Bush's Brussels Ideas
By Kudlow's Money Politic$
President Bush’s ideas-driven and ideals-driven foreign policy was well-represented in his uber-speech in Brussels. Begin with Natan Sharansky’s big thought on the transforming power of democracy and freedom. From Sharansky Bush has argued that draining the swamp in rogue countries can only be achieved through democratization. In the speech, the President says, “Regimes that terrorize their own people will not hesitate to support terror abroad…the false stability of dictatorship and stagnation can only lead to deeper resentment…Lasting successful reform in a broader Middle East will not be imposed from the outside. It must be chosen from within.”
Mr. Bush underscores the Sharansky thought later in his speech by saying, “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.” And then later the President argues 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.”
Mr. Bush then reveals his supply-side beliefs by talking about free trade. “…as open markets create jobs and lift income, and draw whole nations into an expanding circle of freedom and opportunity…” He makes a pitch for renewed commitment to bring global trade talks to a successful conclusion.
Then the President expands his vision for a new round of tax reform at home in the US to additional tax reform worldwide. “We should all pursue fiscal policies in our nations – sound fiscal policies of low taxes and fiscal restraint and reform that promote a stable world financial system, and foster economic growth.” The New Europe countries are all moving toward flat tax reform, much to the consternation of Old Europe welfarists in France and Germany. Even Russia has adopted a flat tax. Most recently, Romania has installed a 16% single tax rate system.
Importantly, in the Slovak Republic capital of Bratislava, Bush touted the flat tax. “And 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 decision.”
Then Bush shows his hand on global climate change. But it is not the Kyoto version, which would punish economic growth and drive up unemployment. Instead, the President relies on “Emerging technologies, such as hydrogen-powered vehicles, electricity from renewable energy sources, clean coal technology, will encourage economic growth that is environmentally responsible.”
Now here comes a clear reference to the eminent economist Joseph Schumpeter, who created a model of economic growth that puts the entrepreneur at the center in search of technological advances and applications that launch new long cycles of economic growth. Bush says, “All of us can use the power of human ingenuity to improve the environment for generations to come.”
He then adds, “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 humankind. 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 non-polluting prosperity. Bush also implicitly suggests the use of nuclear power.
The President ends with the grand vision thoughts of the “principles of democracy, individual liberty, and the rule of law.” This was a good speech, full of big thoughts. It is characteristic of this president. Cynical intellectuals and media pundits scoff at Bush. But once again the Texan reveals himself to be a man of ideas. Very good ideas, at that. |
