Psychology’s Collusion in Conventional Financial Delusions

Everyone knows that to practice medicine without a license violates the law of the land. But how are we to judge professional psychologists who dispense financial advice in a time of worldwide financial meltdown? That is just what the president of the American Psychological Association does in the March 2009 issue of the Monitor on Psychology (Vol. 40, No. 3, p. 5; online at www.apa.org/monitor/2009/03/pc.html). Dr. James H. Bray says that even though “flush with cash, they [consumers] will not spend it, hire new people or buy new equipment or household products because they are uncertain about … the future.” He makes an appeal to his constituency to employ their expert know-how and therapeutic techniques to motivate the American public “to create a confidence virus to spread throughout the land to change the attitude and behavior of the American public” so that they will spend and borrow and “turn consumer confidence around.” He assures us that “the repeated message from many experts is that a major contributing factor to the economic downturn is a lack of consumer confidence about the economy.” Might “consumer confidence” not be a mass delusion on the state of the economy?

The first problem with basing psychological advice upon “many experts” is that the other experts do not agree with them. When asked about the “confidence factor,” CNN’s financial guru, Susie Ormond, replied that it contributed about one percent to the financial crisis. To confirm my suspicions, I consulted with one of our professors of finance in the Duquesne School of Business and he assured me that “consumer confidence” plays an insignificant role compared with the housing bubble, overvalued assets, the bundling of

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bad loans, the credit crunch, lack of regulator oversight, rampant greed, and outright fraud.

Even apart from who is right and who is wrong on the financial issue of consumer confidence, a deeper question needs to be asked: Is it appropriate for psychologists to use their professional expertise to influence matters not directly germane to their field? Might not Dr. Bray’s proposed agenda be an instance of what Philip Rieff has dubbed “the triumph of the therapeutic”: the propensity of modern psychology to collapse all domains of knowledge into its own categories?

As ethical psychologists, before prescribing any therapy, we must always ask: Will it help or harm the client? In response to a letter by John Tierney in The New York Times, “Oversaving, a Burden for Our Times” (March 24, 2009, p. D1), Lester L. Tobias of Hillsboro Beach, Florida wrote, “To Pinch Pennies or Not?” (The New York Times, March 31, 2009, p. D4). He cautions the author of the earlier letter to give a second thought before trying to persuade his parents to spend more freely. To bolster his point, he reminds us that, “There is a significant body of evidence that suggests that happiness does not improve with spending. Furthermore, there are millions of [Aesopian] ‘grasshoppers’ now suffering the consequences of over spending in good times. Mr. Tierney would do better to teach his parents’ wise example to the countless people who too often succumb to the empty temptation of the consumer society.”

This letter seems to challenge an implicit assumption of Dr. Bray’s advice. Human beings are more than primarily producers and consumers. Rather than challenge the basic assumption of the consumer society, Dr. Bray appears not only to buy into it, but even to promote it, to the possible detriment of the individuals involved. What right do psychologists or any social scientists have to encourage their clients to run possible financial risk and ruin?

Fortunately, President Obama seems to be more sen-

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sitive to this ethical issue. At a press conference in London on April 1, when asked if he would like to see the American public spend more, he responded with evidently great caution. While expressing the hope that people would spend, he offered no general prescription. Rather, he qualified his advice: “Each family must look at their circumstances and make that decision” (CNN interview, April 1, 2009). The next day the President was quoted in The New York Times as saying that America was unlikely to return to its role as a “voracious consumer market” (April 2, 2009, p. A1).

Psychologists are already well aware of the widespread curse of consumerism. Faced with millions of individuals struggling to conquer their depression and fill the existential void by compulsive spending, psychologists must take care not to foster the pathology.

Dr. Bray’s well-intentioned advice should serve as a cautionary tale for all of us psychologists. In our noble desire to be of service to our fellow-human beings, we have the ethical obligation to pause, stand back, and question our own implicit philosophies and hidden assumptions. Before proposing the use of psychological know-how and therapeutic techniques for social, political, or economic purposes, we need to closely examine what might be the unintended consequences. For instance, let us say that with the best intentions in the world, legions of psychologists set about the task of motivating millions of Americans to spend more liberally. What might be the impact on the environment, on the already impoverished in our country, and on the people in the developing nations of our world? In a world of limited and unrenewable resources, what monsters might a return to conspicuous consumption and compulsive spending ultimately produce? Certainly an ethical psychology has more to offer a suffering society than the excesses of greed and consumption that have brought us to our present sorry state.

A person’s confidence should never be manipulated by a psychologist. Consumer confidence depends ultimately

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on a sense of trust, and trustworthiness is an attribute that must be earned.

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