THE VIEW FROM UP HERE

By MATTHEW MILLER

IF THE ADAGE IS RIGHT that says "where you stand depends on where you sit," then getting inside the mind of presidential hopeful Steve Forbes means visiting a rarefied seat indeed. Imagine that you've won the prebirth lottery and entered the world destined to inherit $400 million and a publishing empire. What might you fear most? Losing your endowment. You might squander it through bad investments, of course, but that's something you can hope to control. Any money manager can tell you the real threats you face: taxes and inflation.

Maybe it's no coincidence then that Forbes' column, "Fact and Comment," which has run in Forbes since the mid-1970s, reveals an absolute mania for cutting taxes and preserving "sound money." Everyone has heard about Forbes' flat tax. But what else does he stand for? Where Malcolm Forbes was famous for collecting Faberge eggs and toy soldiers, Steve Forbes' writings show him to be a collector of policy fetishes that range from mainstream to downright odd. The one constant is their angle of vision, which, as befits an heir, is decidedly a view from the top.

It's hardly news that Forbes is an apostle of supply-side economics, whose creed of tax cuts above all was discredited by the huge deficits of the 1980s. Nor is it a surprise that in a business magazine, taxes and prices would be popular topics. What's striking is the sheer intensity of Forbes' obsession. Since 1988, Forbes has written at least 65 pieces that urge tax cuts, moan about taxes here and abroad, look back with anger on tax hikes past or hail great tax cuts and cutters of yesteryear. No fewer than 45 columns, meanwhile, give lectures on the need for stable money, preferably achieved by returning to a gold standard, and berate the Federal Reserve and other financial authorities for assorted crimes against currency. By contrast, just a handful of Forbes' columns discuss welfare reform or returning power to the states, other longstanding G.O.P. favorites.

Under the influence of supply-side guru Jude Wanniski, Forbes argues on the stump that, as was the case between World War II and the late 1960s, "we must tie the value of the dollar to a fixed measure, such as gold, so that a dollar today will be worth a dollar tomorrow." He also argues that using the gold standard to fix the dollar's value vis-a-vis other currencies would boost world trade.

While some experts say going back to a scheme of "fixed" exchange rates could make commerce more predictable, most businesses already protect themselves against currency fluctuations through modern hedging transactions. Most economists warn that the cost of returning to a gold-based currency could be enormous. Monetary authorities may be forced to raise interest rates even in the midst of a recession to encourage dollar purchases needed to defend the dollar's fixed value. The result? A mild business downturn could spiral into something far worse. Sticking with the gold standard in this situation would be the economic equivalent of a pilot's refusing, upon seeing a collision ahead, to take the plane off autopilot.

What's more, the notion that tying the dollar to gold is needed to keep inflation low is simply false, mainstream economists say, and makes Forbes' passion almost inexplicable. Ever since Fed chairman Paul Volcker, whom Forbes calls an "obtuse man," wrung double-digit inflation out of the economy in the early 1980s, yearly price increases have averaged 3% to 3.5%. Yet despite this climate, Forbes called on the Treasury Department last year to issue bonds that were indexed to inflation to eliminate this unacceptable risk to principal.

Forbes' vaunted optimism, like F.D.R.'s, springs from the security and confidence that seem his birthright. Yet F.D.R.'s smile told Americans that we could face adversity, and triumph. Forbes' smile comes without the challenge. Leona Helmsley once ran hotel ads telling customers not to put up with anything she wouldn't. 'I've never had to make a hard choice," Forbes seems to say, similarly. "Why should you?"

Take Forbes' make-believe on the deficit. Forbes' tax cuts would blow an estimated $140 billion hole in the budget; the spending cuts that he says would offset the cuts are vague blather. He wouldn't cut defense. He says he would 'wipe out' corporate welfare but offers no specifics, saying between campaign stops only that 'a lot can be done with agriculture subsidies." Forbes says he'll "strip" the departments of Commerce, Education, Energy and Housing and Urban Development of "all but essential functions." Sounds tough. But it's a knock-off of the G.O.P.'s box-shuffling plan of earlier this year, which sliced a mere 1% from federal spending and 5% from the deficit. Forbes isn't asking citizens to give up anything to solve a collective problem. He leaves that to rivals like Dole, whose more responsible approach earns them the Forbes sobriquet "dour sourpuss."

It's an axiom of economics that to get inflation down, you have to tolerate slower growth for a time; to boost employment, you risk some inflation. As with most trade-offs, Forbes says this one doesn't exist. Instead, he is pro-panacea. Growth, tax cuts, gold and free trade are his painless cures of choice. He scorns "austerity" in all its guises. "Obstacles lurk everywhere to achieving our full potential," Forbes says, be they progressive taxation, outdated telecommunications laws or "idiotic" economic policies in Germany. The victims waiting to be "unshackled" are likewise ubiquitous: inner-city entrepreneurs, long-suffering citizens of former communist countries, rich investors who would unleash money for fresh investment if only they could get, well, a tax cut.

For old wealth, discretion is the better part of survival, which helps explain another Forbes passion: privacy. It's not only reflected in his refusal to release his tax returns; he was also appalled when USA Today confronted Arthur Ashe in 1992 and broke the story that Ashe had aids. Forbes has called the Census Bureau's detailed questionnaires an "outrage," asked for a law guaranteeing the privacy of medical records in our computer age and fought the idea of a national ID card that proponents say would curb illegal immigration. "The loss of privacy," Forbes argued, "outweighs any gains."

On social issues, where Forbes' views seem less fully formed, his instincts run the gamut from noblesse oblige to let-them-eat-cake. He owns his home, for instance, so why shouldn't tenants in public housing have a chance to own theirs? He sends his kids to private schools, so he champions school choice and vouchers, detests the national teachers' union (which he dubs the "Neanderthal" Education Association) and rejects as an unwarranted intrusion the once bipartisan movement for national learning standards that culminated in President Clinton's Goals 2000 initiative. Forbes had a very special apprenticeship program courtesy of Dad, so no wonder he believes "you don't need government to provide skills training. With a vibrant economy, which my economic policies would create, people can do it themselves and will have an incentive to do so because opportunity will flourish." Without specifics, he says he'd "phase out" affirmative action by the end of his first term.

Like his peers in the American gentry, Forbes displays a visceral dislike for lawyers and the suits and rules they spawn that nibble away at hard-earned money. He supports limits on shareholder suits as well as the "English rule," which discourages frivolous litigation by forcing the losing party to pay the other side's fees. The Food and Drug Administration and the Federal Communications Commission loom in his columns as especially power hungry and antiquated. In practice, however, his anti-interventionist instincts aren't so tidy. Forbes has railed against industrial policy, for example, decrying the government-sponsored Sematech chip consortium and the Clinton Pentagon's development of flat-panel computer displays. Yet he heartily endorses Kemp-style enterprise zones that, whatever their worthy aims, amount to a textbook use of government subsidies to improve upon markets.

Such well-intended confusion reaches a crescendo for Forbes when it comes to health care, an issue that exemplifies his intellectual style. On one hand he delights in bucking the consensus of officials and analysts in both parties, saying it's wrong for Washington to tell us we're spending too much of our national income on health. If that's what the market wants, so be it. In the next breath, however, he reverts to the standard observation that health markets don't work right. "Having the illusion that someone else is paying [through insurance]," Forbes says, "we pay too little attention to the prices of health products and services." You can argue either of these positions. But it's awkward to argue them simultaneously.

His chief health-care idea is Medical Savings Accounts, which unsurprisingly bestow new rewards on those whose good health might well be termed an accident of birth. His plan would push people toward catastrophic-protection insurance polices with very high deductibles--say, $3,000. Medical bills up to this amount would be paid from tax-free accounts into which employers and employees contribute. Since people could keep what they saved below the $3,000 and invest it tax-free like an IRA, they'd have every incentive to be smart medical shoppers.

What's wrong with that? Many analysts fear that Medical Savings Accounts will lure healthier citizens with low medical bills, who stand to gain most from the tax-free treatment of their savings. This could undermine the broader pooling of risks that makes insurance possible, leaving sicker Americans behind in ever costlier plans.

In the end maverick Forbes could shine by striding where ordinary pols tiptoe: on Social Security. Here the provocative editor is at his best, saying frankly that the system is headed toward cash shortfalls around 2010 and thus requires serious reform for the next generation. He's floated such ideas as devoting a part of younger American's payroll taxes to savings accounts that they can control and build for retirement. The devil is in the details, of course, and Forbes will surely (and unfairly) be tarred with the old Democratic charge that he's out to "privatize" the system. But the ideas Forbes is offering on the stump are quietly being debated by the advisory council that reports to Congress later this year on Social Security's future. Depending on how much he stresses it, Forbes could take credit for making Social Security an issue that actually gets addressed in 1997 rather than punted, Washington-style, beyond the next few elections.

Whatever his destiny in the campaign, Forbes' fate in life, and on the soapbox his fortune has bankrolled, may prompt deeper reflection among his countrymen on lasting questions of fairness. "It is immoral," Forbes wrote with passion in 1992, "in that it gives some people unearned gains and gives other people unearned, unexpected losses." Steve Forbes was talking about inflation. He might have said the same about birth.

--With reporting by Michael Kramer

With reporting by Michael Kramer