Edited by Gregory Bartolomei
Thinking back on recent history, many different people, ranging from residents of Detroit to President Obama, seem to have one thing on their minds: “these are tough times.” [i] This truism, heard since the end of 2007 and the start of the liquidity crisis, is beginning to lose its meaning. Adding to this confusion are conflicting reports either showing the economy is recovering or insisting there is still much work to be done before the economy recovers. However, what official releases say and what people see in their everyday lives can differ dramatically. For example, the National Bureau of Economic Research stated that the liquidity crisis officially ended in June of 2009, but Bandholz, an economist at Unicredit Markets, commented “’the recovery still feels like a recession’ to many people” (Hill). [ii]
To put some perspective on the issue, the unofficial Misery Index, a total of unemployment and inflation rates in America, says “misery” is the highest it has been in 28 years. [iii] The index measured 12.7, (a combination of 9.1 percent unemployment and 3.6 percent annualized inflation,) as of June, 2011. The index registered numbers above 10 since late 2009. However, if a high Index number reflects “misery,” than the Misery Index reported “happier days” from the early 90s until the mid-2000s. Investor confidence was higher during the almost decade-long bull run from 1990 until 2000, [iv] which no doubt contributed to the lower unemployment rates and annualized inflation the Misery Index recorded.
While the Misery Index is an economic indicator rather than an emotional one, I personally feel that it is appropriately named. There is an unfortunate, but real, link between financial hardship and emotional turmoil. For example, the ‘Family Stress Model’ of economic hardship, as put forth by Dr. Conger, “proposes that the experience of poverty is one of the more important factors that can put severe strains on spousal relationships, bring about feelings of depression and increasing family dysfunction” (Ahmed). [v] Children and adolescents whose families are rife with internal strife report higher levels of anxiety than children whose home life is more stable.
Too much anxiety is unhealthy, especially for children in their formative years. Frequent feelings of anxiety make it more likely that one becomes affected by depression. In fact, about 20% of the teenaged population of the United States is diagnosed with a serious depressive condition before reaching adulthood. [vi] In addition, anxiety has been linked to physical ailments such as thyroid disease, respiratory disease, arthritis, migraine headaches and sudden cardiac death. [vii]
An extensive, longitudinal study conducted by Jean Twenge at Case Western Reserve University in Cleveland found that levels of childhood anxiety have been steadily on the rise since the 1950s. This increase has been so great that the average “American child in the 1980s reported more anxiety than child psychiatric patients in the 1950s” (Twenge). [viii]
Interestingly, a yearly survey of college freshmen conducted by UCLA finds results similar to Twenge’s. For instance, last year’s incoming college freshmen had the worst emotional health and highest stress recorded since the survey began a quarter of a century ago. [ix] It would appear that anxiety in childhood does not dissipate as one grows older.
The current weak economy can be blamed for much of the added stress college students are feeling. Parental unemployment, recorded by the same UCLA survey, is also the highest it has been in 25 years. Furthermore, the cost of receiving post-secondary education is the highest in history. These circumstances result in more students having to take out loans to finance their higher education. As of 2009, the average debt upon graduation is $24,000. For many, the cost is simply too high; only 56% of those who enroll at a four-year college earn a bachelor’s degree. [x]
Worries about grim career prospects also contribute to the feeling of being overwhelmed that many incoming college freshmen reported. Considering all the economic circumstances, the pressures to succeed in college greatly affect students. College students as a whole are more often kept up at night worrying than by drinking, homework or even late-night computer usage. Without sufficient sleep, people are less able to compartmentalize and deal with set-backs in their daily lives. Being unable to do so results in feelings of helplessness and of being overwhelmed. These feelings in turn keep people from sleeping at night and the entire process spirals out of control.
Uncertainty in the market can lead to a bear market in which security prices fall. Falling prices can inspire negative sentiments and more uncertainty, which make it difficult to make substantial gains. Additionally, bear markets historically precede recessions around 75% of the time. [xi]
Personally, I wonder how the economy and the Misery Index will look when all these over-anxious, stressed, desperate children and young adults enter the marketplace. What will it be like years from now if the trend continues and each new generation is less confident and more scared?
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