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Kudlow reflects on Bush's speech in Brussels

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Feb 14, 2005
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By Lawrence Kudlow

President Bush's moral-high-ground, idea-driven foreign policy was well represented in an uber-speech he delivered in Brussels and throughout his trip to Old and New Europe this week. He again pulled from Natan Sharansky's big thought on the transforming power of democracy and freedom, saying in Brussels that "regimes that terrorize their own people will not hesitate to support terror abroad," that "the false stability of dictatorship and stagnation can only lead to deeper resentment," and that "lasting successful reform in a broader Middle East will not be imposed from the outside. It must be chosen from within."

Mr. Bush has argued democratization is the only way to drain the swamp of totalitarianism in rogue countries. In Brussels, he again underscored Mr. Sharansky's big thought when he said, "America supports Europe's democratic unity for the same reason we support the spread of democracy in the Middle East: because freedom leads to peace."
Later, he extended that idea, arguing that "for Russia to make progress as a European nation, the Russian government must renew a commitment to democracy and the rule of law ... the United States and all European countries should place democratic reform at the heart of their dialogue with Russia."
So, while the president engaged in a bit of fence-mending, and a lot of public diplomacy, he remained decidedly on message.
Moving to trade, Mr. Bush said. "Open markets create jobs and lift income, and draw whole nations into an expanding circle of freedom and opportunity." He then made a pitch for a renewed commitment to successful global trade talks.
Sounding very much like a supply-sider, the president next expanded his vision for a new round of domestic tax reform to additional worldwide tax reform. All nations, he said, should pursue "sound fiscal policies of low taxes and fiscal restraint and reform that promote a stable world financial system and foster economic growth."
Mr. Bush has a growing audience for such statements. The New Europe countries all are moving toward flat-tax reform, much to the consternation of Old Europe welfarists in France and Germany. Even Russia adopted a flat tax. Most recently, Romania installed a 16 percent single-tax-rate system.
Later in the week, in the Slovak Republic city of Bratislava, Mr. Bush even touted a flat tax: "the President [Mikulas Dzurinda] put a flat tax in place; he simplified his tax code, which has helped to attract capital and create economic vitality and growth. I really congratulate you and your government for making wise decisions."
Also in Bratislava, Mr. Bush called for expanding democracy to Georgia, Ukraine, Moldova, Belarus, and all the former Soviet states. It was a Reaganesque moment: Tear down those old dictatorships. "Eventually, the call of liberty comes to every mind and every soul," Mr. Bush told the cheering Slovakian throngs. "And one day, freedom's promise will reach every people and every nation." Soon after, Mr. Bush told Russian president Vladimir Putin "democracies have certain things in common; they have a rule of law and protection of minorities, a free press, and a viable political opposition."
But back to Brussels. Mr. Bush next showed his hand on global climate change -- and it wasn't the Kyoto hand, which would punish economic growth and drive up unemployment. Instead, the president said, "Emerging technologies, such as hydrogen-powered vehicles, electricity from renewable energy sources, clean-coal technology, will encourage economic growth that is environmentally responsible."
We even heard a clear reference to the eminent economist Joseph Schumpeter, who created a model of economic growth centered on entrepreneurs searching for technological advances and applications that launch new long economic growth cycles. Mr. Bush said, "All of us can use the power of human ingenuity to improve the environment for generations to come." He then added, "By researching, by developing, by promoting new technologies across the world, all nations, including the developing countries, can advance economically while slowing the growth in global greenhouse gases and avoid pollutants that undermine public health."
Implicit here is the Schumpeterian concept of invention and innovation through technology to foster growth and better serve humanity. The power of human ingenuity is itself a powerful idea. It takes a free-market economy with appropriate tax incentives and open trade to set the framework necessary for nonpolluting prosperity. (Mr. Bush also implicitly suggested the use of nuclear power.)
Mr. Bush concluded his Brussels comments with the grand vision of the "principles of democracy, individual liberty, and the rule of law." This was a good speech, full of big thoughts. It was characteristic of this president. Cynical intellectuals and media pundits in Europe and the U.S. may scoff at Mr. Bush, but the Texan again revealed himself to be a man of ideas.
Very good ideas, at that.

Lawrence Kudlow is host of CNBC's "Kudlow & Company" and is a nationally syndicated columnist.

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