Larry 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, stating 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.?

Bush has argued that democratization is the only way to drain the swamp of totalitarianism in rogue countries. In Brussels, he again underscored Sharansky?s big thought when he said that ?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 to Eastern Europe, 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, Bush said that ?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 bringing global trade talks to a successful conclusion.

Sounding very much like a supply-sider, the president next expanded his vision for a new round of tax reform at home to additional tax reform worldwide. 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.?

Bush has a growing audience for such statements. 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 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, 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.?


Larry Kudlow

Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.