- The Washington Times - Thursday, July 26, 2001

President Bush missed a golden opportunity to vigorously sound a clarion call for increased global economic growth when the G-8 leaders of the biggest industrial nations met in Genoa last week.
With Europe and the Pacific Rim countries in a deep economic slump that has hurt U.S. exports and further weakened our economy, the summit was a great chance for Mr. Bush to move the international, bureaucratic-prone discussion away from greenhouse gases and toward the steps needed to spur economic growth and prosperity (without which the poorer nations can do nothing about the environment).
Mr. Bush left for the summit with a Europeanized statement about global poverty and disease, tying it into World Bank grants and loans. The only effective antidote for poverty and hunger is free markets, free trade, lower taxes and less regulation.
It was the president's opportunity to talk expansively about the tax cut medicine he prescribed to revive our economy and to explain why the world's distressed economies need to follow our example. Mr. Bush could become — like Ronald Reagan before him — a champion of free market capitalism as the only system that has brought more prosperity to more people than any other ism in the history of the world.
People around the world are ready to listen. If a pollster asked the average struggling European, Japanese worker or employer to list their major concerns, I doubt that the Kyoto Protocol would be included in the first 10 issues they mentioned.
But apparently the White House didn't think of the larger strategic economic issues that could have moved the summit's agenda onto friendlier grounds. It would have allowed the president to voice global-growth issues that need a champion. Listening to the comments from France, Germany, Japan and the others last week, you would never know that the countries suffered from any economic problems at all.
Among the EU countries that have adopted the Euro as their currency, economic growth was expected to be a dismal 1 percent to 2 percent this year. Japan, the world's second-largest economy, has fallen back into a recession, affecting most of Asia.
Unemployment has improved somewhat in Europe, but it remains at levels that are shocking in this country. France's jobless rate is at 8.1 percent and has lost its best and brightest who cannot find jobs there. German unemployment is nearly 8 percent. Japan's usually low jobless rate is now at 5 percent and climbing.
These countries and others have seen their economies slow to a crawl. Germany's economy, the biggest on the Continent, will grow by barely 1 percent this year. Japan's economy is expected to plummet further to minus 0.9 percent this year, with no growth in sight.
Unlike the United States, where the Federal Reserve Bank has cut interest rates six straight times and Mr. Bush has cut tax rates, the European Central Bank refuses to cut interest rates. Most of Europe resists tax cuts, fearing it will endanger their welfare state bureaucracies. Japan has slashed its interest rates to nearly zero, but what remains to be seen is if it will give its beleaguered economy the tax relief desperately needed to recover.
The declining global economy was the chief focus of discussion at the G-7 meeting of the leading industrial democracies earlier this month in Rome. And, much to his credit, Treasury Secretary Paul O'Neill lectured his counterparts from Britain, Canada, France, Germany, Italy and Japan that the United States has moved boldly to get its economy growing again. They had to do the same. There were no takers to his challenge.
Now U.S. manufacturers are complaining that the strong dollar is hurting their sales abroad. Many companies have blamed the strong dollar in recent weeks for their poor earnings statements and the National Association of Manufacturers wants the United States to take action to bring the dollar down a little against the euro and the yen.
But a weaker dollar is not the solution to an ailing Europe and Asia. The dollar's value is a reflection of our economy's strengths and the weakness of other economies that need to become more competitive. It is better to let the marketplace decide the value of its currencies than artificially undermining stronger currencies.
What is needed now are a series of coordinated free market, pro-growth steps by the major industrial powers in Europe and Asia to get the economies growing again. Mr. Bush knows what those steps are and is applying them to our own situation here at home.
Like it or not, America's economy is inextricably tied to the global economy. That's why it is critical for this administration to pressure our trading partners to follow our example.
The president moved boldly last week on the national security stage to seize the initiative on reducing missile stockpiles with Russia. Now he must lead on the global economic stage as well.

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