The market was closed and news was kind of slow yesterday until Senator Evan Bayh (D-IN) announced that he would not seek another term in Congress. Although one of the more outspoken critics of his own party's policies, the news was a sobering reminder of just how terrible things are in Washington. Before Scott Brown won in Massachusetts, Senator Bayh said in an "ABC News" interview that moderates and independents "just don't believe the answers we are currently proposing" when discussing the economic agenda/platform of Democrats. In his speech to formally announce his decision, Bayh touched on issues that made him sound more like a candidate running on the Republican platform than a retiring Democrat:
> Bipartisanship (his description of his friendship with fellow Hoosier senator Dick Luger was heartfelt)
> Welfare reform and getting people to work
> Rising penalties on violent crimes
> Being the "lonely voice" on balancing the budget
To be sure, however, it is the silliness on both sides of the aisle that seem to motivate Bayh. In fact, he pointed to two recent things that more or less broke the camel's back.
1. Senate voted down bipartisan panel on deficit commission.
2. A bipartisan jobs bill was junked.
Bayh was going to be reelected, which couldn't be said for Chris Dodd or Dick Durban, so his departure really hurts the White House which is finding it more difficult to get party members to simply fall on their swords. Even though Evan Bayh's father was a Great Society Liberal, as a three-term Senator his son was always more conservative, winning the governor's office on a platform of fiscal responsibility (he served two terms before turning to Congress in 1998). The message from Bayh is not unlike the message from Sarah Palin who eschewed the Conservative Political Action Conference and instead chose to speak to the first national convention...like the gathering of Tea Party members.
The political winds are swirling like no other time in decades. Polls suggest that there is room for the creation of a third political party and more and more people understand government is too big. This November is going to be wild, and that's great for the stock market. Business shouldn't compete with government, it shouldn't be held back by government, and it shouldn't be browbeaten by government. More taxes aren't the answer, nor is throwing the nation's pride under a bus.
Speaking of throwing a nation under a bus, the Greece saga continues this week. The nation that brought the world democracy, philosophy, and milestones and foundations for arts, math, and literature, is sinking under the basest of human actions. It's a long way from the moment in which Archimedes ran naked into the street after discovering how to define the volume of irregular objects by submerging them in water. The nation is arguably naked with all its faults and flaws there for the world to see, and maybe help to mend. It's going to take tough medicine, however. It's going to take a serious change of heart and change of attitude. I got a very telling email from a listener to my radio show on Saturday...
"Hello Mr. Payne. I am happy to have found a radio program where the presenter is fully aware of the situation overseas and how it affects everyone. The situation in Greece is not a surprise to me. For years I have been listening to Greeks make fun of the "robot" workers in France, Belgium, U.K., Germany, and of course Japan. The last two generations of Greeks (in Greece) have become very lazy as opposed to the Greeks residing in the rest of the world. The Greeks are quite successful once they leave Greece. The mentality in Greece is to praise the person which made their money through devious methods..." Rest of the letter posted on our website, wstreet.com
The letter did point out one burden and one reason Europe may come to the rescue. Greece is literally on the frontlines and currently spends huge amounts of money on its military, and that alone might be reason for the EU to ride to the rescue.
Empire State Manufacturing Index
The New York Federal Reserve reported that manufacturing activity in New York expanded at a faster pace in February than in previous months. The index rose to 24.9 in February from 15.9 in January. The index plunged in December (compared to November) and this morning's announcement reflects the best reading since October. New orders slowed to 8.8 in February from 20.5 in the prior month while shipments inched lower. However, inventories were flat in February after 17 straight negative monthly readings. Employment was positive for the second straight month.