Month: December 2010

And What To Do About It

The savings rate among workers has dramatically declined over the past few decades.  In many countries it’s now lower than the rate of borrowing.  No surprise.  It takes two wage earners in most family to make ends meet, and the families are still deeply in debt.

The recession we are still struggling to recover from was in part the consequence of encouraging workers to take on debts they had little chance of repaying.  And when they defaulted, as so many of them inevitably did, the whole superstructure of securitized investment instruments based on those debts collapsed as well — along with many of the highly over-leveraged financial firms that couldn’t sell enough of them.

In this context, it doesn’t make much sense to believe that families should strive to put aside money for savings, or even to think that they could if they wanted to.  Where will the extra money come from?  To be sure, it’s hard to disagree with the logic of saving for a rainy day, particularly in a society that has such fragile safety nets as ours.  But what will get people to squeeze the lemon harder when it’s already dry?

The easiest way is simply to make it automatic.  If people have to think about putting money aside, no doubt, they won’t do it.  Each month there will be another bill to pay off, another necessity to buy.  But even with an automatic payment plan, you have to agree to it initially.  When might that seem appealing — or, even, possible?

Cass Sunstein and Richard Thaler, two behavioral economists, offer an approach to such problems in their book Nudge.   They call it “choice architecture,” a means to encourage people to make choices that are in their own interest.  They suggest employees be offered the opportunity to sign up for automatic savings when they get raises. That way, it appears to cost them nothing, as it comes out of income they never had before.  Nothing lost, something gained.

But what to do if you are self-employed, or your employer is not enlightened enough to offer you such a plan?

You need your own choice architecture, your own attractive reasons to save.  One possibility is having goals that really matter.  If you can outline specific things you want — a vacation trip, some new furniture, a degree, a gift for your children — you will be thinking of ways to enhance your life.  With such goals in mind, each deposit in your savings account will have a positive meaning.  The balance will not be abstract, a matter of negative cash flow.  And, of course, you can change your goals as you see that you are actually getting somewhere.

This may seem like a mental trick, and to some degree it is.  But that doesn’t mean it can’t work.  It’s using your imagination to gain a greater degree of control over your lives.  It’s playing at engagement rather than indulging in escapism.

THIS ARTICLE WAS ORIGINALLY PUBLISHED ON MINDFUL MONEY.COM

“One Nation Under God”

More Americans say they go to church than actually do, according to recent research.  As Shankar Vedantam reported on Slate, “two in five Americans say they regularly attend religious services,” but studies of actual behavior show that the real number is half that.

The churches themselves have been suspicious of the reported numbers. “If Americans are going to church at the rate they say they are, the churches would be full on Sunday mornings and denominations would be growing,” wrote C. Kirk Hadaway, now director of research at the Episcopal Church.  Their own research confirms what social scientists are finding.  In fact, church going here is at about the same depressed level for as it is for most western countries.  (See, “Walking Santa, Talking Christ.”)

There are several interesting questions here.  First off, of course, is why people say they do when they don’t?  Then, why haven’t others noticed the discrepancy?  It seems to be something no one really wants to challenge.  Political leaders join in the hypocrisy, making a point of being seen attending church, and invoking god in their speeches.  Clearly, we are engaged in a national conspiracy to seem more religious than we are.

“Upward of 90 percent of all Americans believe in God, pollsters report, and more than 70 percent have absolutely no doubt that God exists.”  But in the light of the figures on church attendance, those figures are also suspect.  Is this what they want to believe — or think they should believe?

Vedantam, author of The Hidden Brain, speculates that it might a matter of our American identity, but even he isn’t sure.  We can be sure, however, that this boils down to a massive case of social conformity.  And, as in most cases of conformity, it’s driven by fear.

We are a country marked by profound divisions.  Successive waves of immigrants fleshed out what was for many years a struggling nation.  Even after the Civil War, there were continual riots among immigrant groups struggling for political influence and jobs.  They never got along well with each other, leading to our tradition of identity politics.  And then there are the divisions and conflicts between the rich and the poor, the north and the south, the frontiersmen and the eastern establishment, the educated and the red necks, the catholics, the protestants, and the jews.  European nations started out with a far more consistent core of citizens.  We have profited immensely from our diversity, but at the same time, we struggle to know who we are, what we have in common.

All modern democracies are characterized by conflict, and that may be what ultimately makes them both difficult and successful.  But America may be the most fragmented of all.  Without the unifying belief in God, we might not have anything at all in common.

The Pledge of Allegiance says “One nation under god,” and that may mean more than we have thought.  Without god, perhaps, we might not be able to think of ourselves as one nation at all.

Are They Related?

There is very little correlation, according to a recent study:  “happiness does not increase when a country’s income increases.”

In the beginning of a country’s rise out of backwardness and poverty, more wealth does make a difference.  But, citing surveys from Chile, China and South Korea, the economist Richard Easterlin points out: “In these countries, per capita income has doubled in less than 20 years but overall happiness does not seem to have followed the same path.” (See The Guardian, “Happiness Doesn’t Increase with Growing Wealth of Nations, Finds Study.”)

Economists are surprised, because GNP (Gross National Product) has long been thought the best indicator of human welfare.  More GNP generally means more money for most people, and more money improves the quality of life, and that means happiness.

But, perhaps, the survey suggests that works to make you happy only if those around you do not share in your good fortune.  General prosperity may fail to enhance individual contentment.  Perhaps it is a matter of being aware of your advantage, not that you need to get the highest salaries and bonuses or be the object of envy.  Maybe, individual goals and aspirations vary so much it is impossible to generalize.  Maybe one has nothing at all to do with the other.

Freud was well aware that economic success did not make people happy.  Most psychoanalysts and therapists today would agree.  The founder of psychoanalysis thought only the realization of a deep childhood desire could provide such satisfaction.  But today there are many different points of view on the subject, even among analysts.

An additional problem is that people are very poor reporters of their own states of mind.  They will usually tell you want they themselves want to believe.  If you want to know if someone is really happy or not, you have to catch him or her in the act of happiness to know for sure.  Being happy or acting happy are more reliable indicators than thinking too much about it.

But professional therapists also know that the more important question is often not what makes people happy so much as what prevents them from being happy.  Poor self-esteem, often a legacy of an unhappy childhood, undermines all feelings of success.  Hunger and cold make it harder to relax and enjoy one’s experience.  Insecurity and failure to engage one’s work, even if one is good at it and well-compensated, keeps one from being satisfied.  Anxiety – no matter what the cause – infiltrates all our perceptions and feelings, and brings us down.

Economists can probably hope to measure how well our basic needs for security and health are being met in any given society, and if those are reasonably OK my guess is that people will tend to find the happiness they seek.  Most of us want to enjoy life, spend time with our children, play at sports, sing, dance and travel.

If we can do those things without dread, the amount of money we have is irrelevant.

Always?  Sometimes?  When?  Why?

Why does the law prohibit incest?  Is it just another example of a deep-seated social convention or a prejudice, like the feeling some people have about gay marriage or polygamy?  Who is hurt by it?

The matter comes up again now as a Columbia University Professor has just been charged with having a three-year sexual relationship with his adult daughter.  Many are outraged by the behavior, but others argue that what adults do consensually with each other is nobody else’s business.  Is it possible to think about it coolly?

A recent piece on Slate tries to marshal the arguments.  The one that has gotten most contemporary attention is genetic:  inbreeding compromises the gene pool and leads to a much higher incidence of birth defects and developmental disorders.  That’s true, but these days the increased technologies of contraception undermine that argument.  From that perspective, “protected” incest would be OK.  And what about same sex incest, where there is no danger of conception?  As Slate put it:  “If both parties are consenting adults and the genetic rationale is bogus, why should the law get involved?”

Ohio’s Supreme Court offered a different rationale:  “A sexual relationship between a parent and child or a stepparent and stepchild is especially destructive to the family unit.” This destructive effect, the court reasoned, occurs even if the sex is adult and consensual, since “parents do not cease being parents … when their minor child reaches the age of majority.”  The argument is that it is confusing and disorienting to everyone in the family. (See, “Incest Is Cancer.”)

That strikes me as a better argument, but, then, what if it isn’t confusing?  What about the special cases where it is precisely what the parties want.  That may be confusing to others, but is that a reason for the law to intervene?  Moreover, there are so many sources of confusion in families today:  divorce, adoption, same sex parents, in vitro fertilization, parents living and working in different cities.  Why single out incest?

Freud argued that the reason we prohibit incest is that we are so powerfully tempted by it.  That’s why it’s taboo, not just illegal.  We have to erect barriers of horror and disgust to prevent ourselves from succumbing to temptation.

That has to be part of the argument.  Children need to be protected from sexual exploitation by parents, because it is all too easy for them to be abused.  Parents are strong and lustful, but children are weak and vulnerable.  And we know all too well the life-long damaging effects on children who are exploited by those on whom they are dependent.  Their capacity to trust others is impaired if not destroyed.

So we need laws and customs and taboos – whatever it takes —  to preserve the trust that children need to have in their caregivers.  That trust is not only the basis for their future relationships with others.  It’s the basis for the confidence they need to be responsible adults and citizens.

From the DSM to the Mainstream

The American Psychiatric Association has decided to eliminate Narcissism as a personality disorder.  It probably it has to do with the absence of rigorous diagnostic standards, a problem of particular concern to researchers.

That does not mean that “narcissism” will disappear from the thinking of clinicians.  Nor will it disappear from our cultural conversations.  Clinicians and researchers may battle over its precise meaning, but, liberated from its technical role in the mental health industry, “narcissism” may become more useful and familiar than ever.  It’s a term we need.

In the myth, as told by Ovid, the young boy Narcissus, beautiful but vain, spurned the many women who fell in love with him.  Finally, after he rebuffed the nymph Echo, who then died of grief, he was punished by the gods.  Fixed on his own image in a pool, unable to tear himself from it, he wasted away.

We tend to think this is a story about a self-centered individual, just as we have thought about narcissism as an individual psychopathology.  But the myth suggests several important interpersonal and social dimensions as well.  First of all, Narcissus and Echo represent a failed relationship:  the boy who cannot really see another, the girl who cannot speak up for herself.  Then there is the havoc wreaked on the community by the selfish boy:  social expectations of love are thwarted.  Finally, Narcissus, cursed to see nothing but himself, cannot survive.

There are messages in this for us.  In a world characterized by consumption, competition, and status, appearances easily matter more than substance.  The focus on Facebook “friends,” texts and tweets makes it harder to deepen relationships into lasting bonds. Success is measured by money and fame.  And a celebrity-based culture makes it more difficult to grasp that there can be more profound forms of recognition.

Not all narcissists are easily recognizable.  They are not all beautiful or constantly preening.  They don’t always dominate conversation.  On Wall Street, narcissism is often hard to discriminate from greed and arrogance.  In corporations it can look like bullying.  In politics it can resemble conviction.

Some have said that a certain amount of narcissim is normal, even essential — and that is probably true in a sense.  To know who we are, we do need to see ourselves reflected in others.  But to call that “narcissism” is a sign that we can no longer clearly discriminate the dangerous forms of self-absorption that impoverish our social relations from the real relationships and we so desperately need.