The self-deluding temptation for a conservative president whose party has lost control of Congress is to cut deals with the opposing party in order to "get something done" before leaving office. When the deal is about trading off higher taxes for lower spending, he should be doubly on guard. And so should his supporters.

Unfortunately, President Bush has been making noises--or perhaps I should say, he is allowing "pregnant pauses"--that are encouraging speculation about a possible compromise to "save" Social Security. In a deal with the new Congressional majority, the Administration supposedly would get budget savings in the future (note: the future) while Democrats will get a definite increase in the Social Security tax for those making over $94,000 a year and maybe another raise in the retirement age. Even if the Democrats made good on their word, it would not be a good deal. "Savings" not spent this year can easily be spent in later years, while it is very hard to get any payroll tax reduced once it has been raised.

Experience in the Reagan years and the Bush 41 years shows that liberals ultimately cannot help spending any new tax revenue that comes along, no matter their fulsome promises beforehand. Liberals offer conservative presidents deals on taxes and spending the way the guy in the old story asks the restaurant owner, "Will you give me a hamburger today for $3 next Thursday?" If the owner is foolish, the burger gets eaten today and "Thursday" somehow never comes.

Why would the Bush 43 fall into that trap? I wouldn't believe he could, except that even Tony Snow--candid, reliable Tony Snow--is hedging in public statements now. Therefore, my sincere, loving, gentle message to the Administration is this: If you think your public opinion ratings are borderline now, watch the bottom fall out after you raise taxes.

Yes, you will get some false congratulations for "statesmanship" and "bipartisanship" from the New York Times and the network news, but that good feeling will last only until the bill is passed--and it will apply only to this topic. Former Sen. Warren Rudman (the gent who proposed the nomination of David Souter to the Supreme Court) will praise you warmly, of course, if that matters. Your approval ratings from members of the League of Women Voters will get a small, temporary bounce. You may even go up a notch in overall public approval--until the word gets out to your conservative base. Don't believe anything you hear to the contrary now: that base will be furious if you agree to a Social Security tax increase. They won't get over it, either, and it will undercut your ability to rally them for other purposes. It even will hurt you on Iraq.

As for your legacy, Mr. President, you have achieved a continuous economic expansion of historic significance. Bask in that. Don't destroy your credibility now.

You--unenlightened as you probably are--may think that human rights for non-humans is oxymoronic, or just plain moronic. But there is a growing academic movement to assign such rights in a rather promiscuous manner to lower animals, robots (if it walks like a human being and talks like a human being, it must be a human being, right?), as well as your favorite tree in the front yard. At the University of Washington some of the most strident defenders of Darwinism are also the most ardent "transhumanists", advocating the mixture of human beings and animals into new kinds of creatures. We are not talking about transplanted organs here, but hybrid creatures. If we can clone people someday soon, why not create hybrids of people and animals.

If you think I am pulling your foreleg, catch this web entry that decries People who Like People (in preference to cows or onions or satyrs or R2D2) as "human racists." Get it? You are now some kind of racist if you think people of all kinds are more worthy of special care than various non-humans.

Of course, the net product of such leveling inevitably is not so much to improve the treatment of animals (and robots), but to justify the denigration of "what it means to be human," as Pope John Paul II termed it.

It gives me satisfaction that the "transhumanists" are critical of our "human exceptionalist," Discovery Senior Fellow Wesley J. Smith.

This morning Fed Chairman Ben Bernanke testified on the budget, trade, and savings gaps -- the "triple deficits." He believes the trade deficit is mostly caused by the savings deficit. Overseas consumers save a lot. Americans save very little -- at least according to the conventional measures. Foreigners invest their savings in America. Americans buy lots of foreign goods. To the point of over-consumption, or spending "beyond our means," say many economists and other preachy observers. Thus the trade deficit.

Bernanke deserves some credit for not hyperventilating about the trade gap. But he does think it's a "problem." Increasing American savings, Bernanke says, is the solution. Bernanke referred several times to new research in "behavioral economics," a relatively new field that, among other things, looks at factors that affect consumer or business behavior beyond traditional incentives like taxes. Bernanke offered the example of 401(k)s savings accounts. He said that even though the tax incentives of 401(k)s are substantial, many employees do not take advantage of the opportunity. But, Bernanke said, research shows that if employers automatically enroll their employees in the 401(k) from the start and allow them to opt out, rather than opt in, the employees are much more likely to remain in the plan. Maybe this automatic 401(k) approach is one way to increase American savings.

After mentioning the possible positive effects of this more "behavioral" approach, Bernanke offered a mild critique of the traditional incentives to save, like tax-favored IRA accounts. Such accounts might just allow consumers to save less in other areas or other accounts if they know their IRA is the primary savings vehicle. But isn't this true of Bernanke's 401(k) approach as well? Of course it is.

Using Bernanke's "behavioral" approach, we can see why the American savings rate has now dropped "below zero." According to the traditional savings measures developed 75 years ago, Americans are now dis-saving. Sounds ominous, right? But Americans have really adjusted their saving and spending behavior according to dramatic changes in the American and global economies and in financial technologies. For example, the high-tech American service economy appears to be much less volatile in terms of unemployment and recessions than the old industrial economy. American platform companies, according to GaveKal Research, have outsourced the "high beta"--or high risk--manufacturing components of their businesses to other parts of the world. The residual knowledge work we've retained seems to be much more flexible and stable and thus resistant to unemployment and recession.

In addition, securitized assets, from equities to residential housing, have become the primary savings vehicles for American consumers, not bank accounts or cash under the mattress. These new forms of savings are not counted in the official "savings rate." So Americans can be adding to their net worth at a rate of some 10% per year and yet are said to be dis-saving. Using the old methodology makes no sense.

Adding to the American household net worth of $54 trillion--more than the rest of the world combined--the lesser chance of unemployment and severe recession means a more stable future income stream. A stable job and good prospects for alternative employment is a huge asset in itself.

In the more volatile economies around the world, which resemble an older American economy, consumers must save more under the mattress for unemployment or medical disasters. In many parts of Asia, Africa, South American, and even Europe, property rights are less certain, or non-existent, and mortgages are not in widespread use. Thus real estate is not the savings vehicle it is in the U.S. Likewise, even in fast growing economies like China and India, financial markets are not as sophisticated and mature, and savings is thus plowed into U.S. treasuries by the governments. In the future, Chinese consumers will be able to buy Chinese equities in much larger quantities than today. The U.S. trade deficit will fall.

All this gets us back to saving in the U.S. and the related topic of Social Security. Although Americans save more than most commentators think they do, it would still be nice for Americans to save more. But how?

The idea of personal retirement accounts as a way to transform Social Security gained some steam during the Bush presidency, but with the Democrats controlling Congress it seems dead for now. That hasn't stopped Democrats from taking the idea and turning it on its head, however. Reviving a plan from the Clinton Administration, some in Congress would like to create new savings accounts, in addition to Social Security--or "add-on accounts" as they are known. These accounts wouldn't affect Social Security but would be a new sort of entitlement for low-income workers. Others have proposed numerous and varied savings accounts for new-born babies or children up to age 18 or workers of a certain age or income, all with varied subsidies and rules and acceptable uses.

These proposals would only add to an already exploding variety of savings accounts--IRAs (traditional and Roth), 401(k)s, Keogh plans, 529 and state-based education plans, and Health Savings Accounts (HSAs). In part, these plans are the result of the ugly legislative process. In part, they are constructive efforts to reduce tax exposure in a way that works around the complex tax code and the budget rules. And in part they are paternalistic efforts to make sure you can only use money for government approved purposes.

But regardless of the tax efficiency arguments (which I favor) and the paternalistic ones (which I don't), this proliferation of specific savings vehicles at some point becomes ridiculous. How many accounts can the average family manage? How useful are these plans when families quickly outgrow the income thresholds and can no longer contribute to the savings vehicle they set up a few years ago? How will all these plans work when people change jobs and tax-status and home-states so often? And isn't the administration of all these duplicative accounts pretty inefficient?

The answer is not to create additional special savings accounts, with new rules and rights and thresholds and bureaucracies. Instead, raise the existing Roth IRA contribution limit and income threshold. Or even better, reform the entire code to tax only consumption, not investment. Elimination of the capital gains and dividends taxes would be the ultimate Roth IRA. Invest as much after-tax income as you want without being penalized as your savings grow. Keep all your savings in a manageable account, or set of accounts, with the flexibility to use the funds for retirement, health care, education, emergency, or entrepreneurship. And even make Bernanke's beloved behavior--automatic 401(k) participation--the default position for employees. That minor switch seems simple enough and is still voluntary.

Americans save more than we think. New efforts to encourage more saving should only be adopted if they are simple and boost economic growth.

-Bret Swanson

Cox & Forkum

There is a dramatic tragedy playing out in Venezuela, the early acts forecasting in dread what the denouement will be. You have to feel great sorrow for the people of Venezuela, bamboozled and exploited by Hugo Chavez, leftist populist quickly turned dictator. Chavez' extravagances in politics and diplomacy have not dimmed his luster, but his economic blunders likely will. Chavez will bring himself down in the end, but it will take his country years to recover. Economist Richard Rahn's article on the fate in store for Chavez and Venezuela is definitely worth a read. (The estimable Dr. Rahn is, among other things, an adjunct fellow of Discovery Institute.)

The follow-up question, however, is what will follow Chavez? The very question calls to mind the current death watch for Fidel Castro. The end is clear in Cuba, too--although in very different ways--but we are not seeing nearly enough informed analysis of what comes next in either country. What transpires when Castro is gone at last? And Chavez? Does America have a plan on how to contribute to a happier future for these countries?

USS New York

It was built with 24 tons of scrap steel from the World Trade Center.

It is the fifth in a new class of warship - designed for missions that include special operations against terrorists. It will carry a crew of 360 sailors and 700 combat-ready Marines to be delivered ashore by helicopters and assault craft.

Steel from the World Trade Center was melted down in a foundry in Amite, LA to cast the ship's bow section. When it was poured into the molds on Sept. 9, 2003, "those big rough steelworkers treated it with total reverence," recalled Navy Capt. Kevin Wensing, who was there. "It was a spiritual moment for everybody there."

Junior Chavers, foundry operations manager, said that when the trade center steel first arrived, he touched it with his hand and the "hair on my neck stood up." "It had a big meaning to it for all of us," he said. "They knocked us down. They can't keep us down. We're going to be back."

The ship's motto? - 'Never Forget'

(We thank Cadet Fourth Class Shane Fink of the CS-19 Wolverines who forwarded this message to his family and friends, and they to us.)

I know a little about what is likely to be in the president's State of the Union (SOTU) address and, for what it is worth, I suspect the speech will be well received as principled, yet responsive to the supposed "bipartisan" atmosphere of a Democratic-controlled Congress. I personally expect to be pleased, but I don't expect that the energy portion of the speech will live up to economic adviser Al Hubbard's prediction that it will "knock your socks off." Not my socks, anyhow.

Energy is a subject we have covered extensively at Discovery Institute's Cascadia Center in recent years. (See today's Seattle Times op-ed by Steve Marshall, who is a new senior fellow of the Cascadia Center, as well as retiring president of the Seattle Municipal League, and Bruce Agnew, chairman of the Cascadia Center.) If the president's speech acknowledges the need to reduce dependence on gasoline and recommends a number of options for doing so, we at Discovery will all applaud politely. One of those options is the plug-in hybrid vehicle, using batteries to extend gas mileage several-fold. More polite applause. After all, plug-in electric hybrids (PHEVs) can sharply cut U.S. and world gasoline usage and lower air pollution world wide, and that can start to happen within in as little as a year, and then accelerate. Our national security situation starts to improve the moment we let it be known that we are going to stop subsidizing international opponents such as Iran and Chavez' Venezuela.

But here's our concern. The U.S. Government is really past the time that pointing to the promise of plug-in hybrids is an adequate response to the opportunity available. Research money is fine, but we need action. Unlike other technologies that require several years to implement, plug-in hybrid technology is far enough along that the U.S. Government could jump start it with the expedient of an Executive Order (EO). No Congressional action is needed. The EO would direct the General Services Administration and the Postal Service to provide a purchase promise for some share of the 100,000 or so vehicles the federal government buys each year--providing specs that dictate acceptable plug-in hybrid technology. The purchase order for the federal fleet could be matched manifold by state and local governments that wanted to join in doing something dramatic and immediate to cut hydrocarbon emissions.

Such an order would give Detroit assurance that auto and truck manufacturers could start production of PHEVs very soon, perhaps even by the end of 2007. We believe that they are certainly close enough to needed improvements in lithium ion batteries to move into production before President Bush's term ends. So, if the domestic auto industry indeed is awake to the opportunity--and recent announcements by General Motors and Ford suggest it is--then this represents a huge chance for it to recover its American and world market. If, after a year, Detroit can't meet the U.S. Government specs, let someone else try--say, in Japan. Helping struggling U.S auto manufacturers is a nice byproduct of what we suggest, but the main idea is to get the next generation of cars to use less fuel, and soon.

Unfortunately, I don't expect PHEVs to receive a priority in the President's speech comparable to its importance. (I hope I am pleasantly surprised.) Perhaps the institutionally cautious hand of OMB is holding back the president's staff on this issue. Regardless, unless more imaginative minds can prevail in coming weeks, efforts to gain speed on this issue will depend on Congress. We have seen serious interest so far from--among others--Sen. Sam Brownback (R-KS), Sen. Joe Lieberman Independent D-CT), and Evan Bayh (D-IN), and, in the House, Rep. Jay Inslee (D-WA).

To fellow conservatives who suggest that the government should just let the free market lead in this field, I would point out that reducing gasoline dependence is a national security and economic independence issue. Further, we are not suggesting some new subsidy program, only targeted use of the government's existing purchasing power to make a desirable transportation transition. The whole federal fleet need not be enlisted, either, just enough to goose Detroit into faster action. Once Detroit is fully engaged, the private sector market will respond.

And, to repeat, the president can make this happen himself. He and his aides should consider that PHEVs are likely to be his most propitious energy choice, the one he can most likely bring to fruition during what's left of his term of office. Pursue the others, of course, but step up the pace on PHEVs.

Be bolder, Mr. President.

We had high hopes when Al Hubbard, the President's economic adviser, predicted that the energy section of the State of the Union address would "knock your socks off." Well, it didn't live up to that description, did it? Noting pre-speech leaks yesterday (see below) I predicted that "polite applause" would be the proper reaction, nothing more.

However, this morning the White House followed up with an Executive Order--which was the kind of action we have been suggesting--and the EO does, after all, direct the Federal Government to "Reduce Oil Consumption in Fleet Vehicles. The President...has directed Federal agencies to purchase plug-in hybrid vehicles when commercially available."

There are also directives related to making use of alternative energy and renewable power. But our emphasis in the energy issue has been plug-in hybrid vehicles (PHEVs) because the technology is already close to production quality. Ford has a car, the Edge, that the company had touring around the Capitol yesterday. GM has the Volt, though it's still in the mock-up stage; that is, the thing can't run yet.

The Ford Edge

Ford apparently spent $2 million to build the Edge. That is not surprising. It must have cost a pretty penny to custom-make the first television, after all. To get the Ford or GM product from the custom built stage to assembly line production--and in the process lower prices for consumers--will take many and varied inputs. Among them is the prospect of certain customers. That's where the government comes in.

We note that the Executive Order does not direct the federal agencies to offer the car manufacturers government purchase of a certain number, only "to purchase plug-in hybrid vehicles when commercially available." That leaves a pretty big loophole. How much more impressive it would have been to say, we will buy the first 50,000 plug-in hybrids as soon as they become available. (The federal government purchases about 100,000 non-defense vehicles a year, so this would be a reasonable, but strong promise.) Anyhow, specificity would have been more impressive.

Can the White House start getting specific now with the GSA and the Postal Service? Could it also dispatch representatives to the various state capitals and city halls recommending that they make comparable state and local purchase commitments? Shouldn't the state of Michigan be first in line? Imagine the prospect of various combined levels of government pledging purchases that would fully justify Detroit's going into plug-in hybrid production as early as a year from now.

Despite these reservations, my applause for the energy program--as measured by one of the Frank Luntz applause meters that someone was probably using on test audiences last night--is registering more enthusiasm the more I learn about the President's intentions.

When Hillary Clinton made a funny eye gesture and repeated a question from someone in an Iowa audience this weekend, the media jumped all over it, and her. She later complained, ""You guys keep telling me, 'Lighten up, be funny,'" yet when she does, they attack her. (Howard Kurtz' account in the Washington Post is here.) She is absolutely right about that. The media can't allow politicians to kid, to tease, and to speak with spontaneity. All jokes must be rehearsed and examined for problems by advisors, before they can be tried out. Reporters will not allow any little mistake or secondary meaning.

These are the same reporters who complain that celebrity politicos like Sen. Clinton don't make themselves available to the media except in set-piece conversations where they are very much on their guard--while pretending (as they must) to be at ease. As the old Hollywood adage about acting goes, "Just be natural. When you can fake that, you're a pro."

Already John McCain, who made his reputation with the media by his informality and accessibility back in the 2000 presidential primaries, is finding that he has to watch himself more these days. Reporters loved his maverick role then; he was the in-house Republican critic. Now he is backing President Bush on Iraq (most of the time), so they don't like him any more and will be looking for opportunities to find a verbal misstep, any little quip that can be twisted or taken out of context. You, the reader, can watch for it; it will come. If some trigger-happy interest group's leader can be found to denounce him and claim the joke "wasn't funny" and was in fact an "insult" to somebody somewhere, then the media have a new "gotcha!" trophy. The off-hand quip will be paraded as a supposed insight into the true character of the man, etc., etc.

The reason we cannot allow politicians to let their hair down and be amusing in front of reporters is the same reason that we have packaged discussion on serious issues, instead of sincere rumination. Politicians know that whatever they say can be subjected to invidious interpretation by rivals and by the accommodating media. Some marginal observation suddenly becomes tomorrow's headline. Again, the false assumption of the news is that the subject on the politician's mind is not the important one. It isn't even his true view. Rather some slip of the tongue--or something that can be construed as a slip--reveals his real purpose.

This is nonsense. Ask yourself whether you could be fairly judged by your off-hand quips, comments or thoughts.

Ronald Reagan was an amusing raconteur and his stories usually had a bite. But by the time he was running for president for real in 1980 his managers had to keep him away from informal situations. The same with George W. Bush. Ditto former Vice President Mondale--a wit much appreciated in his Senate years--and even former V.P. Al Gore, who in private is not at all the stuffed shirt of his political image. Hillary of course, has been totally swathed in a kind of publicity burkha ever since she was First Lady.

It isn't just the candidates and office holders that are given an inappropriate examination that usually misses the truths in plain sight in favor of the supposed illumination provided by a gaffe or side-comment. In the realm of serious ideas, we are not learning real news from the media much of the time, but instead seem to be following a script developed by editors and mouthed by anchormen and columnists. For several years, the script has been that the war on terror is really about whether the US was right to go into Iraq and whether our presence there is not perhaps the cause of terrorists' activities. This script is spelled out as the likely explanation in a number of dispatches that focus on Iraqis' weirdness (message: we should not be there) and the myriad problems in the war (there were no problems in the American Revolution, the Civil War or World War II, of course). We learn at length about the failure of our friends, the Israelis, to live up to the highest possible standards of civilized warfare (while their opponents are treated merely as a force of nature). Worst, there is very little news about the development of terrorists in places where no one could possibly blame the US (e.g., Bangladesh, as Yehudit Barsky reports here today). We don't learn about such stories because they seem to dispute the script that the US is not just trying to stop the advance of terrorism, but is somehow, as a result, the cause of it. To the media, the US is guilty of thinking too highly of its goals. But to the media, if something goes on that doesn't directly involve the US (much African news, for another example), then it isn't even important! Who's the real "ethno-centrist"?

There are plenty of stories about the global nature of the terror threat waiting to be written. Plenty of people in the know would talk with a reporter whom they didn't suspect of trying to expose the official for some misconduct (think Libby indictment). I believe that such stories are downplayed because they would tend to validate a very different script than that favored by the cynical media.

In short, studied humorlessness and cynicism are part of a mindset that sees the media's main job as policing the political class, and doing so as adversaries. Finding fault with elected officials especially is more significant a purpose than letting the public know what those officials actually think and what actually is facing America.

The above is a generalization. There are exceptions. Certain politicians not only are allowed to be informal, they are lionized (as Sen. McCain was in 2000 and Sen. Obama is today). Of course, that is precisely because they fit the media script of the moment. There are certain exceptional and serious reporters, too, who try to cover the real news. Since, as a result, they are badgered and second-guessed by others in their profession and rarely get the professional awards and recognition, they deserve especial gratitude from the public.

So, like I said, I am making a generalization that I think has validity. Please, Mr. Reporter, please don't jump on something I just wrote and distort it. Please. Please!