The Psychic Toll of the Great Recession

October 4th, 2010

By Dr. Jim Taylor

Of course I’m concerned about the financial well-being of our citizens. Every layoff and foreclosure hurts not only individuals and their families, but also the over-all health of our economy. But, given my Ph.D. in Psychology, I’m also deeply concerned about the impact of the Great Recession on the individual psyches of Americans who strain under its weight and the collective zeitgeist that the financial crisis may spawn in the coming years.

There is little doubt that financial struggles and uncertainty take a significant toll on people. They must confront the daily stress that comes from being unable to make ends meet with few prospects for the immediate future. This stress isn’t just psychological, but can also exact real physical costs in terms of poor sleep and diet, increased illness and injury, and, even worse, alcohol and drug abuse as a means of coping with the stress.

There is the flood of emotions that can drown people who are struggling to keep their heads above water. Fear of an uncertain or disastrous future can paralyze people. For those who are underemployed, there is the frustration of being willing to do what it takes if they would only be given the opportunity. Those who feel helpless in the face of financial ruin succumb to despair. For the breadwinners who can’t support their families, there is the shame in what they perceive to be their failure. And, as we have seen with the rise of the Tea Party, there is a growing anger directed at our government for its inability to plug the holes in what many feel is a sinking ship on which they are passengers. And, like on the Titanic, only the well-to-do have life preservers and access to the life boats.

With each day of unemployment, people’s belief in themselves atrophies, causing them to question how capable they are of surmounting this immense hurdle. Their faith in the ability of the economy to recover is also shaken. And, of course, their trust in our government is lost as well. The result is a crisis of confidence that engulfs them and saps their motivation and energy to continue to fight against an adversary that seems too big and too strong.

The toll on marriages and families is also immense. Research has shown that financial problems are the most significant source of stress and conflict in marriages. What about the children who can’t understand why daddy or mommy don’t go to work anymore, see their parents fighting so much, and aren’t able to buy things they want or need. And what about the increasingly common scenario of families who lose their homes to foreclosure and, even worse, are forced into homeless shelters that are, more and more, being populated by formerly middle-class families. At a time in their lives when security and consistency are essential for healthy development, many children are the hidden and most harmed victims of the financial crisis.

The American Dream, which has driven our country to such economic heights by providing the impetus for people to work hard, sacrifice, and persevere, is under direct attack. This perfect storm on the psyches of the American workforce — unemployment, threat of bankruptcy and foreclosure, rising health-care costs, a moneyed class with no shame, and a government that seems both feckless and uncaring — has the potential cumulative effect of crushing the American spirit that is regarded by the world as indomitable.

What are the long-term ramifications of the Great Recession on American workers’ psyches and the American spirit? Even if we do emerge from the recession relatively soon, will there be lasting damage to the American psyche, just as there will likely be continuing damage to our economy? Could the American workforce suffer from Post-Traumatic Stress Disorder (PTSD), just as many of our soldiers have, with its effects lingering for years to come? Will we lose faith in the American Dream and, as a result, stop striving for a goal that we no longer believe is attainable? Or, when the economy shows signs of recovery and we see the light at the end of the tunnel (and are sure it’s not an oncoming train), will we get our individual and collective mojo back and put the train back in high gear rolling down the tracks?

America has certainly faced worse — the Great Depression — and rose like a phoenix out of the ashes. But it took strong leadership, the New Deal, World War II, and a sense of national purpose and sacrifice to turn our economy around.

Will we be able to do it again? I hope so, but I must admit that I’m not completely confident. Times — and America — have changed. Yes, we are fighting two wars now, but neither Al Qaeda nor the Taliban are Hitler and Hirohito, and most Americans feel little connection to the conflicts. Despite high expectations, President Obama’s leadership has been inconsistent at best. And, sadly, the only people being asked to sacrifice are our soldiers and their families. Our expectations have risen considerably too; “a chicken in every pot and a car in every garage” (no, Herbert Hoover didn’t actually say that) seems downright quaint in this aspirational era of bigger is better and keeping up with the Joneses. Perhaps we’ve gotten a bit too comfortable in our prosperity, a bit soft around the midsection. Do we still have the fire in our bellies and the fight in us?

As the saying goes, only time will tell. But I think it’s safe to say that it will be many years before the American psyche and economy recover fully from the Great Recession.

(This article was also posted at Dr. Jim Taylor’s Blog.)

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One Response to “The Psychic Toll of the Great Recession”

  1. Tom Carter |

    I don’t know if it would be considered PTSD, but there are still old folks around who are traumatized from the Great Depression, and it’s obvious in their worldview today. This kind of reaction is hard to understand if you’re not one of the victims who lost a job, pension, home, savings, and maybe much more because of a severe economic downturn.

    Many economists and historians now think that we came out of the Great Depression not because of but despite most of the New Deal. Had it not been for WWII, we might not have come out of it for many more years. Since it’s not likely that we’re going to experience another full-stress, totally uniting experience like that war, it might take a very long recovery.

    I’m not a dedicated free-marketeer by any means, but I really think we should get government less involved in business and the economy and let natural forces work. Some will hurt, but many others will benefit. It’s been recently said, pretty authoritatively, that the recession ended and recovery began in June 2009 — before much of the stimulus money had been spent and before the various government take-overs. Seems there’s a lesson in that….

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