Economic PTSD: The Psychological Effects of the Recession

Having recently lost 40 percent of my own retirement savings, it's not hard to empathize with others in the same boat, including their feelings of helplessness, rage, guilt and shame.

Empathy for oneself and others is necessary but not sufficient. The antidote to helplessness begins with compassion and acceptance, but it doesn't end there. It involves grief but can't rest there. We need psychological healing but not apart from healing the world.

Outrage is part of the healing that we need. But our public outrage at being betrayed by the greed, mismanagement and political shenanigans that created the current crisis is compromised by all the subtle and secret ways that we avoid confronting painful feelings of helplessness and, instead, irrationally hold ourselves accountable.

This creates a political problem: While the helplessness we feel is legitimate, our ability to rationally respond to it by trying to correct its real structural causes is compromised by the guilt and shame that we've internalized.

Our real responsibility to change the world -- something we can do -- is undermined by the false and self-blaming feelings of responsibility for things that we didn't and can't do. The paradox is that we have to face the ways that we're really helpless in order to own the ways that we're not.

What is the alternative? The alternative to irrational guilt is real innocence. The alternative to denial is grief. And the solution to helplessness is to get angry and fight back.

The problem for progressives is psychological as well as practical. Like everyone else, we struggle with passivity, cynicism and confusion about how to effect change in the current climate.

Some of us are waiting on the sidelines to see what Obama will do, criticizing or celebrating his choice of advisers. Others are actively organizing and participating in various efforts to influence political outcomes. But most of us, I believe, are facing the difficulty of maintaining and building on the hope and passion generated over the last year in the presidential campaign.

In my view, our capacity and energy for political engagement is sapped by hidden psychological reactions to the current economic catastrophe, reactions complicated by feelings of guilt, responsibility and helplessness.

We feel responsible for things we didn't do and helpless in the face of things we could do. We feel guilty when we should feel innocent, cynical when we should feel hopeful and powerless when we should feel powerful. Understanding and resolving this confusion should help progressives enormously.

Everyone processes economic stress and anxiety differently. For every rational response to this recession, there is an irrational one -- one that derives less from objective circumstances and more from the peculiarities of the human psyche. Such peculiarities are no less unreasonable because they are common. Irrational feelings of envy, self-blame and denial rear their ugly heads in many of us, often with painful results. I see them in myself. I see them in friends. And I see them in my clients.

Self-blame is one of the most insidious and common of these reactions. It's not that we blame ourselves for failing to anticipate the exact moment when the stock market began to collapse, although some do. Most of us are too rational to openly fault ourselves for not being that omniscient.

Instead, the self-blaming is subtler and starts a little later in the time-line, e.g., I should have moved everything to cash when it first happened, or I was in denial and now I'm paying for it, or So-and-So predicted that the bottom was falling out, and I just didn't listen.

Sometimes, such guilt is spiced up with a dash of envy: My neighbor just sold his house and was sitting on the profits waiting to buy another one -- the lucky bastard. Or, my brother-in-law saw this coming and moved to the sidelines a year ago, or even, from one patient, my best friend consulted a psychic last spring who convinced her to get completely out of the stock market!

Such stories, real and apocryphal, invariably provoke twinges of envy and self-criticism. Their good fortune highlights our failure. Often, such self-castigation continues right up to the present: I should probably get out now, but am afraid I'll miss the recovery. The implied judgment here is "fool me once, shame on you; fool me twice, shame on me." Whatever the facts of the matter (even the savviest of investors are not sure what to do at the moment), the underlying sentiment involves blaming oneself for some mistake, failure of nerve, intelligence or judgment.

In fact, while individuals here and there may have outguessed the markets, most of us didn't. And when "most of us" find ourselves in a similar predicament, that predicament can't possibly be an individual problem or be reasonably solved by individuals making smarter or more rational decisions.

When the dot-com bubble burst in the spring of 2000, many of my patients blamed themselves for being too greedy, or for going against their common sense by listening too much to their brokers, or for going along with the herd even though they knew better.

The fact that millions of people were saying the exact same thing didn't mitigate the painful feelings of responsibility and guilt that they had then, and such facts don't seem to alter similar feelings today. People feel a deep need, almost a compulsion, to take on individual responsibility for their lot in life, despite oceans of evidence that they're victims of forces they cannot individually control. And every story of someone who beat the odds, bet against the market, or escaped unscathed just serves to reinforce this self-blaming tendency.

If there's one thing I've learned from my work over 30 years with people who have been hurt or traumatized, it's this: Human beings can't tolerate helplessness. When we're helpless, we feel an unconscious need to spin a story about it, a story in which we somehow had choices or one in which our suffering had some transcendent meaning.

One of my patients lost everything in the 1989 Loma Prieta earthquake. Even though she had retrofitted her house in exactly the same casual way as her neighbors, she criticized herself for not hiring a top-flight structural engineer to insure that the retrofit was state-of-the-art.

Another patient dealt with feelings of loss about finally leaving her abusive boyfriend of seven years by feeling guilty that she hadn't given him enough "chances." Abused children routinely blame themselves for their parents' neglect and violence. In each of these cases, we see someone who can't feel cleanly and simply victimized, who can't feel helpless and who certainly cannot feel innocent.

Innocence and helplessness are intertwined in our psyches. After all, if we're truly helpless, we should feel innocent and not guilty. If we can't really control a situation, then we can't be responsible for its outcome. But since our psyches can't tolerate facing helplessness, then we will also have a problem feeling innocent. For example, when people are given a chance to talk at length about financial losses over which they had no control, there is usually more than a trace of guilt.

Recently, I've had the opportunity to listen to people who were swindled by Bernard Madoff blame themselves for having trusted him. Their outrage and despair is contaminated by an irrational guilt, irrational because while they might have been legally responsible for their investment, it was obviously not a "choice" in the sense for which they blame themselves. Madoff had impeccable credentials and came highly recommended by all the "experts."

It would be like women in the 1950s blaming themselves for babies born with birth defects because they took the Thalidomide prescribed by their doctors for morning sickness. Choice, responsibility and guilt would hardly be reasonable considerations here, and yet, we all know that this is exactly what many of these women felt then, and it's what victimized shareholders privately feel now. We have a difficult time feeling innocent and helpless. 

Why is this? Well, we certainly have a culture that idealizes individual responsibility, that idealizes the "self-made man" who succeeds despite all obstacles. Despite abundant evidence demonstrating the near-impossibility of overcoming the combined constraints of social class, education, early child-rearing, cultural norms and even chance, it's almost impossible to shake off the notion that we live in a meritocracy that rewards the worthy. Because some people overcome the odds, just like some people anticipated this recession, there can be no innocent victims here. Since everybody in the same situation doesn't fail, then failure has to be an individual matter.

Or perhaps there is something quintessentially human about free choice -- namely, that even in the harshest and most constrained of environments, we are compelled to believe we're free, that we have choices, that, we believe, with philosopher Jean-Paul Sartre, that "freedom is what you do with what's been done to you." Perhaps I can't control my external environment, but I can control how I feel about it.

Thus, despite being objectively helpless, whether in the face of a stock market crash or an economic recession, a natural disaster or the gross injustice of other people, we will always believe that there's something we could have done about it then or can do about it now, and blame ourselves if such reactions are absent.

A deeper and, in my view, more important source of the difficulty most people have feeling helpless and innocent lies in the psychology of childhood. The psychoanalyst W.R.D. Fairbairn once said, "Children would rather be sinners in heaven than saints in hell." What he meant was that children would prefer to believe that they come from a just and good family in which they were bad than an unjust or bad family in which they were good.

For this reason, abused children often report that they provoked their parents' violence, and adults often qualify accounts of their own early beatings with the caveat that they were "difficult" children.

Most people can't let themselves feel innocent, because in a truly moral universe their caregivers would then have to be guilty, and that recognition is intolerable. It would mean that they, as children, were not protected, that the attachment necessary to their psychological survival was absent, disturbed or even dangerous, and that the beings upon whom they helplessly depended might, at times, have meant harm.

Children can rarely face this emotional reality, and neither can most adults. It is not even necessary that these perceptions be objectively true -- it is the subjective experience of parental failures that is so frightening, it leads to self-blaming.

I think that the residue of this childhood denial can be found in the last-ditch psychic efforts of many of the people I know and treat to continue to believe in the goodness of our political and financial institutions. Our public outrage at being betrayed by the greed, mismanagement and political shenanigans that created the current crisis is compromised by all the subtle and secret ways that we irrationally hold ourselves accountable.

This creates a political problem: While the helplessness we feel is legitimate, our ability to rationally respond to it by trying to correct its real structural causes is compromised by the guilt and shame that we've internalized. Our real responsibility to change the world -- something we can do -- is undermined by our false and self-blaming feelings of responsibility for things that we didn't and can't do.

To say the obvious: We're not children objectively helpless in the face of overwhelming parental authority. The system has been rigged against us, but it doesn't have to be. Our culpability is not in having trusted this system, but in not seeing that -- unlike children in a family -- we currently have the freedom to change it. The paradox is that we have to face the ways that we're really helpless in order to own the ways that we're not.

The argument that most of us irrationally resist feeling helpless and innocent may seem spurious given how often we hear parents, teachers, pundits and politicians extol the importance of personal responsibility. And isn't it true that too many, not too few, people seem to blame others constantly for their own problems? How can I argue that people suffer from an inability to feel helpless and innocent rather than an inability to take responsibility?

Here's why: Public displays of innocence are almost always defenses against private feelings of self-blame. In both my personal and clinical experience, the louder someone proclaims his or her victimization, the more guilty that person is liable to feel underneath. The reason is simple: guilt and self-blame are too painful for most people to consciously tolerate for too long. They're compelled to externalize it, vainly trying to convince themselves and others that they're innocent victims and that everyone else is to blame for their predicament.

Such folks -- and there are many -- appear to wrap themselves in the flag of helpless and blameless innocence. Secretly, however, they feel guilty. This system isn't stable because it rests on a foundation of guilt and its denial, and thus the cycle of blame and guilt goes on endlessly.

Most of us are, in fact, helpless and innocent victims of the breakdown of an economic system rigged to benefit the rich. However much we might have, at times, followed our worst instincts when it came to spending, debt and investments, we are not to blame for our current predicament.

We need to develop compassion for ourselves and each other. We need to mourn the loss of our money and the financial dreams that they fueled. This is not to say that we won't recover some of our losses or shouldn't have dreams, but we can't turn back the clock and pretend that this catastrophe hasn't happened.

Thus, like mourning the death of a loved one, we have to come to terms with a new reality in a way that allows us to experience a range of normal reactions, reactions we can openly share with others rather than hide in the closet as if they were private failures and sources of shame. I have too many patients and friends who are ashamed of talking about their financial losses for fear of being judged. Shame makes loss and trauma indigestible.

And, finally, we have to get angry, get organized and empower ourselves to change a system over which we have had too little control. It is -- and should be -- infuriating that economic elites, along with their political enablers, have gamed the system such that they've reaped astronomical benefits while exposing the rest of us to the toxic byproducts of their greed and indifference.


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