I don't think the "oops" situation will show up early under all circumstances. If it's a situation where we've been before, tasting success and failure, we could sense its symptoms and diagnose early. But if it's a new venture and we are passionate about it, we'll give it a longer rope hoping for the best.
That said, Enron collapse had many dimensions. Not just the non-admission of a mistake or not having the gall to capitulate. The perpetrators walked into it with eyes wide open, perhaps relying on the theory of "greater fool" - that goes there will always be a greater fool to whom you can palm off your bad bets. Had they been lucky, they would've even gotten away with it all - perhaps selling off to a Private Equity fund just like Sam Zell did (with Equity Office Trust) to Blackstone, sensing the madness of subprime early on, and Schwarzman going public and cashing out...
Wouldn't you agree, Eleizer...?
Well said, Bilk. I agree with you in that not many are endowed with the faculties to spot the rot early on and the eventual courage to walk down the road with the blonde cheerleader. Deeper we are mired, harder it gets to come out. I could tangent it to a space travel metaphor. A slew of peripheral factors get built around the `wrong' that becomes the core, to which our existence (including that of our family) gravitates and extrication would call for application of an intense escape velocity, impossible at a time when we are nearly out of gas and don't even have cruising speed. Even if we manage that, somehow, somehow, we'll find ourselves propelled into a space, a new environment that offers neither gravity nor any kind of support to which we’ve grown so much used to, where we just have to stay suspended not knowing where to go... It's this vision of uncertainty that holds us back from abject confession, tempting us to evaluate the cost v. benefit that in the near term will mostly be reclining more towards cost ( that of shame induced fear, the looming prospect of sudden loss of self esteem) than benefit (lightness of conscience, a clean slate, scope for restart) . There is also a grail of hope that there'll-soon-be-a-way-out that tempts us to let our folly will lie buried deep within till we choose to turn the spigot on, at an hour when we have the advantage and to an audience that will laud our triumph than laugh at our misjudgment.
Hope we are one here.