Williams Inference

Economic stress comes in a variety of forms.  The 6 percent unemployment and fear of unemployment create anxiety.  Dwindling retirement benefits are worrisome.  High levels of personal debt contribute to uneasiness.  This was documented in our recent probe, Debt Binge.

There is a hidden cause of anxiety created by financial inequality. An article, “Is Inequality Good for You?”, by Michael Prowse, published in The Financial Times discusses some connections associated with economic inequality and stress:

Richard Wilkinson, a professor at Nottingham University’s medical school, has spent much of the past two decades assembling evidence for a link between economic inequality and sickness.  He concludes that health is influenced by distress caused by unequal income. Economically unequal societies tend to be characterized by big status differences, by big differences in people’s sense of control and by low levels of civic participation.

In market societies, the wealthy regard themselves as “winners.”  They enjoy high social status both in the workplace and at home.  By contrast, people on low and moderate incomes are made to feel like “losers.”  They have no symbols of affluence to flaunt.  They occupy subordinate positions in the workplace and consequently face uncertainty and stress.

Experiments with other primates also appear to support Wilkinson’s concept of stress.  Researchers manipulated the social status of macaque monkeys, while holding diet and other factors constant.  They put high-status monkeys from different troupes together so that some would have to decline in status.  The socially downgraded monkeys were stressed, became ill and died prematurely.

The diversity of incomes in the U.S. produces a social angst that contributes to stress.

Denial

Various forms of economic stress, hidden and obvious, have created a psychological denial. The New York Times reports that a medical secretary in Manhattan, “Thwacked a stack of envelopes marked Templeton Financial, Fidelity and American Express onto his desk and gazed at them as if they were a bad hand in a big-stakes poker game.  ‘I won’t open any of them.  Why deal with bad news?”  While many Americans are financially juggling their finances, many are responding by simply not responding.

Sociologists have considered denial as an essential component of the human survival instinct.  It is a natural reaction.  But, denial also has its downside.  People who avoid confronting bad news, suffer in the long term.

Movies are a good way to escape stress.  They were very popular in the 1930s.  Today, DVDs are selling well, with nostalgic “feel good” movies in demand.  The Zagat Survey Movie Guide presents the top “feel good” movies of all time listed below:

1. The Wizard of Oz
2. Singin’ in the Rain
3. Sound of Music
4. My Fair Lady
5. It’s a Wonderful Life
6. The Sting
7. Mary Poppins
8. E.T. The Extra-Terrestrial
9. Shrek
10. When Harry Met Sally

In television, viewing for Home & Garden Television, or HGTV, is up an astounding 35 percent over last year.  The program directors call it, “Watch the paint dry”:  Their big secret is stress-free shows.  Viewers can watch an elderly woman reconstruct a garden path, a couple select a rug for their living room or a handy man patch the porch of his crumbling Victorian.  On any given night in prime time, about 1 million viewers tune in to HGTV.   And when they tune in, they tend to stick around rather than channel-surf.

Denial is seen in the borrowing habits of Americans–more borrowing in hard times.  In the stock market, there is a lack of selling.  As of July of this year, 401(k) plan members were putting 66 percent of their new contributions in stocks and stock funds–still buying.

Future Reaction

This reaction to economic stress will change.  If economics improve, denial will ameliorate.  If hard times continue, there may be different psychological reactions similar to Elisabeth Kübler-Ross’s stages of dying: denial and isolation, anger, bargaining, depression and acceptance.

In Kübler Ross’s time sequence, anger is next.  There is anger today against Saddam Hussein, the Catholic church and CEOs.  This anger could spread to more targets and intensify.  If hard times persist, the collective mood may shift to depression.  Brokers will hear, “I don’t want to be in the market.  Sell everything.”  Market technicians call this capitulation.  Finally, there is acceptance and a calm.

FOLLOW-UP COROLLARY

 Volume 30 #2 - January 9, 2003

In America, real income has doubled since 1960. We are twice as likely to own cars, air conditioners and clothes dryers, twice as likely to eat out on any given night. Yet, our divorce rate has doubled, teen suicide has tripled and depression has increased tenfold. Stress is real.

A symbol observed accompanying the denial behavior is an abundance of the color purple in retail items ranging from bed spreads to concentrated dish liquid. Purple symbolizes romantic escapism.