The elephant is something that is ever present, and NO ONE wants to mention. IT IS TOO BIG to ignore- yet for whatever reason, no one can say anything.
Without being too politically incorrect- it is exactly that political correctness that the ELEPHANT anology may refer to.
Spending much time in the United States- there are areas that we frequent, where we are the only "WHITE PEOPLE" in a room of dozens, if not hundreds of differently coloured people. So- at that moment WE ARE the elephants in the room. MOST- if not all, would never dare ask WHY ARE WE THERE. Though as recently as last week, my Brother was told, that he should move his car BEFORE NIGHTTIME, as it wouldn't exactly be in his best interest to be there after dark. (Parked about FIVE blocks from YANKEE Stadium in New York.)
A person in a wheelchair may feel the same way. The CHAIR is so obvious, but many, will never dare mention it, or ask anything related to that chair.
In the ENRON situation, NO ONE (financial analyst) dared ask the probing question just exactly HOW ENRON was making all that money.
Everyone was far too happy making obscene profits.
And- when anyone was daring enough to get close to asking just exactly what the advanced booking of expected profits was doing to the bottom line- they were dismissed as not knowledgeable of the BRAVE NEW ECONOMY!
ENRON'S PROFITS did not appear from nowhere- and in the end, the everything collapsed, as the majority of profits were BOGUS.
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According to WIKIPEDIA:
"Elephant in the room"
"The elephant in the room (also elephant in the living room, elephant in the corner, elephant on the dinner table, elephant in the kitchen, and horse in the corner) is an English idiom for an obvious truth that is being ignored or goes unaddressed. It is based on the idea that an elephant in a small room would be impossible to overlook.
It is sometimes used to refer to a question or problem that is obvious, but which is ignored out of embarrassment or taboo. The idiom also implies a value judgment that the issue ought to be discussed openly.
The term is often used to describe an issue that involves a social taboo, such as racism or religion, which everyone understands to be an issue but which no one is willing to admit."