Three weeks after the stock market crash in 1929, Lawrence J. Fava jumped into the Schuylkill River in Philadelphia. He was a middle-aged real estate dealer, and he was “frantic” about the losses he had suffered, according to his suicide note. He left the note on the Girard Avenue Bridge and then leapt into the dark, frigid water, according to a small item published that month in the New York Times. But Fava survived the fall, and he regretted his decision at once.
Fava thought the Schuylkill River held a solution. Not a solution to his financial woes, alas, but to the anxiety that had hijacked his peace of mind. He was stalked by a fear of the future — “of the innocent persons who would suffer” because of his losses. But when he hit the river, he was suddenly afraid of something clear and present. Fava had perspective, and he clung to a piling in a desperate bid to undo his decision.
In the face of the current economic meltdown, some people have more reason than others to worry — people, for example, who need to spend their savings very soon. For them, fear serves a purpose: it encourages action, which may prevent further losses. But for most of us, what will happen in the stock market in three or 10 or 20 years, when we will most need our savings, is unknowable. We can’t predict the financial future, so we shouldn’t try. But anxiety doesn’t work according to those rules.
The part of the brain that takes over when we are frightened is called the amygdala. It’s an ancient, almond-shaped mass of nuclei located deep within the brain’s temporal lobes. The amygdala is designed to be wildly sensitive to certain things — for instance, anything uncontrollable and unfair (like a terrorist attack involving an airplane) — and remarkably forgiving toward other, far deadlier menaces that seem to be small in scale (car crashes) or involve less suffering (heart attacks).
Most of all, the amygdala loathes unpredictability of the kind we are currently enduring. Lab experiments with rats and humans show that both species prefer predictable electric shocks over unpredictable shocks. That’s because, on a normal day, the brain works by following shortcuts. We recognize patterns in order to make split-second judgments about what we are seeing. Shortcuts are ruthlessly efficient, which is important for an organ that only uses about 40 watts of power per operation. But the more uncertainty we face, the more shortcuts our brains use. And the shortcuts lead to a slew of predictable errors.
Shortcuts, for example, make us more prone to do whatever everyone else is doing — or whatever Jim Cramer tells us to do. “The brain cannot afford to re-evaluate on a millisecond by millisecond basis. So it will use other people’s opinion as a proxy for its own,” says Emory University neuroeconomist Gregory Berns, author of the new book Iconoclast: A Neuroscientist Reveals How to Think Differently.
To test this herd behavior, Berns and his colleagues hooked 32 people up to brain-imaging equipment and watched them reckon with a group opinion (about whether two shapes were the same or different) that was clearly false. They found that the brain worked to integrate the false opinion into its perception of the world. In other words, if other people start selling a stock you thought was valuable, you may want to do the same — at first.
In a state of high uncertainty, the brain wants most of all to do something — anything. “The natural urge, when we hurt, is to pull away,” says John Forsyth, an associate psychology professor in the Anxiety Disorders Research Program at the University at Albany, SUNY. Unfortunately, doing something — like selling stock or drinking heavily at the office — can make things dramatically worse.
Happily, the brain’s other defining characteristic is that it is flexible. Once we know our weaknesses, we can compensate for them. The part of your brain associated with conscious thought, called the prefrontal cortex, has a direct line into the amygdala and can quiet it down. This requires effort — and creativity. “The most productive thing is to recognize that it’s natural to feel anxiety in the context of unpredictability. A rat would be going through the same stuff,” says Forsyth, and he means that in a reassuring way. “And then sit with it. Do not let your feelings decide what to do. Feelings are fickle.”
It may also help to consider what you will do if you do lose everything. Literally, what will you do first, second and third? Contemplating action can shrink the threat to life size and introduce new possibilities. “We become very attached to our mentally constructed future,” says Forsyth. “The harder you hold on to your story about your future, the harder this will be.”
After Fava jumped into the Schuylkill River in 1929, his brain finally had a threat it knew how to handle. He held fast to the piling until he was rescued by a river police boat. The police delivered Fava to the Presbyterian Hospital, where he was revived.
By AMANDA RIPLEY Wednesday, Oct. 15, 2008. www.time.com
Filed under: Uncategorized , brain, Crisis, economic
