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Last week, in the wake of the near-implosion of mortgage insurer Fannie Mae, and with rumours swirling about the fate of Lehman Brothers, where the stock has plummeted 70 per cent, I got an email from a friend. Instead of his usual pithy jokes, he sent me his investment fund's second-quarter report. It read: "Even as sceptics, we were amazed that the Federal Reserve kept interest rates so low for so long, that Congress and the Administration spent money so flagrantly, that lenders reduced their credit standards to such lax levels, and that consumers continued spending as their economic prospects dimmed. The world is now feeling the downside of such profligacy, and there is likely more bad news to come."
The pressing question, as I look around, is at what cost to us is this bad news - not just in economic terms? Bruce Yaffe, MD, who has a practice at Lenox Hill Hospital, notes that he is seeing a surge in stress-related illnesses. Dr John Ryder, a New York stress-management specialist, says he is seeing more people resorting to pills and alcohol.
These findings do not surprise me. Financiers tell me they spend their days looking at screens reflecting market movements, unable to work. Worst affected are former middle-aged employees at Bear Stearns, which collapsed in March. They saw a lifetime's savings in stock wiped out. But people in every sector fear they could be laid off at any second.
Friends at Paramount suddenly got axed when Deutsche Bank pulled its film financing last week. Advertising revenues are down. "Flat is the new up" is the new joke in publishing. It's not really that funny. College graduates are being told they no longer had the job they thought they had locked up for September. Small wonder that walking down Madison Avenue is like being in a ghost town. Divorce rates are up; personal trainers are losing their clients.
The toll of all this is unguessable. Physical breakdown occurs after two years of major stress, according to the sociologist Alvin Toffler. Two years ... by then George W. Bush,whose "flagrant spending" my friend wrote about, won't be in office to be held accountable.
* Vicky Ward is a contributing editor of Vanity Fair
