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The Perils of Positive Thinking

Not just greed, but optimism and can-do led to Wall Street's downfall

By Harry Kimball, Newser Staff

Posted Sep 24, 2008 11:39 AM CDT

(Newser) – “Positive thinking,” the philosophy of self-help books and corporate retreats, has had some negative effects on Wall Street, Barbara Ehrenreich writes in the New York Times. It's popular to blame greed of executives and traders for the current meltdown in the financial markets, but the unbridled optimism and unwillingness to even think bad thoughts espoused by motivational speakers has to have contributed to this predicament, she argues.

Positive thinking “is endemic to American culture,” Ehrenreich writes, and in recent years bonuses and executive compensation have made Wall Street a hotbed of confidence. “No one was psychologically prepared for hard times when they hit, because, according to the tenets of positive thinking, even to think of trouble is to bring it on.” The crushing guilt of the Protestant work ethic isn’t the answer, either, she notes, but there must be a middle ground.

[Images (5)]

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A specialist on the floor. (AP Photo)

Traders on the floor of the New York Stock Exchange. (AP Photo)

Bear Stearns Cos. Inc. chief executive James E. "Jimmy" Cayne. (AP Photo)

Security Exchange Commission Chairman Christopher Cox. (AP Photo)

Bank of America President and Chief Executive Officer Kenneth D. Lewis. (AP Photo)

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When it comes to how we think, “negative” is not the only alternative to “positive.” The alternative to both is realism — seeing the risks, having the courage to bear bad news and being prepared for famine as well as plenty. We ought to give it a try.

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The Perils of Positive Thinking