From "The Dark Side of Optimism"

Took this from Naked Capitalism. The quote captures the essence of the pitfalls surrounding the optimistic proclivities within our industry.

Is Optimism All It's Cracked Up to Be?

Americans are a profoundly optimistic people. While it's part of the national mythology that it makes us resilient, it comes with a price. As Susan Webber noted in "The Dark Side of Optimism":

Overly positive thinking is difficult to reconcile with the need to make realistic, objective assessments. Finding the right balance between healthy optimism and delusion is harder than one might imagine, for both individuals and institutions.

And despite years—decades—of sobering examples, we don’t seem to be any closer to that balance. The recent recklessness
of residential and commercial real-estate lending was in plain view, and a vocal minority wrote about it. But the financial and business communities dismissed all the warnings, insisting that any damage—should it ever arrive—would be contained to the subprime sector. The folly was obvious: Even if decision-makers had deemed the grim forecasts to be of low probability, the potential outcomes were so dire that they demanded contingency plans...

We acknowledge these problems and their seriousness—and then put them out of mind. Instead of treating worrisome developments as new information and looking dispassionately at the risks, we tend to avoid working through downside scenarios because they are upsetting. It’s simply easier to put on blinkers and believe everything will work out than to confront the complexities of modern life.

“Negativity,” an awkward coinage, has widely come to be used pejoratively. Magical thinking, too, has become increasingly
popular as a way to gain the illusion of control in an uncertain world. Rhonda Byrne’s motivational best-seller The Secret, for example, basically says that you get what you wish for. If you don’t have the things you want, it means you don’t have enough faith. In this construct, neither insufficient effort nor bad luck plays a role.....

The end result is a bias against critical thinking. It’s hard enough, in the delicate social web of most organizations, to question the merits of any given proposal offered in good faith. But now decision-makers stagger under the weight of larger social trends and management fads that favor belief and force of personality over dispassionate analysis. Detached, rigorous thinking simply doesn’t fit any of our cultural models.