Steve Forbes Thinks Destruction of Hezbollah Would Be Good for Stocks

This is a partial transcript from "Your World with Neil Cavuto," July 19, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: Is the answer to the Mideast crisis to just let them fight? Well, Steve Forbes certainly thinks so. Steve says that crushing Hezbollah will be good for peace and stocks.

With us now is the editor in chief of Forbes magazine and, of course, the star of that show "Forbes on FOX," Steve Forbes.

Steve, good to see you.

STEVE FORBES, PRESIDENT & CEO, FORBES INC.: Good to be with you.

CAVUTO: Is that the answer, just pound away?

FORBES: I think the answer is to cripple Hezbollah. They have violated routine agreements in the past. They provoked this. A cease-fire will simply put off the day of reckoning. Lebanon will never get democracy with that force there. I think the Israelis are right to realize it's now or never.

CAVUTO: Still, the Israelis realize that Hezbollah had a more sophisticated arsenal than was earlier calculated.

(CROSSTALK)

CAVUTO: So, you could argue, if the world sees this as an Israeli pounding game for the next couple of weeks, players like Syria and Iran are going to provide the means by which Hezbollah can fight back, right?

FORBES: I think if the Israelis decide to do real ground operations in southern Lebanon — and I think they're coming to that conclusion — that they're going to do a serious...

(CROSSTALK)

CAVUTO: Wouldn't that change everything, or no?

FORBES: No. I think...

CAVUTO: What do you think the rest of the Arab world does?

FORBES: Well, I think, outside of Syria, which is Arab, and Iran, which is not, most of the Arab governments, Sunni-dominated, wouldn't mind seeing Hezbollah cut down to size.

They fear Iran. They know Hezbollah is a puppet of Iran. They don't like Syria behind closed doors. So, quietly — and not so quietly — they hope the Israelis do the job, and do it right.

CAVUTO: So, Israel takes soldiers into Lebanon — that's not something it has not done yet — but you don't think that would lead to a domino chain of events of other Arab countries that might get involved...

(CROSSTALK)

FORBES: No, because, with Syria, they know, if they have a real war with Israel, Israel will win it, even though the Syrians can pound them for a short while on the Golan Heights.

And Iran does not want a situation where Israel has the pretext to take strikes against their nuclear bomb program.

CAVUTO: The wild card, in the interim, Steve, is oil. It's been coming down over the last few days. But, obviously, a development like that would be reacted to very differently, wouldn't it?

FORBES: It might, short term, send the price of oil up.

But I think resolving the crisis, one way or the other, especially the atom crisis, nuclear crisis, with Iran, over the next few months, would actually be positive for oil, because Iran will produce it. These countries need the revenue.

CAVUTO: Yes.

FORBES: So, they make warlike noises, but they need that money.

CAVUTO: Well, there's a wire report — Steve, very quickly, I want to get your reaction — Lebanon would demand compensation from Israel for pounding the heck out of Lebanon.

FORBES: If Israel got rid of Hezbollah, I think the Lebanese government would be quite happy. That would be payment enough.

And I think the Israeli government, if they thought Lebanon was going to actually develop a democracy, would, behind the scenes, help the Lebanese government develop its army, which it's just in the beginning stages of doing. It's an army that is in no position to take on Hezbollah. Israel, I think, would see it in its interest to have a true Lebanese army, not Hezbollah, dominating the south.

CAVUTO: That's interesting.

All right, Steve Forbes, the guy is an amazing historian.

Don't forget, you can catch Steve and the folks from "Forbes on FOX." We're going to have a special live edition of "The Cost of Freedom." We're still trying to coax Steve to come in here on a Saturday.

(LAUGHTER)

CAVUTO: I'm very close to that. Anyway, that's this weekend.

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