Don't be happy. Worry

Did too much optimism get Wall Street in trouble?


Andrew Leonard
February 20, 2008 1:27AM (UTC)

Is there a case to be made for more dourness on the part of corporate executives? In "The Dark Side of Optimism: Why looking on the bright side keeps us from thinking critically," management consultant Susan Webber argues yes. In her view, "the financial and business communities dismissed all the warnings" about the housing meltdown/credit crunch bearing down upon them because they wilfully adhered to an always-sunny-side-up view of life. As a corrective: We need more negativity! (Thanks to Naked Capitalism for the link.)

How the World Works agrees: "Finding the right balance between healthy optimism and delusion is harder than one might imagine, for both individuals and institutions," and "It's simply easier to put on blinkers and believe everything will work out than to confront the complexities of modern life." Absolutely!

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But where we really took notice was in her invocation of the 18th century British writer Samuel Johnson. "Human existence," writes Webber, "to paraphrase the Samuel Johnson adage, is the victory of hope over experience."

(Before we get all excited about Johnson's apparent Nostradamian ability to predict the outcome of the U.S. Democratic primary battle between Barack "hope" Obama and Hillary "experience" Clinton, it's worth noting that the real target of Johnson's aphorism was a second marriage, not human existence. Then again, given Hillary Clinton's previous residence in the White House, a triumph for her might indeed constitute a second betrothal for the American people, which mightily confuses the metaphor. But we digress.)

There's nothing particularly wrong with Webber's thesis that corporate executives should be more proactive about identifying looming crises and heading them off. A little less Norman Vincent Peale and a little more Eeyore might be good for the culture, all things considered. But run amok positive thinking is not what got Wall Street into trouble. The real problem: unbridled greed, unmitigated by government oversight.

And this is where the hope versus experience dynamic is most relevant. Wall Street can be counted upon to act in its own short-term interest, whether or not clear signs of trouble are brewing. That's how the system is set up. This isn't unjustifiable optimism -- it's called getting what you can while the getting is good. Government's job should be to watch out for trouble, to apply the corrective that experience tells us is necessary when the business cycle is headed for a downturn, or some sector of the economy has gotten out of whack. We need our government to confront the complexities of modern life, not our business leaders.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Related Topics ------------------------------------------

Globalization How The World Works U.s. Economy




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