Malcolm Stevenson Forbes Jr., better known as just plain Steve, knows a thing or two about the cruel whimsy of presidential politics.
As a novice Republican candidate in 1996, he pushed his plan for a one-size-fits-all 17 percent flat tax as an elegant way of simplifying the federal income-tax code (and, not coincidentally, benefiting the rich). He spent about $70 million of his own money to win two primaries—Arizona and Delaware—before dropping out and endorsing Bob Dole.
In the nomination race four years later, the business-magazine scion—the stylistic if not temperamental opposite of his audacious and flamboyant father—spent another $49 million of the family fortune to promote the same central idea. This time he achieved significantly less success.
“I saw it as a great investment,” Forbes tells me when I ask if he got his money’s worth. “My heirs might have taken a different view when they saw their inheritance go for brochures and bumper stickers—which is why I’m now an agitator, not a candidate.”
Now the 64-year-old Forbes—who acknowledges that he’s ranked among the nation’s top 10 Republican donors only because “most of that went to my campaigns”—is agitating for Texas Gov. Rick Perry as the best man to carry the flat-tax flag.
Surprising many, Forbes formally endorsed the swaggering Texan this past weekend “because he’s had a good record as governor and 10 years of experience, so he’s not going to be coming in as a total rookie,” he tells me. “He was good on taxes and spending in Texas; he was very good on tort reform. Texas has been a cesspool for injury lawyers, and he made major changes—and the proof of it was they all moved to Oklahoma. And obviously I like his ideas on a flat tax. I think he genuinely wants to get the thing done. So it seems to be a good combination.”
On Tuesday, in the early-primary state of South Carolina, Perry held a press conference to announce his grand scheme for a 20 percent flat tax—a policy prescription to which Forbes, at the Perry campaign’s request, contributed his two cents and then some—and Forbes pronounced himself well pleased.
“He seemed to do quite well—he was very forceful,” Forbes tells me. “So I think he’s coming into his own.” He adds: “The way you get traction in a campaign is by having your own agenda. Perry gave a speech the other day on energy which was pretty good. And Tuesday was a huge one, and I think it will give him real traction. People are in the mood for big ideas.”
Never mind that the governor seems, to the world at large, a badly damaged candidate who has dropped like a rock from frontrunner to also-ran—mostly due to self-inflicted wounds such as his ineffectual and inarticulate debate performances, his callous cluelessness in handling a racially explosive epithet that was used to name the Perry family hunting camp, and his inexplicable penchant for flirting with birtherism. Forbes counts himself a lucky investor on the ground floor of something big.
But isn’t the governor, at best, an imperfect vessel for Forbes’s ideas?
“No,” Forbes insists. “In terms of how do you handle questions out of the blue, that’s something you learn. In the real world you learn it quickly. You have to remember, he’s only been doing this for a few weeks. He started late. Originally, he didn’t intend to run. And so he’s learning. His last debate performance, I thought, was better than the other ones. So he’s climbing that learning curve.”
Doesn’t it bother Forbes at all that in 1988, Perry, then a Democrat, was presidential candidate Al Gore’s Texas state campaign chairman?
“It just demonstrates that unlike Al Gore, Rick Perry’s capable of growth,” Forbes parries.
Couldn’t the same be said for Mitt Romney, the off-and-on frontrunner, whom Perry has been attacking relentlessly as a congenital flip-flopper?
“Well, Mitt Romney,” Forbes muses. “Even today he’s got a 59-point plan which just nibbles around the edges. Fifty-nine points! My goodness, God only had 10!”
The Perry camp has made clear that it will spend millions of dollars to trash Romney in television commercials, so I ask Forbes if he’s concerned that such a strategy could irreparably damage the eventual Republican nominee.
“Since I think Perry will be the nominee, he’s not going to damage himself,” Forbes retorts. “Whatever part of the Republican establishment has gone to Romney is almost by default—not because they really like him or because they’re writing big checks or bundling large amounts of money. So if Perry or somebody else comes along and catches fire, which I think Perry will, Romney is going to be stuck at his 23 percent or maybe even less.”
Dismissing the significance of Perry’s paltry 6 percent—behind even Newt Gingrich in recent surveys—Forbes sounds a cautionary note (some would call it spin) about the volatility of public-opinion polls.
“The thing to keep in mind about the polls is how fluid they are,” he says. “The only one who isn’t fluid in the polls is Mitt Romney, who’s around 23 to 25 percent, and he’s got a glass ceiling and he can’t break through. The other 75 to 80 percent is open, and I think Perry will be able to move in. One reason Herman Cain surged was his tax-simplification plan, and Perry does not have a sales tax—which I think is a huge plus.”
Still, could Forbes even live with Romney as the GOP standard-bearer?
“Unlike Al Gore, Rick Perry’s capable of growth,” says Steve Forbes.
“Oh, sure,” says Forbes, who has known the former Massachusetts governor—the unwitting architect of Obamacare and a former supporter of abortion choice and gay rights—since his days in the leveraged-buyout business. “He’s a very capable individual. I just think Perry and others have much better ideas and bolder ideas. I don’t think Romney’s conservative enough. I mean, he still trashes the flat tax.”
Forbes says he plans to offer more advice to Perry as the campaign wears on. In the meantime, he continues as chairman of Forbes Media, though he gave up chief-executive responsibilities last year. Elevation Partners, the private-equity firm that paid a whopping $237 million for a 45 percent share in Forbes in 2006 and then watched its investment go south in the economic downturn, has been asserting greater control. Among Elevation’s long-suffering investors is U2 frontman Bono.
“I don’t get to see Bono very often, but I have touched him and got his autograph,” Forbes quips. He clearly got more than Bono’s autograph.
Forbes the man is doing well, but, like most media companies, Forbes the business has been tightening its belt. In recent years the company sold off the most visible parts of Malcolm Sr.’s patrimony—the headquarters building in Manhattan’s Greenwich Village, the legendary collection of Fabergé eggs—and last summer it put the Highlander, Malcolm’s beloved yacht, up for sale.
The asking price is around $11 million.
“It’s not sold,” Forbes tells me. “You can still buy it. And we’ll give you a 2 percent discount for cash.”