Mike Shedlock

The latest Gallup monthly poll shows Congress' Approval Ties All-Time Low at 13%

The percentage of Americans who approve of the job Congress is doing returned to 13% in October, matching the all-time Gallup low on this measure, first recorded in December 2010 and repeated in August.



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Congress' approval has been low all year, registering below 20% each month since June. The latest results are based on a Gallup poll conducted Oct. 6-9.

Behind the recent rock-bottom ratings is subpar approval from all three party groups. Republicans' and independents' approval of Congress in 2011 has consistently been below 25%, and more often below 20%. After averaging 24% from January through July, Democrats' approval fell sharply in August, to 15%, and has remained lower than that since.

Currently, Republicans' and Democrats' approval of Congress is identical, at 14%, similar to the 13% among independents.
Clearly people are unhappy, and it's primarily about jobs. Secondarily it's about Congressional bickering and not getting anything done about the deficit (or anything else).

Congressional Scorecard

  • There have been no structural reforms and no desperately needed repeal of Davis-Bacon.
  • No legislators brought right-to-work laws as a bargaining chip in the budget negotiations.
  • Lobbyists effectively write our legislation.
  • There are no pending measures for campaign finance reforms
  • The bank reforms that did pass have been both toothless and useless.
  • The healthcare bill that passed is a disaster
  • Attempts to reform Medicare failed
  • Military spending is extraordinarily wasteful but Congress likes to funnel wasteful spending to their districts to create jobs
  • No one believes either party will rein in deficit spending (and they won't)
  • Congressional compromise amounts to spending more on the military in return for spending more on social programs. Economically we can afford neither.

Factor into the picture a jobless non-recovery with real wages falling, and the Congressional approval rating is both easy to understand and well deserved.

At long last, Harrisburg Files for Bankruptcy on Debt

Harrisburg, Pennsylvania, facing a state takeover of its finances, filed for bankruptcy protection after failing to pay the debt on a trash-to-energy incinerator.

The council made its 4-3 decision against the advice of a city attorney who said the panel did not follow proper procedure. It was the ninth bankruptcy filing this year by a municipal-bond issuer, according to James Spiotto, a partner at Chapman & Cutler in Chicago who tracks such cases.

“This was a last resort,” Mark D. Schwartz, the council’s Bryn Mawr-based lawyer, said after he faxed the documents to a federal court yesterday. “They’re at their wits’ end.”

Harrisburg would be the biggest city bankruptcy since Vallejo, California, filed in 2008, according to a ranking by Municipal Market Advisors, a research firm in Concord, Massachusetts. Municipalities across the nation have been battered by the financial crisis. Harrisburg’s filing came less than a month after Alabama’s Jefferson County Commission voted to try to avert what would the nation’s biggest municipal bankruptcy, and nine months after Vallejo emerged.

While Chapter 9 bankruptcy, named for the section of federal law that governs insolvent municipalities, would mean the loss of state aid under a law passed in June, it would be better than pain caused by a state-imposed recovery plan, said Councilwoman Susan Brown-Wilson.

“We’re not incompetent,” Brown-Wilson said. “We’re just not going to let you run us over with the train anymore.”

Going Rogue

Jason Hess, acting city attorney, told council members that they didn’t follow procedure and their action wouldn’t be binding. The members went ahead.

The filing is “a ridiculous idea not worth taking seriously,” Robert Philbin, a spokesman for Mayor Linda Thompson, said in a phone call today.

Although Harrisburg was officially in bankruptcy when it filed the Chapter 9 petition, whether it stays there is an open question. Unlike companies, whose Chapter 11 filings are rarely dismissed, a municipality can find itself tossed out of court.

Federal law lets states place restrictions on bankruptcy filings by municipalities. As a result, the Bankruptcy Code calls for the judge to entertain objections.

If an objector shows that the filing wasn’t authorized under state law, the bankruptcy court dismisses the petition.

A state law bars Harrisburg from filing until July 2012. Of the 629 Chapter 9 filings since 1937, 161 cases have been dismissed or their plans haven’t been confirmed, Spiotto said.

Harrisburg finally did what should have been done three years ago. Instead, taxpayers have been put through hell because the city council refused to do what needed to be done.

Unfortunately, those against bankruptcy will likely waste months of time, energy, and dollars fighting the decision instead of going along with it. If the law requires Harrisburg wait until July 2012, nothing will stop the city council from doing the same thing eight months from now.

Hopefully, Mayor Linda Thompson is shown the door in the next election, assuming a court receivership plan does not effectively remove her in the meantime.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


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Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.
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