"This is just a dream." Or, "Any second now a Harrier jump-jet will pull up a few feet away and throw me a rope." That kind of thing.
Magical thinking is like wishful thinking on steroids: Where people who indulge in wishful thinking know reality from their pleasant fantasy, those gripped by magical thinking really believe the fantasies they create.
They must, because the alternative is too scary for them to contemplate.
While magical thinking certainly gives the person in extremis some relief, it doesn't change reality one iota. And that's usually a problem--if not for the person who's effectively checked out of reality, certainly for those in the back of the plane who weren't ready to go just yet.
It seems likely that narcissists ("it's all about me") are far more inclined to magical thinking than other people, because they've spent their lives being the Decision Makers, the controllers, the Beautiful People who seem to run society and politics. Thus when disaster looms, they surely must know on some level that their own decisions had either set the fatal situation in motion or else that they'd failed to recognize and avoid the crisis.
From my limited experience with humans, that would make them way more inclined to do the Magical Thinking bit: "Everything's fine. And if some of you are having problems, it must be your own fault because it can't possibly be due to any decision I made. I had nothing to do with it!"
Of course it's impossible to know whether a politician's refusal to take responsibility springs from Magical Thinking or merely a desire to fool the peasants one more time.
Example: "Baghdad Bob," Saddam's PR guy, who smiled as he denied to the cameras that American troops were in Baghdad.
Gaddafi: I am in control, and any problems y'all are having are due solely to the fact that zionists are slipping drugs into your kids' milk. Or something.
Bawney Fwank: There is no pwobwem in the mortgage industwy. Everything is perfectly sound.
Government-employee's-union bosses: We won't let you trim our pensions--95% paid for by taxpayers--or make us pay an eighth of the cost of our medical care, because...it's just not FAIR! And people who claim the state can't afford to carry on as before are just LYING! Besides, the state could just cut somewhere else ...like, road maintenance or something.
Expect to see many more examples of Magical Thinking as things get worse--as they must with Obozo in the White House and the Dems in control of the senate.