GREED — and its crafty sibling, speculation — are the designated culprits for the financial crisis. But another, much admired, habit of mind should get its share of the blame: the delusional optimism of mainstream, all-American, positive thinking.
As promoted by Oprah Winfrey, scores of megachurch pastors and an endless flow of self-help best sellers, the idea is to firmly believe that you will get what you want, not only because it will make you feel better to do so, but because “visualizing” something — ardently and with concentration — actually makes it happen. You will be able to pay that adjustable-rate mortgage or, at the other end of the transaction, turn thousands of bad mortgages into giga-profits if only you believe that you can.
Positive thinking is endemic to American culture — from weight loss programs to cancer support groups — and in the last two decades it has put down deep roots in the corporate world as well. Everyone knows that you won’t get a job paying more than $15 an hour unless you’re a “positive person,” and no one becomes a chief executive by issuing warnings of possible disaster.
The tomes in airport bookstores’ business sections warn against “negativity” and advise the reader to be at all times upbeat, optimistic, brimming with confidence. It’s a message companies relentlessly reinforced — treating their white-collar employees to manic motivational speakers and revival-like motivational events, while sending the top guys off to exotic locales to get pumped by the likes of Tony Robbins and other success gurus. Those who failed to get with the program would be subjected to personal “coaching” or shown the door.
The once-sober finance industry was not immune. On their Web sites, motivational speakers proudly list companies like Lehman Brothers and Merrill Lynch among their clients. What’s more, for those at the very top of the corporate hierarchy, all this positive thinking must not have seemed delusional at all. With the rise in executive compensation, bosses could have almost anything they wanted, just by expressing the desire. 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. [...]
When it comes to how we think, “negative” is not the only alternative to “positive.” As the case histories of depressives show, consistent pessimism can be just as baseless and deluded as its opposite. 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.
If you wish to repost my email to Areivim, I could make a public "barukh shekivanti".
ReplyDeleteBut then, I was working in credit management for a large Manhattan bank last summer, so I had a front row seat.
There is a second factor. Not only did the model assume a real estate market that always goes up, and was tested against historical data that therefore seemed to verify the model, it missed a second effect. The whole idea was to bundle together a bunch of things that aren't likely to go under at the same time. However, if enough people trade these product, the elements they bundle get correlated, and they are more likely to fail at the same time. The model's own success made it a self-denying prophecy.
However, as Rav Elchanan said about the Great Depression (hat tip to R' Chaim Brown), when G-d destabilizes long-standing financial institutions, that seem so well-founded we take them for granted, it means something. We can not depend on these institutions and our own investment wisdom. Economic stability only comes from one Source. It would seem that the message of this Elul is bitachon.
-micha