Cosine writes about "Policy Hell" and the sticky nature of policies, the difficulty in pruning an ever growing tree of policy process. I can't help but recognize the applicability of the "What isn't easily measurable, doesn't exist Rule" here. It's not always that people cannot quantify costs, but that their simply unwilling to ever live with a subjective estimation, even if it's clearly right.
Objectivity is great, but sometimes it's just too expensive to obtain. Of course the ironic element here is that much of what makes policies sticky is the unrecognized subjectivity of fear. Maybe the real problem isn't in peoples ability to reason, but a simple emotional imbalance?
I've wondered how much of perceived intelligence is really a reflection of emotional balance or imbalance. Is the poor investor, who sells low and buys high stupid, or are they simply driven by fear and unable to apply what might otherwise be creative and thoughtful analysis if operating in a fear free environment?
Googling around shows there are some thoughts on this topic, "Emotional Intelligence", seems to be a close topic, though more broad then my thought, and apparently a field that has fallen prey, quite ironically to the need to measure everything. The end of the Wikipedia article linked shows echoes of Heisenberg's uncertainty principle, namely that in many cases it may not be possible to take measurements without affecting the condition you are measuring.
But regardless of the missteps, someone is thinking about the topic, which is interesting in itself.