Steve Forbes after 9/11: "The Fed should keep this money hose on"

The Federal Reserve has admirably pumped significant liquidity into the economy, thereby easing the increasingly deadly deflation that we've been undergoing for at least three years.  But the benefits of this, other than avoiding immediate panic, won't be fully felt until the Fed publicly announces that this reliquidity is permanent, not temporary.  The dollar gold price, the most sensitive measure of monetary stability or instability, has moved from roughly $270 to $290 an ounce.  The Fed should keep this money hose on until the yellow metal reaches $300 to $325 an ounce.  Don't stop now, Alan.  You're almost there.

~ Steve Forbes, "Not There Yet," Forbes, October 15, 2001

Steve Forbes on the role of profit (and the contrasting views of Adam Smith and Joseph Schumpeter)

Smith, Marx and Keynes all believed in various ways in what you might call an equilibrium, that the economy is a steady state and you get disruptions from time to time, whether wars, earthquakes or new inventions.  You get some turmoil and then things settle down and you have an equilibrium, which is why even John Stuart Mill became a socialist (not because of the influence of his young wife).  He couldn’t understand the role of profit. 

Even Adam Smith did not understand the role of profit.  If you have an economy where you are striving for a perfectly competition equilibrium, there is no role for profit, other than as a bribe for entrepreneurs to do things.  Schumpeter was an infidel, in the words of Peter Drucker.  That is, he saw profit as a cost of doing business, as a moral force.  Why?  Because in his mind the economy is always dynamic.  A free market is dynamic, always changing, what he called creative destruction.  You focus on the creative side.  But it’s also destroying, which means it’s destroying capital and you have to replace that destroyed capital with new capital. 

Also, how does an economy advance?  It advances with new knowledge.  Where does knowledge come from?  Through constant experimentation by entrepreneurs in the marketplace.  Look at Silicon Valley.  Look at Peter Thiel.  He says eight out of ten ventures, even with great brains like his, will fail.  Only two out of ten, maybe one out of ten, will really be successful. 

So, profit is essential if you’re going to have a growing economy.

~ Steve Forbes, "Full Remarks by Steve Forbes On the Presentation of a Triple Crown in Economics to Mark Skousen," July 19, 2018

Steve Forbes advocates aggressive easing after tech bubble unwind (2001)

With glacial speed, Alan Greenspan is coming around to the view that a faltering economy, not incipient inflation, is the most immediate threat. But instead of moving speedily, the Federal Reserve will soon begin a series of baby-step reductions in interest rates. This sluggish, woolly-mammoth-like response is a danger.

Longer term, though, there is another potential hazard. The Fed could fall into the trap in which the Bank of Japan finds itself: Interest rates are cut and cut and cut, yet the economy doesn’t recover. The U.S. experienced such a phenomenon in the 1930s, when Treasury bill rates were almost 0% and unemployment remained in double digits until the Second World War. Pushing on a shoestring, it was called.

~ Steve Forbes, "Going the Way of Japan?," Forbes, January 22, 2001

Steve Forbes on housing

Thanks to Fed-created inflation, housing prices in most of the U.S. will firm and then rise. This won't save overextended subprime lenders and most come-lately speculators. But it will give much of the industry something of a second--albeit brief--wind.

~ Steve Forbes, "Fact and Comment: Housing," Forbes, June 18, 2007