Fear Factor: This Is Your Brain in an Economic Crisis

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Shortcuts, for example, make us more prone to do whatever everyone else is doing — or whatever Jim Cramer tells us to do. "The brain cannot afford to re-evaluate on a millisecond by millisecond basis. So it will use other people's opinion as a proxy for its own," says Emory University neuroeconomist Gregory Berns, author of the new book Iconoclast: A Neuroscientist Reveals How to Think Differently.

To test this herd behavior, Berns and his colleagues hooked 32 people up to brain-imaging equipment and watched them reckon with a group opinion (about whether two shapes were the same or different) that was clearly false. They found that the brain worked to integrate the false opinion into its perception of the world. In other words, if other people start selling a stock you thought was valuable, you may want to do the same — at first.

In a state of high uncertainty, the brain wants most of all to do something — anything. "The natural urge, when we hurt, is to pull away," says John Forsyth, an associate psychology professor in the Anxiety Disorders Research Program at the University at Albany, SUNY. Unfortunately, doing something — like selling stock or drinking heavily at the office — can make things dramatically worse.

Happily, the brain's other defining characteristic is that it is flexible. Once we know our weaknesses, we can compensate for them. The part of your brain associated with conscious thought, called the prefrontal cortex, has a direct line into the amygdala and can quiet it down. This requires effort — and creativity. "The most productive thing is to recognize that it's natural to feel anxiety in the context of unpredictability. A rat would be going through the same stuff," says Forsyth, and he means that in a reassuring way. "And then sit with it. Do not let your feelings decide what to do. Feelings are fickle."

It may also help to consider what you will do if you do lose everything. Literally, what will you do first, second and third? Contemplating action can shrink the threat to life size and introduce new possibilities. "We become very attached to our mentally constructed future," says Forsyth. "The harder you hold on to your story about your future, the harder this will be."

After Fava jumped into the Schuylkill River in 1929, his brain finally had a threat it knew how to handle. He held fast to the piling until he was rescued by a river police boat. The police delivered Fava to the Presbyterian Hospital, where he was revived.