Emotional Bankruptcy: Preventing A New Crisis

While the gaze of the American mindset is still fixated on measuring and maintaining economic prosperity, we might be turning a blind eye to an emotional crisis that could fracture society's stable foundations. A more humane approach is needed to monitor the emotional signals of our time, so that we may strengthen the fabric that holds our collective wellbeing together.

A wake-up call

In 2008, the western world woke up to the news of a new financial collapse. Hundreds of thousands of workers were watching their wealth and stability crumble on live TV, as commentators from the most reputable news stations claimed with gasping voices that the American economic fleet was sinking into the depths of an unforeseen crisis. How could we miss the signals? Where were the vaunted professionals responsible for monitoring the health of the market? As everyday people were left scratching their heads at the institutional incompetence of the regulatory bodies – experts and leaders were quick to point fingers and find an exit strategy with the funds that they could manage to hold.

There are many theories that attempt to describe why these highly improbable events happen. Nassim N. Taleb’s Black Swan states that these extraordinary circumstances occur largely due to a simplified perspective where the observer over-indexes confidence on the future based on knowledge of the past. Shortly after the economic crisis, Black Swan and other books aiming to make sense of the catastrophe made their way from the academic aisles to the noteworthy best-seller section at your local Hudson News.

Regardless of the preferred rationale, the truth is that public interest in personal finance and responsible economic behavior became a hot topic for the general public only after the fracture happened. This warning sign also widened the scope and depth of analysis, encouraging researchers to find new perspectives to monitor the system and prevent future disasters.

Today, a new crisis casts a shadow that threatens the future stability of America. This time though, it’s not one that can be perceived through complex mathematical instruments and economic metrics, but one that requires acute human sensibility and collective empathy to diagnose and treat its symptoms. What if I told you that the emotional fabric that holds our society together is showing signs of tear? What could we do to repair it?

The economics of attention

In 2019, the economy has recuperated but thousands of families are still sore from the unsuspecting fall. However, our economy today is different. In 2008, you could walk into a subway station and see people calmly gazing into nothing, having a conversation amongst themselves, or perhaps lost in the pages of a book. Today, our morning commutes are a parade of humans avoiding obstacles while they stare into their screens. Whether it’s earning points on Candy Crush or scrolling through Instagram – we are permanently engaged in economic activity.

The rise of the digital service economy has made dopamine and attention, not dollars, its main currency. Global-scale advertising companies fiercely compete to claim a share of our attention while their R&D laboratories discover increasingly addictive behavioral tactics to retain it. A study conducted by Nielsen claims that the average person in the United States, spends upwards of 10 hours engaging with screens every day, generously gifting away attention to organizations who directly profit from it.

Like money, attention is also a limited resource. It is a crucial process through which we take notice of ourselves and the world around us, infusing it with meaning and significance. Every human being needs attention to be able to create and maintain relationships, navigate external environments, and direct energy to focus on the inner self. These activities can also be described as the process of cultivating awareness.

There is one major distinction to be made. While both dollars and attention are critical contributions to allow value to flow through the economy – the public conversation is almost leaving one out entirely. While there is consensus that people should save a minimal amount of money to live with dignity, participate in society, and be resilient in times of crisis – the same cannot be said for attention.

A society at risk

I’ve never been financially bankrupt, but I have felt emotionally bankrupt in the past - and the consequences have been paralyzing and extremely hard to recover from. In 2017, I was diagnosed with clinical depression. Lacking any knowledge about mental health, or even a basic understanding of the options available, I felt desperate. The following months were a dizzying journey between different health providers and treatments that led to the defeating realization of my own ignorance on the topic.

With time and support, I learned that I was not the only one enduring these challenges. People of all walks of life graciously opened their life story, providing space to discuss methods and personal practices to carve out a path towards healing. Though their stories were different, the common thread that bound their progress together was the practice of building awareness and saving attention. Staying off their phones and laptops, as well as dedicating time to focus on themselves and their loved ones seemed to be the winning formula.

Why are we so easily giving away the crucial ingredient to foster resilient emotional wellbeing? What happens if the country runs out of attention, at scale?

The commercial abuse of attention, in addition to disruptions that occupy mind-space such as increasing ecological disasters and polarized political climates, is leaving large amounts of the population with dismal amounts of leftover attention to dedicate to themselves. Recent data shows an increase in mental health disorders that warrant attention. Between 2009 and 2017, rates of depression amongst kids ages 14 to 17 increased by more than 60%, according to a study by the Journal of Abnormal Psychology. The World Health Organization states that depression is already the world’s number one cause for disability, affecting more than 300 million people worldwide. Data from the General Social Survey shows that lack of face-to-face interaction and increased smartphone ownership have been significant in reducing sexual drive within young populations.

The emotional pain and lack of self-awareness that is aching today's society is cause for concern. Is there a tipping point where isolated cases become the norm and the light of optimism that shines through our culture begins to fade? Can an emotional crisis befall the country and leave it in a state of bankruptcy? As I sharpen my gaze, I see another black swan approaching.

What to do.

While this interpretation of the data might seem pessimistic, and it’s easier to avoid imagining the possibility of emotional bankruptcy in America, the mortgage crisis serves as a reminder to look for patterns outside the norm. Raising early flags can lead to changes in regulation, tools, and literacy that may become instrumental to preventing a new crisis.

The financial industry can also be used as a parallel to find interesting tools and strategies to support positive change in the economy of attention. While these examples are by no means perfect, they might be inspire new ideas to tackle emotional change at scale. Let's dive in.

Regulation and Advocacy

The accelerated rate of technological change has managed to outpace regulation. In an era of updates, pivots and seasonal releases, it is hard to examine the unintended consequences and contingent effects of a quick decision. While the mantra of “ship early and often” might work as a rallying cry to the lean startup economy, it can also result in a culture of disposable insights that may lead to deep, long-term emotional damage.

In finance, the "lean" ethos isn't as easy to get away with. Most products and features that impact people’s experiences with money need careful review and approval by non-partisan advocacy groups like the Consumer Financial Protection Bureau (CFPB). These and other entities engage in constant dialogue and discussion about the boundaries that should be upheld by the system to protect its constituents. While there is criticism to be made about these regulatory systems, we can learn from their example to set up similar rigor in the context of protecting attention and emotion.

It is not by coincidence that terms like “Tech Ethics” have become vox populi in recent years. After the world’s most trusted technology brands such as Facebook, Twitter or Google became the subject of scandals that put into question their ultimate intentions – the public has demanded more oversight to prevent global-scale bias, privacy violations, abuse, and manipulation. With these practices, organizations can cause significant damage to the emotional stability of the billions of people regularly engaging with them.

While the heavily regulated financial industry can stifle innovation, it also has built-in protective barriers to prevent large-scale mistreatment and exploitation. Without these, we would see a sharp increase in the already alarming rates of inequality, illiquidity and, financial suffering. What institutions should regulate the emotional lifeline of the country? How might we empower ordinary people to define, affect and enforce these regulations?

Behavior Change Tools

A useful lens to understand personal finance is to see it as the process of changing behavior over time to achieve positive outcomes. Cultivating healthy practices to make wise monetary decisions is a life-long journey for which there has always been methods and tools to improve upon. However, since the financial crisis - an abundance of new tools primarily coming from the FinTech industry have been newly developed to equip people with user-friendly ways to take control of their financial future.

At the most basic level, the fundamental behavior required to build a healthy financial path is saving. For every level of income, it is recommended that we set aside some money to prepare for emergencies, invest in the future, and accomplish goals. Some clever new digital solutions, such as Digit or Qapital, leverage technology to encourage users to save a little every day. The compounded effect of these small contributions can provide savers with a safety-net to prevent crises.

Similarly, building emotional resiliency can also be seen as a life-long process of behavior change. In this case, one of the most fundamental practices to achieve resiliency is the practice of cultivating awareness. In other words, saving attention is equally crucial to prepare for emergencies, invest in the future, and accomplish goals. Using this parallel, it's possible to view meditation apps as the digital “savings program” of the attention economy. Let's dig into this further.

In the last few years, meditation apps such as Headspace or Calm have become household names in the US – demonstrating up to 81% growth YOY. The experience of using these apps is strikingly similar to popular financial savings applications – from setting goals, to making daily contributions, and tracking progress. The images below contains a side by side comparison of Headspace, a meditation app, and Digit, a savings app.

What behavior change tools and practices from the world of finance can be extrapolated to apply to the attention economy? How might we elevate the conversation about self-love to be akin to financial responsibility? What good is a rainy day fund, when the entire world feels submerged in rain?

Education and Literacy

Most experts agree that the path to financial wellness starts with basic literacy. Understanding simple concepts such as budgeting, saving, and investing can prepare everyday people to have informed conversations about their finances. More importantly, financial literacy empowers individuals to recognize and take action when things go sideways. Most Americans, however, still struggle to understand what a FICO score is, or how to use credit to their advantage and not their detriment.

Since the crisis, new financial education initiatives emerged with the purpose to increase people’s financial literacy in a non-judgmental and approachable way. These platforms are not limited by income bracket and can range from courses in personal finance fundamentals, to advanced investing, and long-term planning. For example, the design consulting firm IDEO released Society for Grownups, a brick and mortar location aiming to educate millennials on the basics of personal finance and financial wellness. Big banks are also rethinking their approach to financial education by focusing less on the money, and more on the human behind it. Capital One, for example, offers Money Coaching - an in-person program where certified life-coaches sit with people to help unravel how finance affects their lives, support them to set goals, and create a plan to start working towards them.

Emotional literacy, on the other hand – is still a topic of deep taboo. Most people feel as awkward talking about their feelings as they do sharing their financial difficulties. Staggering data shows that two thirds of humans suffering from anxiety and depression remain undiagnosed. This happens largely because it is easier to shut down than to initiate a conversation about emotions that are hard to explain. The Anxiety and Depression Association of America (ADAA) has numerous testimonies that allude to this barrier.

"Feeling intense shame and a nagging fear that people would think my attacks were all in my head, I decided to hide my symptoms from even my closest friends and family."

Additionally, emotional literacy is not only beneficial to those that share openly about their emotions, but is also crucial to be helpful on the receiving end of the conversation. Most people are not trained to comfort and support another person undergoing an emotional health crisis in appropriate ways – which may result in increased frustration and misunderstanding that could accidentally worsen the situation.

The city of New York just released a mental health first aid course, offered widely at no cost. The eight-hour training teaches participants to listen without judgement, and respond to someone in distress until they can get the professional care they may need. After completing the course, participants receive a three-year certification in Mental Health First Aid.

Initiatives like these are fundamental to prepare individuals and communities to act aptly when confronted with emotional turmoil. This is a form of literacy that has a direct potential to change and save lives. But why stop there? Why aren't more children enrolled in foundational vulnerability and emotional intelligence courses? Why aren't we teaching people to be as prepared emotionally as they are on the ABC’s of personal finance? Both these forces are equally important to prevent fractures in our society's wellbeing.

One of my favorite examples of emotional education in action, is NY-based event series “Vulnerable AF” led by Veronica Kaulinis. Tired of feeling incapacitated by a recent breakup, Veronica decided to gather her friends and simply share out loud how she was feeling. The folks in the room felt inspired by her courage and decided to share some of their own personal battles. The refreshing and redeeming sensation they carried thereafter, encouraged them to ask their friends to join the next session. Veronica now hosts weekly sessions where a growing community of friends, old and new, share their feelings while learning frameworks and techniques to improve their communication skills. Vulnerable AF now offers full-day workshops, couples sessions, and retreats.

What's next

The truth is that it is impossible to say whether a large-scale emotional crisis will befall us or not. Like the financial breakdown of 2008, complex and ambiguous systems will always have room for unprecedented errors. However, we can learn some lessons from these disasters to sharpen our eye, elevate the conversation, and amplify the agency to prevent new ones.

By way of insight, I fear that the emotional pulse of our country – and the world at large – demands closer attention. For this reason, I raise an invitation to take action in better monitoring, understanding, and managing emotions at scale. By offsetting the economics of attention with appropriate ethical regulation, effective tools and emotional literacy, we can regain the focus necessary to advance into the future with grace and resilience, and perhaps spot any black swans that may come our way.