“Wishful thinking” should not be used to make unforgivable dumb thinking more socially acceptable.

Sir, Tim Harford discusses several experiments on how wishful thinking can influence the outcome. In most of these the sufferer of wishful thinking consequences is the wishful thinking himself. But, when Harford mentions: “Perhaps a belligerent politician or union leader would find his or her position strengthened by a strike. A general might desire a war. Lawyers might profit from urging their clients to go to court.” he is clearly referring to bad wishful thinking, “When wishful thinking becomes wasteful”, November 7.

So let me ask? How wishful was it not of regulators to think that by interfering with some capital requirements based on credit risk they could stop banks from failing without distorting the allocation of bank credit to the real economy? Or, if it was not wishful thinking, was it pure dumb unforgivably irresponsible thinking?

How wishful was it not of regulators to think that they did not need to look back at history to see what caused bank crises because it sufficed to look at the ex ante perceived credit risk of the assets? Or, if it was not wishful thinking, was it pure dumb unforgivably irresponsible thinking?

How wishful was it not for regulators to think they could empower some very few human fallible credit rating agencies, to decide how much capital banks needed to hold, and that these were not going to be captured? Or, if it was not wishful thinking, was it pure dumb unforgivably irresponsible thinking?

Whenever the concept of wishful thinking might be used to sort of make unpardonable dumb thinking more socially acceptable, I have a problem with it.  

@PerKurowski ©