BAM Intelligence

How Our Fears About Money Could Swing the 2016 Election

I’m getting more questions about what this election will mean for people’s personal financial situations than I’ve received in any previous election that I can remember. Financial advisers almost twice my age tell me the same thing.

While I’m sure there are many reasons for these questions, I submit that the primary one is this: Our collective anxiety around money has never been higher. People are scared, and at the root of that fear is money (or the lack thereof).

In my travels during the last few years, from Rust Belt cities to thriving tech centers, I’ve conducted a straw poll consisting of a single question. I ask people to describe in one word how they feel about money. Almost universally, the word I hear is “scared.”

That answers makes sense when you examine it along with research done last year by the Pew Charitable Trusts. In a survey of almost 8,000 people, 57 percent said they’re not financially prepared for the unexpected. Fifty-five percent said they broke even each month or spent more than they made.

Let me reiterate that 57 percent of Americans feel unprepared financially. That’s not a fairy tale. It’s a reality. And it also happens to be enough people to win an election.

Financial anxiety isn’t limited to the poor, however you define that term. Chances are you’ve read or heard about Neal Gabler’s recent cover story for The Atlantic, “The Secret Shame of Middle-Class Americans.” Mr. Gabler points out another shocking statistic. According to an annual survey done by the Federal Reserve Board, 47 percent of respondents said that if they faced a $400 emergency, they would not be able to come up with the money or would have to cover the expense by borrowing money or selling something. He goes on to admit publicly that, as a member of the professional class, he too falls into that 47 percent.

When we view this election cycle through the lens of financial fear, some of the outlandish things happening in both parties start to make a little more sense. Look, people are scared. They are scared they’re going to lose their jobs to a robot. They are scared the factory down the street is going to move overseas. They are scared that taxes are going to become even more burdensome, or that their children won’t be able to afford to go to college or that they’ll have to take in their aging parents if they run out of money.

When we get scared, the natural reaction is to look for someone to blame, someone to fight or someone who can fix things. The question at the heart of this election just might be, “Who among the candidates will provide the necessary conditions for us to address our financial fears?”

As my 14-year-old son likes to say, “Good luck with that one.”

This commentary originally appeared June 20 on NYTimes.com

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© 2016, The BAM ALLIANCE


Carl Richards

The BAM ALLIANCE

Carl Richards is the creator of the weekly Sketch Guy column in The New York Times and is a columnist for Morningstar Advisor. Carl has also been featured in The Wall Street Journal, Financial Planning, Marketplace Money, The Leonard Lopate Show, Oprah.com and Forbes.com. His simple but meaningful sketches served as the foundation for his first book, “The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money.”

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