Second Best

What the people in the White House economics team should be thinking about is the fact that they're operating in what economists term a second best world. In a first best world you'd have a bunch of optimal policies, but if some of the conditions or policies are suboptimal because, say, John Boehner's House won't enact any good policies, then you have to readjust the remaining policies. The point is that, for example, maybe a massive writing down of all Fannie and Freddie owned mortages isn't an optimal policy if we were in a first best world. But we aren't and we aren't going to be. So it might be a second best optimal policy.