Financial Fallout: The Surprising Effects of a Recession

photo: m-louis

In March 2010, ScienceDaily published a story about an intriguing report investigating the connection between stock-market activity and the frequency of heart attacks.

The researchers, a team from Duke University Medical Center, discovered an increased incidence of cardiac arrest in the United States between January 2008 and July 2009, precisely when the stock market showed a clear decline in the midst of a massive economic crisis.

Although the scientists determined in subsequent tests that this inverse relationship wasn’t quite as pronounced as they believed initially (due to seasonal fluctuations in heart attack rates), their study remains groundbreaking in terms of its efforts to explore a rarely covered topic: the impact of economic patterns on cardiovascular events. 

It may come as no surprise to some that heart attacks go up when the NASDAQ goes down—after all, a great deal of circumstantial evidence suggests that stress is associated with heart disease and early death. But your ticker isn’t the only thing those negative shifts in the ticker tape affect. As it turns out, economic strain manifests itself in all kinds of subtler ways as well. 

The Hemline Index

One of the first individuals to start paying attention to the far-reaching implications of financial trouble was American economist George Taylor, who in 1926 developed a theory that the length of women’s skirts and dresses was directly related to the state of the U.S. economy. Taylor’s hypothesis, which he coined the “hemline index,” postulated that short skirts mean boom times and longer ones equal falling markets. 

Since then, his prophecy has proven eerily accurate time and again, most recently in 2008, when Claire Brayford, writing for the U.K. Express, remarked, “Anyone applying this theory to the New York autumn/winter 2008 shows … would predict that we are hurtling towards a recession. Hemlines … were all resolutely below the knee—a clear indication of belt tightening, both fashionable and not so fashionable.” Brayford’s astute analysis of this connection was that “a glimpse of leg gives a sense of independence and confidence; a sweeping skirt is a sign of modesty and austerity.”

Smoke, No Joke

Also in 2008, the American Legacy Foundation, a prominent anti-tobacco institution, hired Harris Interactive to poll cigarette smokers in the United States regarding their nicotine intake during the financial crisis.

More than three quarters — 77% — of the respondents stated that they were more stressed because of the economy, and of these individuals, an alarming two-thirds claimed their smoking habits were impacted as a result. Thirty-one percent of the female smokers surveyed and 17% of the males were smoking a greater quantity of cigarettes each day; 20% of middle-income smokers had put off quitting; and, ironically, smokers in the lowest income bracket reported smoking more than individuals in the higher brackets. 

Curvy Shape Shifters

When psychology professor Terry F. Pettijohn II and his colleague Brian J. Jungeberg set out to analyze the physical characteristics (both facial and bodily) of four decades’ worth of Playboy Playmates of the Year in conjunction with U.S. social and economic factors, they uncovered an astonishing link between the two sets of data.

Based on Playmates from 1960 to 2000, the researchers’ Environmental Security Hypothesis states that in dire financial times, men prefer older, taller women who appear sturdy and capable, with larger waist-to-hip ratios, smaller bust-to-waist ratios, and lower body mass indexes. On the other hand, when money is no object, men’s ideal female is younger, shorter, and curvier, with larger eyes, features that connote more, well, playful qualities. 

Musical Mutations

Another research endeavor Pettijohn spearheaded, this one with Donald F. Sacco Jr., compared the Billboard No. 1 songs for every year between 1955 and 2003 with the changing U.S. social and economic climate during those years.

Published in Psychology of Music and focusing on the specific characteristics of songs, this study revealed that the most popular tunes during tough times were longer, slower, and more romantic, comforting, and meaningful. As Pettijohn explained to New York Times writer Tamar Lewin in 2008, “it’s ‘Bridge over Troubled Water’ and ‘That’s What Friends Are For.’ In better times, it’s more likely to be faster, more upbeat songs like ‘At the Hop’ or ‘My Sharona.’” 

Flying Off the Shelves

Grocery store and drugstore inventories also experience some interesting shifts as the economy ebbs and flows.

Leo Shapiro, the chief executive of Chicago consulting firm SAGE, told the New York Times: “During a recession, laxatives go up, because people are under tremendous stress, and holding themselves back. During a boom, deodorant sales go up, because people are out dancing around.”

Bob Holt, author of Views from the Cheap Seats, declares on his Web site, “Some products are bucking the recession and flying off store shelves. Sales of chocolate and running shoes are up. Wine drinkers haven’t stopped sipping; they just seem to be choosing cheaper vintages … Strong sales of Spam, Dinty Moore stew, and chili helped Hormel Foods Corp. post a 6% increase in first quarter sales in its grocery products unit … Profits in the first three months of 2009 at Hershey Co., the nation’s second-largest candy maker, surged 20 percent and beat Wall Street’s expectations. Kraft Foods Inc. reported double-digit growth in macaroni and cheese dinners—the consummate comfort food.” 

Dollars and Sense

During the current recession, Americans’ primary focus is on securing new jobs or holding on to the ones they have, shoring up their savings, and adopting no-frills spending habits—and rightfully so.

In times when we’re all just trying to get by, it’s not surprising that we don’t readily notice less overt details like dropping hemlines, out-of-stock signs where Pepto-Bismol should be on stores’ shelves, or the fact that the songs on constant rotation on our iPods aren’t upbeat dance music.

But the reality of the U.S. economy, with all its highs and lows, is that it leaves no stone unturned in this country’s retail and entertainment industries—for as the old saying goes, “When money talks, people listen.”

Financial Fallout: The Surprising Effects of a Recession was provided by DivineCaroline.com.