Right or Wrong?

We had two economists in the office today talking about the economic conditions, financial system, and the impact of our governmental policies. One of the economists is from the large investment banks who looks like Tim Geithner, the other economist has his own firm and has written quite a few academic papers and text books. Although the presentation styles and reasoning were vastly different, I enjoyed both presentations and agreed with their final conclusions that the economy and the market will get worse before they get better... Since the presentations happened on the same day, it's not hard to see that these economists had similar data, they drew different conclusions from their point of view, but agreed that there is still a long road ahead of us before the economy is on its way to recovery. Most of their arguments were reasonable, well supported, and convincing, but is what they are presenting, the reality?

The irony of working in this industry is that the reality is not THAT important. What is important is formulating a theory that you can back-up, collect data that you can interpret, and convince others that you have the right theory (if they don't believe you, show them the data!) When others agree with you, or better - when the market agrees with you, then you have manufactured not just alpha, but reality. It doesn't matter what the 'reality' was going to be, you can create your own if you can exert enough influence.

For example, if the banks are too big to fail, why do we make them bigger? If leverage is the problem, why do we encourage more borrowing? I know what should be the answer because I work in the industry, but common sense in this case just doesn't seem to matter... These questions made me think whether I can make a "right" decision and be wrong because the reality belongs to the majority, or if I can make a "wrong" decision and be right for incorrect reasons? If so, why are we so hung up on being right or being wrong when reality itself is a creation of mankind?