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  • Morning Bell: Second Stimulus, Same as the First

    When President Barack Obama was sworn into office, the U.S. economy employed 134.6 million people and the unemployment rate stood at 7.6%. In response to growing job losses, President Obama passed an $862 billion stimulus plan that his economic experts promised would help the United States employ at least 138.6 million people by 2010. Reality has not been kind to President Obama’s hope. Today, the Bureau of Labor and Statistics released its monthly jobs report showing the U.S. economy shed another net 20,000 jobs, leaving only 129.5 million jobs, almost 10 million short of the President’s promises.

    Anticipating this bleak job news, the President announced in his State of the Union address last week: “That is why jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight.” It is understandable why the President wants to call this new legislation a “jobs bill” instead of what it really is: his second stimulus. But that would mean admitting that his first stimulus completely failed, which both the objective evidence and the opinion of the American people show it has.

    And why did the President’s first stimulus fail? For the same reason his second stimulus is destined to fail: Only the private sector in pursuit of opportunity can create jobs on net. The best we can hope from government is that it keeps to a minimum the jobs it prevents and the income and wealth it destroys.

    And the specific policies being talked about on Capitol Hill for this second round of stimulus are particularly pernicious. The $5,000 tax credit for any business that hires a new worker not only does not create any incentive for already-struggling companies to begin hiring, it could even result in some currently unemployed individuals remaining unemployed until the tax credit is passed into law, or similarly, some companies firing some workers and then re-hiring once the tax credit is passed into law.

    The President’s TARP-funded government-subsidized loans for small businesses are also terrible policy. Besides the fact that unspent TARP funds ought to be used to pay down the deficit, the Small Business Administration has a terrible record of effectively allocating capital to the private sector.

    There is one sector of the economy that is thriving under President Barack Obama: government. This week, the Obama administration announced that the number of government employees will grow to 2.15 million this year, topping two million for the first time since President Clinton declared that “the era of big government is over.” And today, USA Today reports “the lobbying industry is humming along in the nation’s capital” as the top 20 trade associations and companies increased their lobbying expenses by 20% in 2009. ConocoPhillips spent $18.1 million dollars lobbying Congress in 2009, up from $8.5 million the year before, while it also laid off 1,300 people.

    This is a perfect example of what happens to an economy when government becomes “the focus” of job creation. Jonathan Rauch explains: “Economic thinkers have recognized for generations that every person has two ways to become wealthier. One is to produce more, the other is to capture more of what others produce. … Washington looks increasingly like a public-works jobs program for lawyers and lobbyists, a profit center for professionals who are in business for themselves.”

    The real way Washington could create jobs is by getting out of the way. Fred P. Lampropoulos, founder and chief of Merit Medical Systems Inc., told the President in December that businesses were uncertain about investment because “there’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do.” That uncertainty, he added, “is really what’s holding back the jobs.”

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    53 Responses to Morning Bell: Second Stimulus, Same as the First

    1. irene says:

      ………."a little bit louder and a little bit worse"

    2. irene says:

      I did

    3. MaryAnn- MI says:

      Companies do not hire because of tax credits. They hire because they have jobs that must be done. Jobs that must be done are created by demand for the company's product. If there is no demand for the product, there is no need to hire anyone because there will be nothing for them to do. Obama said he is not an idealouge; that leaves only one other possibility- he's an idiot.

    4. R Morin - Kennebunk says:

      In February of 2009 – one short year ago, a community bank president in Maine expressed dismay at lending $45 million in "idle funds" to the Federal Home Loan Bank of Boston….at a rate lower than he was paying his depositors. In the same article, community bank association officials lamented, "YOu can't…drag people in and make them take out a loan."

      In the same newspaper was an article about a local Ford dealership closing after 9 years in business…because, as the owner said, potential buyers were "having a hard time securing auto loans.

      See the disconnect here? It is even more demonstarted with our President robbing the TARP repayment funds and unconstitutionally disbursing $30 million to community banks….you know the rest.

      To finish the tought – These are the same community banks that had and have money to burn at the overnight window. Isn't there a better way to use the TARP funds. Say something like repaying our national debt?

    5. bigdave, ocala fl says:

      HERITAGE should be REQUIRED READING FOR EVERY PERSON IN GOVERNMENT! We are about to hear how the jobless rate fell and everything is wonderful, when the EXACT OPPOSITE is the TRUTH! Take the jobless rate and DOUBLE IT! That is REALITY! This administration LIES! Democrats have not a clue about creating jobs where it matters most, in the PRIVATE SECTOR! Obama? He has NEVER HAD A REAL JOB ! And HE is the LEADER?! All they do is raise taxes and hire more government workers who have NOTHING TO DO!!!! Government employees need to be CUT BY HALF, salaries of the remaining CUT BY 30% as well as salaries, perks and staffs of SENATORS and congress people NOW!!! The worst thing this government has done is continually DUPLICATING ITSELF. ITS ABOUT TO BURST AT THE SEAMS! WE CAN NOT AFFORD YOU! Especially when you LIE and tie our hands with BILLS based on LIES!! Cap and trade anyone?! More lies, more CONTROL, more MISERY!

    6. Mike Baker - McKinne says:

      This is the pure definition of In-Sanity….repeating the same process but expecting a different result

    7. William Downey, JD L says:

      Indecision runs through an army like a virus, and the same is true for the private sector.

      The administration can not agree internally on numbers of jobs saved or created; the Congress and the administration have put up an agenda riddled with deficit spending and obvious and hiddent taxes. The same agenda places a tremendous regulatory burden on business, and has some aspects are Constitutionally suspect. Thus creating the indecison or confusion for businesses.

    8. Richard Cancemi, Arl says:

      Anyone who doesn't see Obama for what he is, is in massive denial.

      His words continue to be empty rhetoric. Look at his deeds. Are they good or bad for America? Forget his cutesy smiles and batting of the eyes when he is trying to seduce his audience. He is a charlatan Socialist beneath his fake presentation.

      Republicans must continue to be the Party of "NO" as long as Obama continues to propose destructive socialist agendas for America!

      As Rush Limbaugh said:"Karl Marx and Saul Alynsky are not our Founding Fathers"!

    9. Robert Davis says:

      I love the way you explain the government vs. Free Enterprise situation. You come right to the point. I just wish you were appearing in all major newspapers around the country so Americans could learn how stupid the Obama et al group really is about the economy. Only good news to come from their economic policies is that there will be a Republican tsunami in November which will sweep most of these old hack socialist Demmocrats out of office. Cannot wait for the polls to open

    10. Ted Stein, President says:

      It would be more helpful to apply the lessons of history, economics and accounting in discussing this critical issue. All jobs are fundamently good. If a police officer or a school teacher continues to receive a slary for performing work, that's good. If a union worker continues to receive wages for producing automobiles or paving roads, that's good. If a banker receives earned bonuses, that's good. If entrepreneurs, many motivated by a lack of income, produce jobs by starting new companies, that's good. And, some jobs add more to the economy than others. Right now, we need people to receive and spend their income.

      All economic recessions caused by excess growth in one or more sectors that correct (bubbles) have common characteristics. Jobs are generally a lagging indicator of recovery. Compnies of all sizes downsize to survive, and for publicly traded companies, to improve earnings per share, and in some cases, continue to pay dividends. This causes a spiral effect. Without stimulus, that effect can accelerate. Further, deflation becomes more likely, and reversing deflation is a much more difficult proposition and can take years if not generations to reverse.

      I work with large commercial and investment banks through my work in private equity. They tell me the problem is a lack of credit worthiness of the companies requesting loans. Most companies are not funding growth right now. Banks won't fund losses, with or without collateral. The recession cycle means that companies must improve earnings, Typically they accomplish that by cutting jobs.

      In my opinion, without TARP and the Stimulus, there would have been major disruptions to the global economy. By comparison, allowing more bankruptcies like GM, Chrysler and several financial institutions may have eventually led to a better outcome in the long term, the impact would have been comparable to the Great Depression.

      The Bush administration initiated, and the Obama administration continued, a process to save the banks. The Stimulus was intended to replace the reduced spending of the consumer. If the authors of this article were honest with themselves, they would have done the same thing.

    11. Evan, Anchorage says:

      As soon as unemployment gets down to 7%, if it does, we need to do as Clinton did, slash governent employment by 20%. No reason that dirty deed can't be done again. Until then, freeze hiring by the feds.

    12. Carol, AZ says:

      How is it that the "we the people" can not understand that America can not pay it's bills.

      Fiscal accountability and the lack of it, continues to be published .

      The uncontrolled bounties, any exercise in retraining all directions for spending with"no limits"to change this dysfunctional thinking.

      Debt, not surplus, has controlled the world for decison making for century's.

      If you mistake this idea ,ask any family who have been given three months to get out of thier home, have received a pink slip, are now living on limited unemployment, payments and have lost the ability to pay for all other items like their car payments and car ins.

      Put this scenario on a marco lens regarding us vis. the rest of the world.

      I have neve been so afraid for the futrue of this country as I am currently.


    13. Sally Welch, Dallas says:

      "The best we can hope from government is that it keeps to a minimum the jobs it prevents and the income and wealth it destroys."

      Wow. Concise, correct, and clear. I like that. Thanks for the article.

    14. Donna, Florida says:

      BUY AMERICAN, employ your family, friends and fellow Americans.

      That is the only thing that will put Americans back to work. Have a yard sale, clean out your closets and storage units. Stop buying imports.

      It is time for Americans to take care of America.

      Are you part of the problem? or the solution?

    15. Dennis Social Circle says:

      This is more of the same. The dems thunk they can spend us into a healthy economy. It will not happen. THE ONLY JOBS THAT OBAMA HAS CREATED OR SAVED IS FEDERAL JOBS, THEY ALL BELONG TO THE UNIONS AND ARE PAID MUCH MORE THAN THEY DESERVE. THIS IS JUST WRONG.

    16. Mary.... WI says:

      What very foolish people "running"/ruining this country.

    17. Bob Veigel, Arlingto says:

      If the first bailout was bad, the second bailout must be worse. Bailouts squared must be really, really, very bad.

    18. Blair, Franconia, NH says:


    19. Ken Jarvis says:

      Murdock's Bunch – WSJ and Fox news

      and HF have done MORE TO KEEP THE ECONOMY


      They want Obama to fail.

      Remember – If Obama Fails – AMERICA FAILS

      Is that what YOU want?

      It sure seems that way.


    20. Ken Jarvis says:

      What has the HF – WSJ – Fox News – Rush – GOP or Cs,


      Answer – NOT ONE DAMN THING.


    21. Shawn, Ind. says:

      "insanity" doing the same thing over and over again and expecting different results.

      Albert Einstein

    22. James Campbell Richm says:

      Would somebody please advise all of the folks in Washington that the economy will find its own Center of Gravity. Even without shoveling money at it.

    23. Debbie, Kansas says:

      This "uncertainty" that is preventing our business from moving forward is called chaos. Obama knows that if he can keep us there long enough we'll break down. He's not clueless as many have mentioned. He knows exactly what he is doing.

    24. bigdave, ocala fl says:

      Pardon my re-interjection, but just saw the ORIGINAL MISS PIGGY, Christina Romer(another Obamatron who NEVER HAD A REAL JOB!) smilingly reporting job losses are "falling"…excuse me donut Queen, there are only so many JOBS! Like water draining out of a pool…it only holds SO MUCH water, when its gone, its gone! Obama's wealth distribution is KILLING OUR COUNTRY! This is so easy a CAVEMAN CAN DO IT! CRANK UP THE ENERGY SECTOR, DRILLING, BUILDING REFINERIES, CLEAN COAL TECHNOLOGY, REDUCE TAXES ACROSS THE BOARD(RATHER THAN THROWING OUR STOLEN MONEY DOWN A GOVERNMENT CRAPHOLE NEVER TO RETURN!), ELIMINATE REGULATIONS ON BUSINESSES AND GET RID OF THE EPA and slash government payroll. My God this is simple stuff!

    25. Lee White Tanks AZ says:

      Only the mental midgets occupying seats in Washington District of Corruption could possibly believe that a Second Stimulus could perform something the first did not.

      Here is a great place for a play on Shakespeare's immortal words, "Garbage (a Rose) by any other name is still Garbage (a Rose)"

      Quoting again, this time from Albert Einstein, "The definition of crazy is doing the same thing over and over and expecting different results" Our Political Class proves this well said axiom every day.

      PC is Thought Control


    26. SAMUEL says:

      The jobs saved were government union jobs. We have a bloated government. Our industries are gone, thanks to our great government leaders. They all had jobs. So lets sell out the AMERICAN WORKERS. Let's allow all our industries to go to china , plus let's give them great tax breaks to move to china, mexico, haiti and the other third world countries.

      Our stupid leaders thought we could live on service jobs. Mcdonalds, Wendy, Walmart.

      But we still have all the government union jobs. The teachers unions keep getting more and more billions. What do they do,,,,,,add more aids, more programs to keep the teachers in power, for more taxes.

      So fellow AMERICANS where does that leave us? We are not a competitor to the foreign countries making $2.00 A DAY! Nor can we COMPETE with their lack of OSHA, ACLU, CAP AND TRADE, AND THE UNION BOSSES.


    27. Al, Aurora IL says:

      Mr. Ken Jarvis,

      Obama failing would allow the country to succeed. HF, Fox, and all conservatives want him to fail because his objective is to destroy the economy and make us rely on government for everything. Pray for the failure of Obama to implement this overspending and overtaxing. Thank you!

    28. JFBeck says:

      Mr. Ken Jarvis (or whatever your Dem opp name really is)

      The takers of the society that you represent vs. the producers want an unaccountable world where all you have to worry about is eating, sleeping and waiting for your subsidy check in the mail. Then sit back with the other 50% of the country like you to wallow in group pity about all the fat cats that leave you in economic slavery.

      An economic slave with your mindset is indeed who you are.

      This is and has been a capitialistic economic based country.

    29. Sue From Detroit says:

      Roosevelt kept the depression going by increasing government employment. Obama is doing the same thing. The only thing that works is getting the private sector working not the government.

    30. Larry Welch, Idaho says:

      Your links to WSJ articles have limitations by WSJ; I can not read beyond the article's opening sentences unless I subscribe to the WSJ.

    31. Ken in SB says:

      Ted Stein

      Thanks for the concise and informative truth. A more widely held belief, according to the authors sources when one reads completely, the links he has supplied regarding the japan recession. That government wished it had done more domestically and infused more money sooner into its economy.

      Ken Jarvis

      You are not far from wrong. The republicans and in particular conservatives didn't have a clue as to how to negate Bush's failures and declining numbers. They still don't. It's why they can only gather in small groups and try to keep each other warm.

      It's not enough to be warm and comfortable like that, one has to willing to sacrifice and change direction when one is off course and know that it is never wise to spit into the prevailing wind.

      Thanks for your opinion. He is President for three more years and four more after that if he chooses and if unfettered corporations don't buy us a different less useful shell of a candidate.

      Thank you to the Conservative right wing Supreme court members who gave corporations (and more) rights of the individual and free reign to infuse as much cash as needed into political coffers under the guise of free speech. Good bye to McCain Feingold campaign finance reform. Here's to adios to "free" elections.

    32. Ken in SB says:


      Thanks for showing me that Rush isn't as dumb as he comes off. If he did in fact say that? BTW does he still think addicts and abusers should be jailed as common criminals? He has no place in this discussion or any other civic minded topic.

    33. charles fisenne bald says:

      Axiom: All government spending [jobs,grants, contracts to industry] is a debt that must be paid by society. Government taxation recoups a small portion of this spending.

      Government jobs == more debt

      Retrenchment of manufacturing in the USA is required to create millions of jobs

    34. Louis L Cesar F LEVY says:

      Even from the point of view of the would be mind controllers there are discrepancies as they are caught between two parallel logics: in one hand they try to pursue the destruction and kill more jobs, in the other, they believed that it is time now to start re-constructing, meaning creating jobs to entertain the illusion that they control something. All they do is messing up everything.

      The president should once more realize how far he was pulled against his own promises. Moreover the necessity to be totally at the Center-Right-at least- as a global adjuster of this dangerous inclination towards extreme and far left can correct much drifts and help see a big picture where there would be no need to try to disguise a second stimulus bill, that is, pursuing what has more chances to fail than anything else .

    35. Judith in Michigan says:

      Mr Obama & Co have failed (and lied to) the American people. Mr O knew before he became President just what he had in store for us. A lightening-speed race to a European-style Socialist government before we citizens caught on.

      Anyone with even a mediocre education knows that the policies the Dems and liberals are trying to install will not promote growth and freedoms. That leaves only the conclusion that the carnage being heaped on our country is deliberate.

      The warning signs have been everywhere, (private industry take-overs such as banks, the student loan business, and the auto industry, confiscatory taxation being put in place….spread the wealth a'la Socialism…. run-away spending and bankrupting debt, attempting to take-over the health care industry, unaccountable czars and government officials with Socialist and radical backgrounds, threats & intimidation directed at anyone who voices opposition, etc, etc)

      Most saw it but were hoping it would go away, or wasn't really true.

      Well, it hasn't gone away, and it is true. So what we must focus on now is to take away the control & power the radicals have in Congress. That is the only chance our country has of surviving this disaster. Too dramatic? Don't bet the farm on it.

    36. david Gonzales says:


    37. Prevailer76AZ says:

      Every time we receive a free gift from the government, it has been taken from someone else It's called redistribution of the wealth.

      I for one would much rather be in charge of what I give and to whom it is given. Nor do I wish to be beholden to anyone, especially the government. But that government crater of take and give just gets deeper by the minute.

    38. Jeanne Stotler,Woodb says:

      After WWII there was a freeze of sort on Gov't jobs, the bad thing was that returning veterns could go in and take a job from someone who had not served. My parents both worked for the Navy, BuORD, my father was a storage spec. and had overseen all the guns, ships etc put in mothballs, he worked all during the war as did my Mom, she was sec. to an Admiral. After the war a vet came along with no work experiance, told the navy he wanted my father's job and he was expected to train this fellow, take a grade and pay cut as well. He went to his div. cheif and told him if this guy was going to take his job they (NAVY) had better well train him themselves, he got another job in the bureau and did get a grade and pay cut but he didn't train this fellow. Today with a Fed. Emp. Union I wonder what would have happened. The Gov't. keeps getting bigger, more people doing less work and outside employment gets harder to get. When Gov't hiring was frozen is when the economy started to improve, now we are going backwards back to FDR's new deal where you get paid for not working.

    39. David Sayers Goldsbo says:

      Come on,what do expect from this gang of kommie thugs? And yes komrade Ken,we really do want Chairman Obama to fail.

    40. bigdave, ocala fl says:

      Ken in Santa Barbara, 1) Bush succumbed to DEMOCRAT Congress Pressure, and he wanted to show he could work with them…in screwing us over with demorat programs. He should have stuck to conservative principles..like the republican congress which balanced the budget by keeping CLINTON in check! 2) Unions poured hundreds of millions into Obama's campaign. Only an idiot like you would say its ok for a UNION, NOT OK FOR A CORPORATION…same difference clown. AND, UNIONS usually vote DEMORAT, while their members are split 50/50 in their voting. I say NO UNIONS AND NO CORPORATIONS, AND GET RID OF ACORN!

    41. David Sayers Goldsbo says:

      This is the third comment I have posted that HF refused to print. Where is your backbone HF? Is commie thug too harsh?

    42. Utah says:

      I wish the President would stop stimulating the economy and our Congress would stop o king it. We are already bankrupt!

    43. Dennis Weber, Kalama says:

      Obqama knows exactly what he is doing and the reasons why he is doinng them. He is not stupid, but he IS trying to destroy America. We need to stop "believing" and start "knowing". The intenet does contain sites that allow us to know instead of just believe. The Heritage Foundation, the web site titled "The Architecture of Modern Political Power" is another. These sites are history not just talk. Nixon did us a favor when he told us "don't listen to what I say, watch what I do". The media is no help in "knowing" what is going on in Washingnton DC

    44. Earl, QUEENS, NY says:

      Obama and his naïve supporters must be jumping with joy. The unemployment rate fell to 9.7% last month. But it's still higher than at any point during GW Bush's tenure. And it's still the highest since the deep recession caused by James 'My name is Earl' Carter back in the early 1980s. If McCain were in The White House now, I'm sure the lamestream MSM would be very negative about this news. Of course, were it not for the foolish error of some 63,000,000 knuckleheads on 11/4/2008, I bet the unemployment rate would now be down to the 2006 level, before the Democrats took back control of Congress.

    45. clfgef says:

      How to End Joblessness

      Jobs are lost month after month, and always prefaced by "unexpected losses". Unexpected perhaps by the Administration, but surely expected by the knowledgeable citizen, month after painful month. Only today, Feb 5, 20,000 more jobs have been lost. Yet the unemployment rate has improved, to 9.7% from 10%, explained (?) by the ruse, that the improvement (also ?) is because more of the unemployed have given up hope, and therefore are not counted as unemployed anymore. If one were to pursue this Orwellian mind game to its logical conclusion, the solution is obvious. Persuade all the unemployed to join the hopeless and stop trying to find a job. Voila! the jobless rate falls to zero!

    46. Steve, Clackamas, OR says:

      I truly appreciate the Heritage and keeping us informed as to what and what is not happening to our beloved country. Why doesn't someone in the media or of some enfluence air this to the politicians in control on national TV so we can all be witnesses to their reply. Does know one have the guts to do so!

      Also, while I like to know what's going on, I would appreciate Heritage's solutions to the problems they present.

    47. ella quinn,kinston,n says:

      Ken obama is failing on his own, he wont listen to any one.He is the one failing our country.

    48. ella quinn,kinston,n says:

      Obama fails good. We will elect someone with a brain and a heart'

    49. Ken in SB says:


      If it were possible that Ken Jarvis were a taker in your dream-scape, please discuss rationally what Enron, Goldman Sachs, AIG, and the Heritage Foundation are? If they are all telling the truth all of the time then why is it that most of the folks on this site have any complaints at all? The intrusive government that seems to be the kool-aid for the author and readership started in the yeqars after Eisenhower to give more back to business in return for it role in building a relationship with the people. Taxes were cut from 92% to less that 40%. Business was inspired to control itself. What we learned from Boesky, Slatkin, Lay, Madoff, the big three professional sports leagues, the banks, saving and loans, DeLay, Abramoff, Milken, C Street and a handfull of others is that it is not just the Dems who are worthy of scrutiny and condemnation.

      Time we all woke up!

    50. Matthew C Campbell says:

      The Obama Administration is a runaway freight train from Hell that MUST be derailed by November at the latest . . . . . !

    51. Matthew C Campbell says:

      The Obama Administration is a runaway freight train that will reach the end of the line with catastrophic results . . . . .

    52. Zack says:

      didn't republicans spend money the last ten years. 4.3 trillion from 1999-2007? 12 years of house and senate control. 8 years of the bush administration. you guys blame government for the housing crisis. cra put 7% of the entire market under provisions. over 85% of all cra loans had no corrisponding rise in back failures. -fdic reports.NOT rasmussen which is a completely bias polling system. what have you guys done to reduce the defecit- when you were in power. what have you guys done for healthcare? tax cuts cost just as much money and guess what- they didn't work. the trickle down theory doesn't work. provide solutions and stop complaining. and please dont attack and name call and use sarcasm and blah blah blah. give me evidence for what the republican party has done to help the economy. -just one thing. its seems like conservatives are fighting against themselves. hey, lets see if the moderator will post this one..!

    53. Michael L Mangham De says:

      Comrade Oba-mao must not be re-elected!

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