There are two kinds of denial. The traditional kind involves a conscious lie, as when a husband denies he slept with another woman, or the CIA denies it funded a coup. We expect this kind of denial. It is as old as the world.
The other, modern kind of denial was first popularized as a symptom of alcoholism. It manifests as a willful negation of reality motivated by an overwhelming desire for something that is true to not be true. Elizabeth Kubler-Ross borrowed this concept of denial when discussing the stages the terminally ill go through when grappling with the inevitability of death.
Denial can be a good or at least necessary thing, if it's part of a process that leads to acceptance. It can also be extremely dangerous. Hundreds of thousands may have been saved had the news of what was going on in the concentration camps not been met with the insistent disbelief of denial.
Modern denial goes hand in hand with magical thinking. Reagan catered to this expertly. A willingness to believe in supply-side economics, with its miraculous formula of cutting taxes to increase revenues, married magical thinking with a denial of Jimmy Carter's sober assessment of reality. As skillful as he was, though, Reagan and his trickle-down conspirators were rank amateurs compared to the willful ideologues of the Bush-Cheney regime.
Now we have Sarah Palin, Glenn Beck et al. Denying inconvenient truths has morphed into an upside-down world where facts are considered subjective perceptions. Dinosaurs roamed with Adam and Eve because we want to believe they did, dammit. Global warming is a hoax because we can't handle what it would mean if it were real. The environmental damage of an oil spill will be "modest" because we really, really, really want it to be modest. The desire for certain things to be true has assumed the status of truth itself.
"Facts are stubborn things," famously said Reagan. Even a broken clock is right twice a day. A huge swath of this country, fed by the right-wing noise machine, has found the solution to facts. Ignore them. Create your own alternative set. Decide to believe these neo-facts with enough vigor and they will become as good as the real thing.
Those of us in the reality-based community are confronted with a new paradigm; an opposition that has decided that what they need to believe determines what is true, not that what is true determines what they believe. In the face of this, we have to accept that reasoning with them is pointless. Rational arguments are about as effective against the new right as reading The Big Book to an alcoholic who's had 6 margaritas. Even Bill Wilson wouldn't bother.
It is tempting to throw up one's hands in despair in the face of such irrationality -- I do it on a regular basis myself. But we can also learn from it. FDR, for example, did a masterful job of harnessing popular anger to advance his political agenda. No less cerebral and far more patrician than Obama, he readily expressed contempt and even disgust at the monied interests that blocked change. He did not resist the subjectivity of emotion, he engaged it.
The same popular anger is bubbling up not just against BP, but against the raging power of multinational corporations that Americans are slowly starting to understand constitute a shadow world government of sorts. Like FDR, Obama needs to harness that anger, even if it means losing his cool. That might mean a little denial of his own, in the sense of temporarily pretending to himself that he is not the President. Whatever he needs to do so we feel the emotion of Obama the man -- and more importantly, so does he.