Author Barbara Ehrenreich posed a provocative thesis recently on her blog (a shorter version was also published in the New York Times).  She describes How Positive Thinking Wrecked the Economy.

Greed – and its crafty sibling, speculation – are the designated culprits for the ongoing 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.

What? Whoa - hold up a minute. The ruggedly optimistic spirit of can-do Americanism is wrong? Not just wrong, but led us to the crisis we are in today? Heresy!

If you follow The Secret and practice the law of attraction then you know that even thinking the words financial crisis will not only make it true but will make it worse by attracting more of what your thoughts are creating - crisis. Oprah would not be pleased.

Some believe that the approach to take towards what is happening in the economy is to apply a little tough love. No help for Wall Street or Main Street. Let the chips fall where they may. There will be pain but we will survive. Like the Depression.

Others think that extreme pessimism is the path. Credit is drying up, big business will fail, 401Ks will shrivel into tiny raisins of nothingness, small businesses unable to get credit will shutter their doors and lay off employees, and perhaps worst of all, no car loan for you. Bail, baby, bail.

Political consultants are advising bailout proponents to switch the term to rescue. Listen to the TV talking heads if you dare. The spin is in and the shiny, happy new language is propagating across networks and media as we speak.

Ehrenreich's conclusion argues for a middle path of realism:

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. Now, with our savings, our homes and our livelihoods on the line, we ought to give it a try.

Personally, I think I cycle through the three states. At times I am optimistic that for all our faults, problems, mistakes and folly - the American experiment, still young, remains resilient and we will make our way through. At other times my cynicism about the havoc wreaked by politicians of both parties in cahoots with greedy corporate overlords and the dire straights we as citizens have allowed them to put us in by not exercising our right to provide oversight means that we deserve every ounce of hurt that is coming our way. Neither view, however, is realistic or terribly helpful so I too try to chart a middle path. This is a wake up call that we must all work harder to be involved, to understand the situation, to push our representatives to act in our interest and to prepare to deal with the real consequences of what's ahead.

How about you? Chicken Little, Ostrich or somewhere in between?

Related Reading:

Aisha: On happiness and low expectations

At first I found this idea preposterous. If you don't dream big you won't achieve big! I thought of all the goals I made in life, had I expected not to get them, would I have worked so hard?

Frumpy Haus Frau: Optimism, Pessimism, and Realism in Economic Change

Change IS happening. Much of it is not good. It is not likely to get better any time soon. But that is ok, because I am prepared, and I am confident that I can succeed even in the face of economic hardship. I have a plan for my business that will allow it to go forward regardless. I have a plan for my life that will make me better situated to cope with it. I am not afraid to face challenge head on, because I know I can cope, even if bad things do happen.

I can be happy even if I don’t get what I want.

OTRGIRL at Sojournering: It can't get any worse, said the pessimist.

"No, dear. You're not a realist. If I tell you ten good things and then one bad thing, you only remember the bad thing. That means you're not being realistic, you just weight the bad. That makes you a pessimist."

"Hmm...that's a valid point. I'm a cynical pessimist then!"

BlogHer CE Maria Niles is surprisingly positive at her personal blog Beyond Help and looks at the economy on occasion at PopConsumer