Steve Forbes on AI, Stablecoins & Flat Tax Reform — Riding Bulls and Taming Bears

Welcome to Riding Bulls and Taming Bears, where we look past the headlines to uncover the real forces shaping our money, our markets, and our future.

I'm your host David Strzeski, and today's episode is nothing short of iconic.

We're joined by a man who's not only advised presidents and predicted policy shifts, but has shaped the very conversation around capitalism, taxes, and the American renewal.

Steve Forbes is a two-time presidential candidate and the chairman and editor in chief of Forbes Media and a voice of reason in a world of noise.

In this conversation, we'll explore what legacy really means in a digital age, whether fintech is a revolution or just a rerun, and how the next generation of tax reform could reignite the American dream.

We're even going to dive into the big beautiful bill which I like to call the Tax Cuts and Jobs Act 2.0 and get Steve's take on what real pro-growth policy could look like in 2025 and beyond.

So buckle up whether you're a seasoned investor, a hopeful on for a newer, or just someone trying to navigate the new economy with wisdom and faith.

You're in the right place.

Let's ride.

I am just so honored as our debut show that you would be able to be here and take the time and you know, Steve, for those that just don't aren't familiar with the Forbes empire and industry and and how you guys have continued to lead here for decade after decade, can you just share with, with us, you know, a little bit about what's helped you to be and remain relevant just all these years?

Well, Forbes, now Forbes Media, but Forbes magazine was started by my grandfather 108 years ago, 1917.

Not a good time to start in midst of World War I, but he had an idea, and he was going to run with it.

He was an immigrant from Scotland, one of 10 children, grade school education, like millions who came here, dreams and ambitions, and he was a top business reporter for the Hearst Papers, which was then the biggest media empire.

But he instead of writing about entrepreneurs, he wanted to become one himself, so he started Forbes, and in the first issue he said the purpose of business is to produce happiness, not pile up money, and that's been our ethos since then, as we're fans of entrepreneurship, capitalism, but we're like a drama critic.

We like it when the production's done well, but we don't hesitate to criticize when it's not done well, right?

Right.

Oh, that's amazing.

So as we look sort of at the, the, the, the history of where you've been, where things are today, and maybe where, where we might be going here in the future, now we're sitting in a day and age of like digital assets that have come around and now they've gotten into the ETF space here in the last 12 months and just do you have some ideas or thoughts about where the world's headed right now and you know, just kind of with that that that perspective where we've been, where we are, where we're headed.

Well, the thing is, I think Peter Drucker, the late great management guru who wrote a lot of books about management and some are still read today where they still do reading, and he liked to say every organization should ask itself what is your purpose, what is your mission, what is it you're trying to do?

And if you do that, then you get less caught up if the means to achieve that mission changes, and that's what we've tried to keep in mind.

We had the rise of the internet which blasted the old print industry.

And now we have AI coming in at changing things radically again, so we're always focused on the services and analyses that can help people get ahead.

And whether you're starting out or you've think you've arrived, by the way, if you think you've arrived, my father liked to say you're being ready to show him the door because a Success is not permanent.

That's right.

But in terms of the future, if I knew that I wouldn't be here.

I'd be out to starting companies to finally make the Forbes 400 rich list.

But you know that something like AI is going to have a profound impact.

Already you're starting to see it hopefully in.

Improving the time it takes to get a drug approved, which is now 10 to 12 years, $2.6 billion and it'd be nice if you could do it in six months and have it tailored to your own specific body.

Absolutely.

So right now the FDA, if you have a certain new drug and a certain number of people have an adverse Reactions they pull it so 95% where you don't get an adverse reaction, don't get the cure.

So this way we can start fine tuning those things.

So you're going to see more and more of that use.

So as for AI, a friend of mine, Mark Mills, liked to say artificial intelligence should change its name.

To artificial, not artificial, but enlightened innovation and not artificial intelligence, but better intelligence, yeah, because we don't call, as he likes to say, we don't call airplanes artificial birds.

We don't call things like automobiles.

We don't call them artificial horses.

So put aside the nomenclature and just say advanced intelligence.

That's what we want, yeah, and it can be misused like anything else, but it is an exciting future and you see it in all the new occupations that rise up.

A friend of mine, John Tamney pointed out 11 aspect of affluence is you even take traditional industries and find new, new and better uses.

Take food.

Look at all the restaurants, fancy different restaurants you have, all the shows, sous chefs, whoever heard of that 20 years ago, right?

And Danny Meyer, great restaurateur in New York, when he went into the business, his family sort of said this was 40 years ago.

Oh, is this just something you want to do on the side?

It wasn't seen as a real occupation, and today it's a multibillion dollar industry, tens of billions.

So that comes with affluence, not just new stuff, but taking the things that have been around and finding new applications for it and and finite and division of labor, as Adam Smith pointed out.

That's what leads to one, you can better discover your native talents.

Imagine years ago having Michael Jordan try to grow corn because you didn't have much affluence and you had to grow your own food, huge waste of talent.

But as you get a more rich society, then people have the opportunity to find what they're good at and a chance to pursue it.

Exactly, exactly.

I, you know, I just love how you frame. some of those historical points and and bring it all together.

I wonder, Steve, if you could share what are some thoughts that that might concern you or keep you up maybe about whether it's AI, sort of where we are right now, kind of where we're headed here into the future.

AI, the thing we have to watch out for is overregulating it.

We're allowing every state to put on regulations and kill it in its cradle.

We're going to obviously have to have rules of the road, but you learn from that what.

As you need, you can't tell that in advance because you don't even know what it's going to be used for in advance or the new industries are going to rise in advance.

You just take the rise of the automobile, whole new law.

You had to have highway patrols.

You had to have licenses.

You had to have insurance and everything else.

So these things you can only know when they unfold.

So the key thing is don't strangle these things when you don't know what you're doing, right, which politicians should keep in the front of their mind.

I, I, I, one of my favorite jokes about politics is that, you know, you break the word down poly meaning many ticks meaning bloodsucking insects.

It's a, you know, it's sort of a, it's sort of a tricky world out there in the world of politics, you know, speaking of ply the way is why Elon Musk.

I'll give them gratuitous advice.

Yeah, stay away from politics.

Your value added is doing what you're doing and great advances in auto technology, rocketry, and the like.

Absolutely that's where you're going to really better humankind.

And politics, take the word, take the number 100.

Your value added might take 101, whereas what you're doing, you take things to 10,000, 10 million, yeah go go where the wallop is, absolutely, absolutely, and you know it's so amazing to have a, you know, the nation, even a lot of the nation anyway, I think even more so behind him, more so than just Tesla now.

I think that's at least some ideas.

Go out there, they saw some strength, but yeah, he's obviously innovating and that's the place that he's made the briefing is in government.

I think people are rather shocked, for example, that the Treasury Department can send out $7.2 trillion in checks each year, so to speak, not have a real idea where the money's going, right, where all the permutations goes to this and that and that and that and that and no one had ever bothered to.

Delve into it before the way he did.

That's right.

Yeah, I think that that shows some integrity and shows that he was willing to expose some things in a very unpopular way, but that the taxpayer would really want to know.

And so I care about We the People.

That's who we represent on this show.

He paid a price for it.

He did.

He did, and I think that he's going to recover and I think he's going to continue to innovate and you know, Eman, if you're watching two of those Tesla robots coming out next year, put me on the.

On the pre-order for because they looked amazing and I think I can figure out some ideas for him.

Well the thing is he's an innovator, not what you're investing in.

Yeah, that's it.

That's it.

And here we are on on Fintech TV, you know, and so we're talking about the financial technical future which is where a lot of this innovation is, is going, and I wonder if you, you know, might even comment on, on, on fintech and And blockchain crypto.

Any thoughts that you have?

Well, one thing in terms of we like to be positive, but I'm very negative here, and that is we must keep central banks from creating digital currency, absolutely be a gross invasion of privacy.

Imagine everything you spend, even a penny that still exists, would be tracked by the by the government through digital technology, and that has to be prevented.

And I hope we make sure the Federal Reserve and other central banks, and if a country has a digital currency, that's where President Trump should say, not here.

That's right.

Keep them out of the SWIFT system, keep them out of the Federal Reserve payment system, right?

Absolutely.

You know, I love that because You know, when, when we think about the decentralization of money, that was kind of the idea behind blockchain.

It said you have money, I have money, we don't even have to trust each other, but we can buy this cup as an example, and it's all going to work out.

You can't, you know, counterfeit the money.

These are really important ideas as we move forward in this something to keep in mind on the whole crypto thing is right now, especially Bitcoin is not money.

Yeah, you can use it to transfer wealth quickly from here to say Venezuela, not have the government steal it.

And but money has to have a stable value, and you would not want to have your mortgage in Bitcoin, where you say you have a $500,000 mortgage and you find out after five years you owe $5 million or $10 million right?

You, you, or you just don't, they can't do long term contracts.

So I think what's going to eventually arise is stablecoins, so to speak, that are open and transparent.

So if they say they're backed by Treasury, you can actually look to see if the treasury is there.

That's right.

So if it's backed by gold, the gold is there, sir, and eventually they will rival government currencies, and that's where you're going to see a real regulatory fireworks as governments try to protect their monetary monopoly.

That's right.

Yeah, I love that, and I completely agree.

The stablecoin route is actually even really good for the United States because the US is having a harder time selling treasuries and so everyone's going gold, yeah, and also it's good to have a little competition.

Yep, I mean the post office for all their woes, which are Legion, is a much better operation thanks to Amazon.

And that's a great point.

And, and, and, and so I think when you have something they'll turn about there, one of the things that central banks refuse to grab put their minds around is that money is supposed to have a stable value.

You know, when you buy a pound of cheese, you don't have to worry each day.

Is it 14 ounces, 18 ounces, 20 ounces?

It's stable. takes weights and measures make a marketplace work.

It's true of products and services, and it's true of money.

And so as somebody who has bought Bitcoin when it was speculative, I own it now, even now while organizations are allocating to it.

My view of it is that it's an asset.

Think of it like real estate in this case it's just, it's a static hold on a specific place inside of mathematics that can't be duplicated and there's 21 million possible.

But here's the amazing thing, Steve.

There's only about 20 million of the 21 million have already been mined.

And at the rate that they're mined, they're still 106 years ahead and so it eventually is only creating a very small amount and so what we have is what we have, but no one's going and buying groceries with with Bitcoin, to your point. but, but here's how I look at it.

I personally will never sell, but I can get loans against it, and then I can take that tax deductible loan that allows me to use the gain of or the asset that I've got without paying tax on it, according to our tax system today.

Just make sure you don't run into a period which Bitcoin has run into.

Goes down in price.

Sure, the bank calls up and says, David, yes sir, that's exactly right, and it is volatile.

That's right, yes, take your breath away.

It's a, you know, yeah, no, crypto is not for the faint of heart, no question, and it's not for 100% of your portfolio.

Some, some people may just prefer to go to the amusement park and do a roller coaster.

You know, you still get the butterflies either way, don't you?

Yeah.

Well, Steve, is we're just kind of a just transitioning here, we have a new tax bill that's just gone through.

It's called the Big Beautiful bill.

I like to refer to it as Tax Cuts and Jobs Act 2.0 because it's really Tax cuts and Jobs Act with a couple of variations modification of Social Security taxation.

We've got no tax on tips, no tax on overtime.

I appreciate those ideas because I think that a lot of those affect everyday.

Americans who I think you and I have talked about before just really are the ones that are taking the brunt of this inflation challenge here.

Do you have any thoughts on this as somebody who's written a book on taxation, on flat tax, General, what are, what are some thoughts on what we're seeing here today and some ideas that you, well, legislatively getting that monstrous thing through is a huge achievement, as the president say, huge, and genuinely was.

If it hadn't been for him, it wouldn't have gone through.

Speaker Johnson was absolutely essential.

Yep, getting through a fractious caucus, and Senator Thunene, the Majority Leader in the Senate, played his role effectively.

So they got the thing through.

And the key thing is, as you touched on, it kept the 2017 tax cuts in place.

So finally people, business people and investors and everyday people have something that is Not permanent, but at least it's not going to change each week.

That's right.

And the three new tax cuts that you mentioned, but also though I hope that in the future they go even further and go for the president's idea of a 15% corporate rate.

A which they left out of this one, cut the capital gains tax, which is good for investing, and it instantly raises revenue for the government.

Every time you reduce the capital gains tax, revenues go up.

Why?

Because people are less punished when they realize gains.

So every time they've cut it, government easily gets money.

So I hope they get back to that.

And instead of fiddling around trying to make salt states happy, the blue states losing a salt deduction, state and local taxes, they instead reduce tax rates.

Same thing that way you have incentive and does the same thing.

Your tax burden is lower, but you have the incentive and less of a barrier to earning more and keeping more, right?

So I'd like a flat tax where you just throw the whole thing out.

I used to say.

Bury the tax code, but the EPA, I'm sure wouldn't allow that to be done, so toxic now, but it's I think it's going to be done someday.

Why we waste all these immense resources?

Let me just give you a quick number.

Yeah, the IRS estimates we spend at least 6 to 7 billion hours a year filling out tax forms.

And experts calculate that in time and money, the last number I saw was shocking, over $500 billion a year confined with this monstrous code.

My goodness.

Go back 20 years, take that 100+ billion hours while all that brainpower, literally trillions of dollars in time and money spent in this corrupt thing.

Imagine if that had gone for new products, new services, new cures for diseases, medical devices, how much better off we'd be.

What a waste of resources, right?

So I think eventually we'll get to that and have our ingenuity applied to something creative and constructive rise out of this idiot code.

Yeah, I mean, I completely agree, and to be honest, I think that if we look really far out into the future, one of the challenges that AI will present is that I might be able to hire 12 people that can run a company that would have otherwise taken me 400 employees.

So how do you tax that when the revenue's not there in the same way?

They could be working in other nations that jurisdictionally, how do you tax cross border?

And so there's some real conversations that we're going to have to have in the future as this thing gets out of the bag, as AI touches us here in the real world and begins to change our life and blockchain technology, hopefully securitizes it.

A decentralizes it and it stays decentralized because otherwise we're just borrowing the money of the government and we don't really own.

Well, the government, when it borrows what it is doing is not stimulating the economy, but one way or the other removing resources and using it for their own political purposes.

Yeah, and I'll trust people figuring out how best to use those resources than bureaucrats, right?

But it totally, and Milton Friedman put it very well.

This shows how things have gotten even worse than when he made the statement.

He said he'd rather have a $1 trillion federal budget that was grossly in debt, huge deficits, than a $2 trillion budget that was balanced.

Why?

Because you're in one case removing $1 trillion from the economy, the other case you're removing $2 trillion.

Oh wow, yeah, good point.

So, so yes, a balanced fine, but I want a smaller.

I want a government taken less from the we the people.

Yeah, absolutely.

Hey, real quick, Jerome Powell, we got rates that were dropping by 1% at the end of last year, kind of was seen as he's just before the election.

What a coincidence.

What a coincidence exactly, right?

So he's got to stop playing.

Politics with this thing and it's ridiculous that if you look at 3 months, 6 months Treasury Treasury bill, it's over 4%, which hurts lending to small businesses, and the Federal Reserve pays interest on reserves, right?

So the bank parts the money at the Fed, they earn 4.4%, no risk.

That's the rate they should cut, not the federal funds, right, but cut that in fact until.

Ben Bernanke came along and after the crisis of 2008, the Fed never paid interest on reserves.

Well, I was not aware of that, and that's why today the Fed, I mean, the Fed is the only central bank, I think in history where it can print its own money, create its own money, and has an operating loss.

Because they bought all these near zero coupon bonds, right, and they're paying now with this interest thanks to inflation and bank reserves, so they lost last year $73 billion.

They used to turn money over to the Treasury.

Well, $73 billion loss, and no one brings it up.

Yeah, so Jerome Powell and his colleagues at the Fed don't understand inflation.

They employ, I think in Washington alone, the Fed employs 300 PhD economists.

So what's going to happen to the 9 trillion that has to get refied here in the next 12 months?

All these PhD economists?

Well, you see, when they worry about people say, oh, if the deficit does this or does that, you know, we won't finance it.

It's not the number.

The market will tell you when you've overdone it.

That's true.

The market will, so I don't know what the number will be, but the market will let you know we ain't, we ain't eating this stuff anymore, right?

Right.

Hey, that's, that's a good point.

And I don't want them to test what that number is.

Please, never in our lifetime, right?

Hey, just wanted to, uh, hit you with just a couple of quick questions, one word answers, or you can answer them however you want, and that is this.

The Legacy lightning round.

One word short answers.

Steve.

What is your favorite book or books?

Well, the books I've written, of course, of course, is my must reading, including my latest one, Inflation What It Is, Why It's Bad, and what how to fix it.

Yes sir, but one that will sound a little strange and I haven't completed it yet is the Bible.

Abraham Lincoln was very much of a religious skeptic when he's growing up.

But he knew whole passages of the Bible because he said everything you want to know about human nature is there, the good, bad, and the ugly.

It's all there.

Yes sir.

You can learn a lot from it, and that's one of the reasons why in his second inaugural address he quoted Matthew, woe to the world because of offenses, because unless need be the offense has come, but woe to that man from whom the offense came.

He's talking about slavery, yeah, more north and south for being punished for the sin of slavery.

So it's all there and so I still have a lot to learn on that.

But George Gilder's got some great books, great, great, not an economist.

I think he's more than an economist.

He's a futurist, technologist, whatever you want to call him, 85 and still running races.

That's right, he is.

Yeah, amazing.

OK, I'm not running races even.

I'm I'm not going to try to do that.

You got a favorite quote that comes to mind?

Well, since the first issue of Forbes, we've always had a quote from Proverbs, with all thy getting, get understanding.

Amen.

Amen.

I love that, um.

Favorite mentor Father, well said.

This one's a little bit tricky.

Biggest regret, biggest regret was not getting to the big White House, which is why I'm here today instead of my presidential library.

Well, Steve, I'm blessed to hear you're here today.

Thank you, and I'm so thankful for, for your time here this afternoon.

It's just been a real honor.

Thank you for sharing your wisdom and for having me on.

Yeah, and hey, until next time, bless you and thank you.

And uh from here at Riding Bulls and Taming Bears, uh, until next time.

See you soon.