But Forbes was, by all accounts, a struggling, marginal publication—the “National Enquirer of business publications,” in the words of one historical account, until Bertie’s death in 1954 and the ascension of his son, Malcolm, who would become the iconic face of both the magazine and of a new, brash brand of capitalism. Most of us remember the private plane, Capitalist Tool, the Highlander yachts, and the Fabergé eggs on display in the lobby of the magazine’s swank Fifth Avenue headquarters. But, beyond the flash, the Forbes 400 (started in 1982), and other celebrations of wealth, Forbes the magazine was able to established itself as the home of serious business journalism and thereby create the kind of value that attracted Elevation Partners in the first place. And that elevation, so to speak, was due to a large degree to the man Malcolm Forbes promoted to top editor in 1961: James W. Michaels.
The son of a Buffalo burlesque owner, Michaels distinguished himself as a wire reporter (he was first to report Gandhi’s assassination in 1948) and eventually brought a new rigor and edge to the always quirky magazine. He sharpened the magazine’s writing (a colleague said he could “edit the Lord’s Prayer down to six words and nobody would miss anything”) and elevated its “attack piece,” the business investigation, into a Forbes staple and defining feature. The magazine was a talent factory and in the 1980s routinely cranked out killer exposés, including Loeb-award winners like one on a highflying savings and loan, Financial Corporation of America, by Allan Sloan and Howard Rudnitsky, and a takedown by Richard Stern on the notorious small-stock boiler-room operator Robert Brennan.
“Like well-crafted jury summations, they proved, never asserted,” writes a former managing editor, Stewart Pinkerton, of the classic Forbes story. Pinkerton’s 2011 Fall of the House of Forbes, along with Christopher Winans’s excellent 1990 biography, Malcolm Forbes both nicely emphasize Michaels’s outsized role.
Michaels’ tirades were famous (or notorious, depending on whether you were the target). “This isn’t reporting,” he scribbled atop one particularly credulous piece, according to Pinkerton. “It’s stenography! Why is this person still on staff????” In one of my favorite anecdotes, recounted by Pinkerton, Michaels at an editorial meeting spontaneously blurts out: “It’s time for a really nasty story. Let’s really stir up the animals.” The result was a scathing piece on the spendthrift ways of William Agee and wife, Mary Cunningham Agee, who had achieved notoriety for mixing business and romance at Bendix Corp. and who were then involved with construction firm Morrison-Knudsen.
Some of the best Wall Street reporting of the 1990s was done by none other than Gretchen Morgenson before she decamped to the Times. (For the full story on where Forbes fit into business news history, you’ll just have to get [plug alert!] my book: The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism [January 2014, Columbia University Press].)
There were many factors at work, of course, but it wasn’t entirely coincidence that Forbes went from being a second-tier player, at best, with circulation of 130,000 when Michaels arrived to a formidable rival to Fortune and Businessweek with circulation in the 700,000-range by the time he retired in 1999.
The Fabergé eggs are gone; the Fifth Avenue mansion is sold. But when the next owners of Forbes—whomever they are—consider which direction they want to take the magazine, they’d be well advised to read a few back issues and start finding its inner Michaels.