19 Jan, 09 | by Steven Reid, Evidence-Based Mental Health
The fall in share prices was unprecedented. His stocks were now worthless and the President of the New York County Trust Bank, J.J. Riordan, had lost a fortune. As the bank closed for the week, he took a pistol from a teller’s desk, went home and shot himself. The year however was not 2008, but 1929 and Riordan’s suicide followed the Wall Street Crash. Recent weeks have seen a number of modern day versions of this story reported in the press: on the 6th of January, a German billionaire, Adolf Merckle, threw himself in front of a train after his business empire was threatened with collapse. In December, Christen Schnor, HSBC’s head of insurance, was found hanging by a belt in the closet of a hotel room in London. Unsurprisingly, it’s a big story on the internet: have a look at the Daily Beast. You can even follow Greenspan’s Body Count, named after the former head of the Federal Reserve, keeping a grim tally of suicides (and murders) attributable to the financial meltdown. So are we on the verge of a ‘suicide epidemic’?
In my view certainly not, and comparisons with the Great Crash of 1929 are instructive. The US suicide rate in the months following the Crash actually declined when compared with the previous year, even in New York. Rates did rise in the following years, from 14 to 17 per 100000 between 1929 and 1933, although it’s by no means clear that this change was solely due to the Depression. The incidence of suicide had been increasing gradually for some years prior to 1929. In addition, some states only started reporting mortality statistics to the government during this period, and more of them were western states with above average suicide rates. Unemployment is associated with suicide but the relationship is not straightforward – factors such as social isolation and notably mental illness all add to the mix. Paradoxically, with a history of mental illness your risk of suicide goes up if you are in active employment or have a higher income. Changes in the suicide rate are more likely to be due to gradual changes in the economy, with unemployment growing from 3 percent to 25 percent during the Depression, than a specific response to the stock market Crash.
“…the newspapers and the public merely seize on such suicides as occur to show that people were reacting appropriately to their misfortunes. Enough deaths could be related in one way or another to the market to serve. Beginning soon after Black Thursday, stories of violent self-destruction began to appear in the papers with some regularity.” That was JK Galbraith writing in 1955 on the Great Crash. Take a closer look at Greenspan’s Body Count – how many of those suicides really are a direct consequence of the economic downturn?