Remember when you were a kid, lying in bed, listening to scary sounds that seemed to be coming from the closet or somewhere in the dark recesses of your room? Do you recall thinking “Just don’t look.” You didn’t want to find a monster lurking in the shadows and hoped  you would fall asleep before anything bad happened.  Of course there were no scary monsters in the closet. You know now that you wouldn’t have found them even if you looked.

It is time for leaders to start looking closely because there are real threats that won’t go away after they fall asleep.

I rarely make predictions, but I’m pretty confident of this one: someday, we’ll look back at this period of time and realize that with the demise of Bear Stearns, the sub-prime debacle, the Feds intervention in ways never done before and the myriad problems entangled, we’ll realize how close we were to the cataclysmic economic-meltdown that financial advisers referred to when they used phrases like  “…of course if that happens, then all bets are off.”

History usually becomes the great clarifier, and there is little value skill involved in looking backwards and understanding what happened. The problem today is that leaders in the financial services sector, government and business in general saw the writing on the wall. Even semi-knowledgeable investors heard the sounds coming from the closet–and decided not to look.

Why? The reasons are many, beginning with denial, greed and even unfounded optimism. Not many students want to tell the teacher he or she can’t teach even though every student knows it. So managers and leaders in the current economic mess all sat quietly at their desks for their hands folded.

Despite my degree in economics, I’m not writing to suggest any solution to the current economic crisis. I just want leaders of every ilk wherever they might be on the planet today to remember this: it is time to start looking at the scary stuff. Denial isn’t a strategy. Following the popular course doesn’t make you a leader. And if you aren’t willing to deal with what you see when you start looking a little closer–and I know this sounds harsh–maybe you aren’t the leader you thought you were.

Clinton and Obama are focusing on healthcare coverage, and it is an important subject. But if you want to look at something scary, start pondering the numbers related to Medicare, Medicaid and Social Security. Those monsters are banging around in the closet with reckless abandon, but I’m not seeing many U.S. politicians willing to take a look, probably because they know what they’ll find.

Social and cultural crisis are rarely a surprise. They usually show up on radar far in advance and start steadily pulsating and growing. They get noticed, but since they’re not big enough to make headlines, they get ignnored. That is, of course, until they’re somewhere between significant and cataclysmic in size.

If you lead, or aspire to lead, start looking more closely at the problems on your radar. You might have to sell and cajole to get others focused on what you’re seeing, but that’s part of the challenge of leadership. Deal with those issues, organizationally and otherwise, before they end up as headlines that use words like “catastrophe” or “meltdown.”