekselberg for $90m.

And in 2006, Elevation Partners, the private equity group of which rock star Bono is a managing director, paid an undisclosed amount for a stake in the company. How much did they pay? Forbes would not say but insists the magazine is profitable and it does seem to be doing better globally since closing Forbes Global, its international edition, a few years ago.

Forbes now licences its brand to publishers who take some Forbes content, add their own material and publish monthly local-language editions in China, Japan, Korea, Russia, Poland, Israel, Dubai and Turkey.

In China, it has a circulation of 125,000, while Forbes’ English-language Pan-Asian edition sells 80,000 per issue. The core North American sells 900,000, just behind Business Week. The United Kingdom has not been such fertile ground, with a circulation of less than 2,000, but the Forbes.com website claims 2.5 million unique visits per month in Europe, including 500,000 in the UK.

Will he ever launch a British edition? Not in the short term, says Forbes, arguing that the UK newspaper market is too crowded.
Neither will he have to fund another personal presidential bid, after selling $65m of shares in Forbes to raise campaign funds for the previous attempts.

“I called it an investment; my peers had other words for it,” he laughs. “They saw it as an investment in bumper stickers and brochures.” (The Daily Telegraph)


Name: Steve Forbes
Position: Chairman, Chief Executive and Editor-in-Chief of Forbes
Age: 60

Family: Married to Sabina Beekman, with five daughters

Lives: Far Hills, New Jersey, 72.4km from New York