Sunday, September 9, 2012

The Robert Wenzel Show with Steve Forbes on Free Markets, Iran, the Gold Standard

This Week's Guest is Steve Forbes

Steve Forbes

This Steve Forbes interview was the most challenging interview I have done, yet. His new book, co-authored with Elizabeth Ames, Freedom Manifesto: Why Free Markets Are Moral and Big Government Isn't  is an excellent introductory text for those who think free markets are bad. The one qualm  I had with the book was his quoting approvingly of John Maynard Keynes on "animal spirits" and his stating that the key to free markets was "animal spirits". I addressed this at the start of the interview and brought up the notion of entrepreneurship, particularly as seen by Israel Kirzner. ( I have posted a discussion of Kirzner's view on entrepreneurship here.)

Following the discussion on Kirzner versus Keynes, we discuss many topics in the book, and as you will note they are very pro-free market and anti-government. But then we moved on to topics that are not in the book, such as the Federal Reserve, the gold standard, the Taliban and Iran. I was stunned by the about face move toward strong pro-government views on these topics. And, whereas, in the past I have stopped such guests as Gary Johnson and Neil Barofsky cold with simple questions that were difficult to answer without clear outright contradictions. Forbes seemed to have little problem blowing through these questions. When I asked him, for example, why he thought there haven't been any terrorist attacks in the U.S. since 9-11, I was hoping to put a contradiction into his pro-war to fight terrorist stance, but he simply plowed through the question by stating that we have caught many terrorists before they could attack. 

After that whopper, I simply tried to get his views on the record in the short time that we had left. In that time, you will then hear his remarkable views on Iran and its relation to Israel.  

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  1. I don't think he even understood the concept of the government creating a bubble which inevitably leads to a recession. He thinks it is just "government interference" in general, as if it is only the sins of today, not the sins of yesterday, that count.

  2. I really appreciated your distinction between alertness and risk-taking as entrepreneurial skills.

  3. Steve Forbes loves Alexander Hamilton. He is a statist dressed in free market clothes. No surprise that he wants no part of abolishing the Fed. You pressed him well on deflation fallacies Bob...but I wished you'd been even more pointed. It would have been fun to hear him stumble along to explain in detail the calamity of a vigorous growing economy "not having enough money".

  4. It is interesting that Forbes thinks gold is priced in USD rather than reflecting the "value" of the USD. In fact, every fiat currency has been declining with respect to gold for several years. The more rigorous the central banks get on creating new money, the higher the price of gold will go.

  5. Wenzel, this is one of your best interviews. I think you're improving.

    You drew out his viewpoints well and maintained a good dialogue despite your differing viewpoints.

    Let me ask a general question to anyone who "knows":

    If the Fed varied the money supply in an attempt to keep the price of gold stable(Forbes "want"), what would happen if there was a strong demand for gold outside the U.S., affecting the price in US dollars? For example, at the rate China, India, and Russia are buying gold would that not naturally increase demand for gold in general, including the U.S. and raise the price of gold in dollars causing the Fed to have to shrink the money supply?

    How can Forbes argue this represents localized price stability(our nation's economy in this case) when it's subject to the economy's and policy's of the entire world in terms of gold demand? The demand for gold may not reflect the state of our economy in terms of growth either way(his argument) on that basis.

    I don't understand how he can claim this is a "market decided" expansion/contraction via this method when a truly free market approach to money let's people decide what to use and what its value is? If you are stuck using dollars that routinely change in value there is no price stability, no? Even further, the "markets" already decided that the unit of transaction is not accurate...and the central planner are trying to reflect that "after the fact".

    It's an after the fact reaction to a change in demand.

    Why on god's earth would you chase corrections all day long to mirror what is a 5000+ year proven price stable unit of currency?

    Oh, I know why....cause you want the monopoly power of money and the ability to print it under "emergency" conditions.