There is this anecdote about the Battle of Britain (if you slept through history class, this was largely an air operation). After every mission, the planes that came back would be inspected for bullet holes and subsequently repaired and strengthened in the areas that were hit. Makes sense, right? It did, until someone pointed out that the ground crews should be more concerned with the areas of the planes that did NOT have holes in them: the planes that were hit there simply never made it back... This is a fine example of counter-intuitive thinking.
As a country "we need":
(1) A "jobs" bill: no, we do not. It is scary, arrogant and delusional to think that "jobs" can be created by decree. Central planning has failed over and over again but apparently this is beyond the comprehension of many of our elected representatives. The government should ensure that there is a fertile soil, and let the collective efforts of the market participants decide what the next growth industries would be. What would have happened if Congress, years ago, had decided to protect jobs in the horse and buggy, abacus, whale oil, vinyl record and candle industries?
(2) A healthcare reform bill that expands "access": no, we do not. There is no problem with access: there are no waiting lists, that I know of. The problem is cost. Cost=price. This means that there are issues with supply and demand. The thing that passed does nothing to increase supply, and does nothing to decrease demand (not even the simplest things, such as a minimum mandatory out-of-pocket copays for any office visit, a cap on malpractice liability and transparent pricing). Oh, and don't forget, it uses 10 years of taxation for 6 years of spending to be "neutral". It would be laughable if it these clowns (one thinks that Guam will capsize if there is more US troops there) were not in a position of real power.
(3) To encourage consumer spending to "help" the economy: no, we do not. Higher consumption (along with higher taxation) hinder capital accumulation. Having more capital is a good thing, not a bad thing. An added bonus, the joy coming from an acquired object drops very quickly post-acquisition, we just get used to having the object, and we lose the option of spending the money on something else.
(4) To keep zero interest rates to "help" the economy: no, we don't. Everyone loves free money, but this discourages savings. The rebound in banking profits is simply the expropriation of value by the banks from the savers. Greenspan waited for way too long to raise rates in the '00s, and it surely seems to me that Zimbabwe Ben is repeating the same mistake. ZIRP, the last time around, also had other undesirable effects, such as high housing inflation in select markets and the now-infamous "reach for yield."
(5) To increase government spending to "help" the economy: no, we don't. To begin with, the government must take the money from its rightful owner, the earner, via taxation. I am not sure that bureaucrats spending other people's money can make better spending decisions vs. people who spend their own hard-earned money. Second, since we have a huge budget deficit, the increase in spending has to be borrowed. When you add the shocking lack of political will to do a real entitlement reform, we are creating "path dependent outcomes". Simply put, the financial mismanagement of the last and the present administrations has cut the number of options that will be available in the future.
(6) To subsidize "green energy": no, we don't. If a certain technology is not ready for the market, then may be it should not be in the market. Last time I checked, there were no rebates for people buying iPhone apps because it is such a cool new efficient technology, and, yet, there were billions downloaded. Why? Because it makes sense to download apps that make you more productive (for example). The sad truth is that neither solar nor wind can have utility-level reliability. Further, with 50% of the current energy coming from coal, that electric plug-in is not the zero-emission vehicle it is sold as. Finally, with solar panel and car battery efficiency dropping with age, exactly what are the recycling implication? Or there will be a "hybrid car battery recycling tax" levied on all drivers that dare not to buy a Prius (on top of the tax subsidy for purchase)?
(7) To pass "cap and trade" legislation: no, we don't. The man-made global warming has been exposed as the single largest science fraud of our times. Further, carbon dioxide is an essential part of the carbon cycle, this is the cycle of life. The creation of a "carbon credit" to trade is simply a transfer of value from the productive segments of society to the financier class. Personally, I am all for fuel efficiency and mass transit: a driving commute is largely unproductive time from an economic perspective, but personal views are not necessarily a good starting point for a larger policy.
(8) To help stem the foreclosure tide: no, we don't. If anything, foreclosures should be accelerated. Instead of throwing good money after bad, the government should cut its support of the housing market. This way the speculators will get flushed out, and the prudent participants will be rewarded. Further, as the market finds its ground, this will, shockingly, spur more investment. Finally, more foreclosures will actually enable the home-borrowers (not "owners" btw) to move to where the jobs are: the mobility of the US labor force has been severely constrained over the last two years because of the real estate problems.
(9) To pass comprehensive financial reforms legislation: no, we don't. I can see something dealing with the Too Big to Fail problem, but outside of that, we need actual enforcement of existing regulations (instead we have SEC staffers surfing porn all day, and getting reassigned, not fired!). To wit, the costliest problems have come from institutions that were already heavily regulated and, on top, were dealing with heavily regulated products, such as mortgages. The biggest blow-ups (Lehman, Bear, Merrill, Fannie, Freddie, AIG, Ambac+friends, Countrywide+friends) have led to virtually no persecutions or convictions: normally "professionals" are held to certain standards, and doctors/lawyers/dentists/architects are sued if they fail to meet them. I do not see the equivalent level of responsibility with financial "professionals" at all levels, from Frauddy N. Komish, a mortgage broker, to Trancheè M. Bonusky, the guy who knowingly stuffed the MBS with garbage, to Mr. Bonusky's bosses, who were in on the 'bezzle and then some (i.e. the repo 105 crowd).
So, there it is, 9 areas that can benefit, in my humble view, from a counter-intuitive look that goes beyond the knee-jerk, soundbite non-logic that seems to dominate. Criticism and your own examples are always welcome.
(PLUG: the author of Barbarian Capital blog is available for the right consumer- or inflation-focused analyst opportunity within the US)