Is a financial crisis traumatic? In her writing and teaching, noted grief and loss researcher Katherine Shear, MD has defined grief as something good leaving our lives and trauma as something bad coming into our lives. The current crisis has elements of both grief and trauma, especially for those in and around New York City whose livelihoods directly or indirectly are dependent on the financial industry. Like other disasters, a sudden financial crisis can result in loss, anxiety and uncertainty about the future. Much of what is known about the emotional and behavioral response to other types of disasters can be helpful in managing the psychological consequences of the financial crisis. Left unchecked, these consequences can further complicate individual, community and organizational recovery.
The Emotional Impact of the Economic Meltdown
In major disasters there are unfortunately many instances when individuals and families truly do lose everything. Losses can include loved ones, a home, pets, irreplaceable keepsakes and more, including a sense of community or safety. Deeply held personal or religious beliefs can be shaken. In many situations and specifically in financial disasters, those loses can be somewhat imperceptible and not obvious to others. A financial crisis can result in a loss of identity and belonging, control, confidence, security, financial and otherwise, status and role, trust, future, purpose, and hope.
Across different types of disasters and crisis events, it is common for those individuals directly affected, as well as those in their immediate circles, to experience a range of reactions. And while these are natural and normal responses, they can certainly be unpleasant and add to one’s overall discomfort. Such reactions include physical, emotional, cognitive and behavioral changes that in some instances can complicate the situation and become barriers to coping with the challenges ahead. While these reactions are widely seen in response to natural and technological disasters, they are common in other interpersonal crises where there is an element of threat. Threat to one’s survival due to a financial crisis is no different. Most of these reactions are short-lived and self-resolved as the individual moves along the timeline of the event. For some, these reactions can be more pronounced and prolonged. There may even be instances in which, in a more extreme form, one or more of these reactions may represent the symptoms of a medical or psychological emergency.
Physical Reactions – Shock-like reactions, insomnia, loss of appetite, headaches, fatigue, and elevated blood pressure and heart rate.
Emotional Reactions – Depression and anxiety, numbness, constricted range of emotions, guilt, shame, and doubt, intolerance of emotional response, pessimism, and hopelessness.
Cognitive Reactions – Distractibility, memory problems, decreased problem-solving ability, declining work performance, recurrent intrusive thoughts, and nightmares.
Behavioral Reactions – Thrill-seeking, risk-taking, preoccupation with related news stories, rumors, etc., increased substance abuse, jumpiness, and feeling “wired.”
Interpersonal Reactions – Clinging, isolating, irritability, argumentative, distant, detached, increased/decreased need for physical intimacy, and wanting to be only with co-workers/avoiding contact with co-workers.
Chest pains, arrhythmias or heart palpitations, as well as respiratory distress and acute abdominal pains may be the signs of something more serious and require medical attention. While potentially stress-related, these reactions should not be dismissed. Likewise, suicidal and/or homicidal thinking, as well as serious mental disorganization or disorientation may be the signs of psychological emergencies and should be assessed by medical or mental health professionals.
During a time of increased personal and professional demand, the impact of sleep problems, poor concentration, depression, apathy and increased use of alcohol and other substances can become serious obstacles to problem-solving and decision-making. Problems in personal relationships can create tension and distance from those who might be most helpful and supportive. The emotional consequences can be significant and difficult to address if not taken seriously and proactively.
Managing the emotional and behavioral consequences of any disaster, natural, technological or economic, is critical to the recovery of the individual and their family, as well as the community and organization. The psychological impact of the current financial crisis should not be ignored or minimized. For many people this crisis represents substantial losses and a threat to personal and professional survival. This should not be underestimated in any way.
Coping with Surging Stress Levels
There are coping strategies and techniques that can be helpful for individuals and families, as well as organizations. Many of these are similar to those being used today to assist the survivors of other disasters across the country and around the world.
Here are some useful suggestions for coping with the stress and anxiety stemming from the financial crisis: limit exposure to news stories and constant alerts about the stock market and economic climate; get accurate, timely information from credible sources (avoid rumors if possible); try to maintain a routine, even if you must create a new one; exercise, eat well and rest, even though it may be difficult to sleep; stay busy both physically and mentally; communicate with friends, family and supporters and let people know how they can help; use spirituality and your personal beliefs; keep a sense of humor; take one day at a time.
The great risk communications expert, Peter Sandman, PhD, advises that, “Action binds anxiety.” Doing something is almost always more psychologically helpful than doing nothing. Individuals and organizations would do well to heed Dr. Sandman’s advice. Getting people active in support groups and social networks, as well as practical hands-on activities is important. It is known that people who actively participate in rescue and recovery tasks during disasters fare much better, physically and mentally, than those who withdraw, become passive or apathetic. Keeping busy, focused and productive during stressful times is essential to counteracting feelings of helpless and fear.
No One is Untouched
Deborah DeWolfe, PhD, author of one of the first field guides developed for disaster mental health response stated, “No one who experiences a disaster is untouched by the event.” This is not to say that everyone is traumatized or psychologically damaged in some way, but a sudden, shocking and threatening event takes its toll. It is estimated that almost 9,000 employees lost their jobs in the Bear Stearns restructuring. Ultimately, job losses may be in the tens of thousands across the financial industry and countless more in-service jobs that rely on financial sector workers as customers in the restaurants, bars and boutiques in and around the financial districts. A storm, earthquake or act of mass violence resulting in tens of thousands of lost jobs would certainly be called a disaster. Make no mistake, the life-changing events of the past several weeks in the global financial system are also a disaster and no one is left untouched.
Steven M. Crimando, MA, BCETS, CTS, is a noted expert in disaster mental health and traumatic stress response. He is a consultant and trainer to governmental agencies, NGOs and multinational corporations and is the Managing Director of Extreme Behavioral Risk Management (XBRM), a consultancy focused on the human factor in disaster recovery, business continuity and homeland security. XBRM is a division of ALLSector Technology Group, a subsidiary of the F.E.G.S. Health and Human Services System, one of the nation’s largest and most diversified not for profit organizations. ALLSector is a major technology consulting firm providing technology solutions, IT systems integration services and application development for the not-for-profit and business sectors.