Myth and Identity

September 13, 2026

By Stephen Stofka

Last week I wrote about the role of memory in constructing our sense of self, our self-coherence. This week I want to explore further how we use our memory to shape our identity. We forget most of what happens to us during our lives, yet people suffering with PTSD struggle with portions of a gruesome experience that they do not forget. What is the mechanism there? Is there something to be learned?

Fragmented

Until I started doing some research for this topic, I thought that people with PTSD simply could not get rid of the memory of a traumatic event. That’s only partially true. PTSD sufferers may remember only flashes of a disturbing event (Source). A memory remnant like a sight, sound or touch evokes a terrifying and emotional reaction in someone suffering from PTSD, but the sufferer can’t remember the entirety of the experience. That can make it difficult to work through the experience with a trained psychologist.

The traumatic experience itself is not entirely the cause of the reaction. The amygdala, the primal organ of the fear response in our cortex, often becomes enlarged in response to earlier trauma, particularly repeated trauma, writes neuroscientist Robert Sapolsky (2023, p. 110). We become especially sensitized to traumatic experience. The prefrontal cortex, which helps mediate the primitive fear or flight response in the amygdala, begins to atrophy under repeated stress or trauma. In short, the “brakes” don’t work as well.

Soldiers in battle sometimes perform inhumane acts. It may be in angry retribution, or from existential fear for one’s survival, or robotically carrying out the orders of a superior officer. Take two soldiers. One soldier sets the memory of a war atrocity in a separate frame divorced from normal living. War is hell. Try to minimize the atrocities and try to survive.

Another soldier can’t forget the scream of some villagers trapped by fire in an underground tunnel. He looks in the mirror and sees someone wearing a black hat, someone who has inflicted moral injury. The scream wakes him up in the middle of the night. The squeal of air brakes on a semi-truck can transport him thousands of miles away to that day when…

The forgetting that we all do each day doesn’t seem to be deliberate, something that we consciously control. Consider victims of an earthquake who are found after being trapped for days in the rubble of a fallen building. The sense of prolonged loss and helplessness provokes a range of PTSD symptoms in the survivors. They may have difficulty falling asleep, experience a heightened level of anxiety, and are more likely to feel depressed and suicidal (Source). Forgetfulness would be a blessing, an apt survival strategy, but memory fragments of the experience persist long after the trauma. Victims may try to induce forgetfulness with alcohol, but that only gives them a new set of problems.

Flow State

In 1975, psychologist Mihaly Csíkszentmihályi coined the term flow state to describe a state of altered consciousness where someone is so engrossed in a task that their self-awareness is reduced. Normally, we are concerned about how we are perceived by others. Our self-consciousness is a social consciousness. In a flow state, we lose that concern about how we appear. We become absorbed in the activity and may have a distorted sense of time, not unlike what we experience during dreaming. Twenty minutes may pass and it seems like two minutes or shorter (Source).

In a flow state, one is freed inside the experience. In a trauma state, one is trapped inside the experience. If a person were in a flow state for their entire lives, would they have lived a full life? After a gig, a jazz musician may feel a sense of satisfaction, or camaraderie, and a sense of no longer being connected to something for which they have no words. They may have few memories of portions of the performance.

Ten years before the introduction of the flow state, Alan Watts wrote The Book: On the Taboo Against Knowing Who You Are. Watts introduced readers to Zen Buddhism, Hindu and Chinese philosophy. The western philosophical tradition regarded the self as an agent and observer separate from the world. In the Hindu and Vedantic tradition, each of us was part of what we experienced (Source). Were we like amoebas, changing our shape as we absorbed new experiences, casting off parts of ourselves as we grew? Was self-consciousness a myth? How did that affect a person’s self-identity?

Practice, practice, practice

There have been two dominant theories of what occurs during a flow state. In the first theory, two brain networks synchronize. The default mode network is active when a person is daydreaming or reminiscing. The executive control network, located in the front of the brain, orchestrates the activity and ideas that the default mode network produces.

In the second theory, repeated practice of a skill or activity causes the brain to develop a network of neural pathways to perform that activity with little conscious supervision. In a flow state, the executive control network relaxes its control, allowing this specialized network to take over. A 2024 study of neural activity by Rosen et al. gives more credence to the second theory (Source).

Identity Sculpting

Unlike individuals, the sculpting of cultural memory requires planning and coordination. In his 1953 book Fahrenheit 451, Ray Bradbury wrote about a society where firemen do not put out fires, but set them, burning piles of books which have been made illegal.

After a surge of immigration to America from 1880 to 1910, some Americans wanted to shape the country’s character into a Protestant ethic of strict morals and hard work. People have long used alcohol as a way to smooth the anxieties of social interactions, to soothe the discomforts of daily life, and forget life’s troubles. But some believed that alcohol consumption undermined family cohesion and individual character.

The passage of the 18th Amendment made the sale of alcohol illegal from the beginning of 1920 to the end of 1933, when the amendment was repealed. Instead of burning pyres of books, authorities broke bottles of booze before the cameras. They destroyed homemade stills, kegs of beer and casks of wine. During the fourteen years of Prohibition, organized crime rose to power to supply a demand for alcohol.

The culture sculptors may have lost one battle but continued to fight. At the heart of American exceptionalism is the myth of American purity. Shortly after Prohibition ended, the Hays Code went into effect. This code prohibited suggestive behavior on screen and regulated the depiction of violence in movies (Source). In 1935, a year after the Hays Code went into effect, federal agents burned a copy of the movie Ecstasy, featuring the film star Hedy Lamarr. Ever protective of public morals, officials considered the movie obscene because it portrayed the face of a woman experiencing orgasm (Source).

National Identity

National identity is shaped through the building of a myth, a narrow focus on a few characteristics and the exclusion or blurring of a lot of history. This narrow focus is similar to the mechanism of PTSD but it is quite deliberate. I will use some examples from American history but the building of a national myth is common to many nations.

Individual freedom was a core characteristic of the founding myth of the United States, yet one out of six people counted in the 1790 census was enslaved (Source). We fashion ourselves a democracy yet the founders feared democracy as unstable, subject to the passions of the mob. Instead they created a republic where only those with property and money could vote. Even though we have extended the voting franchise, the structures of the executive, legislative and judicial branches empowers a select few to make key decisions.

Exceptionalism

The people of many countries and all major powers consider themselves exceptional. In a 1998 interview, then Secretary of State Madeleine Albright characterized the United States as the “indispensable nation. We stand tall and we see further than other countries into the future, and we see the danger here to all of us” (Source). Her comment reminded some of the passage in the gospel of Matthew when Jesus tells his disciples, “You are the light of the world. A city on a hill cannot be hidden” (Matthew 5:14).

Jesus preached peace through example. Albright preached peace through force. She argued that America had a right to use force around the world to protect “freedom, democracy and the American way of life.” Since World War 2, America has overthrown several democracies in Argentina (Source), Iran (Source), Nicaragua (Source), and the Congo (Source). After the fall of the Soviet Union, the United States stood atop the mountain. It would play the role of the philosopher king, the benign hegemon of a new world order, an international community of democracies.

However, several other countries saw America’s domination as an existential threat. Through the centuries, various European countries had taken their turn imposing their rules and culture on others. Before America took the lead, the British had dominated world trade. The Chinese still remember the century of humiliation by the British and other foreign powers beginning in the 1840s (Source). For a hundred years, first the British, then the Americans dominated the government of Iran (Source). The people of these countries remember and resist attempts at continued domination.

Today, we are living with the legacy of self-righteous violence, of endless foreign wars. In September 2002, President Bush declared a policy of pre-emptive war known as the Bush Doctrine. The suspicion of a threat was reason enough to attack any country and was the justification for the war against Iraq (Source). Our leaders maintain the myth of America as Crusaders for democracy, freedom and justice and we employ vast resources to market that myth.

We have a powerful military that has been unable to win any of the wars we have started since World War 2, except for the limited engagement of the 1991 Gulf War. We have several hundred military bases around the world capable of wrecking destruction, but it is China who is the aggressor nation, not America. We have attacked Iraq and Iran, who do not have nuclear weapons, because we think they would use nuclear weapons if they had them. However, we shake hands with the brutal dictator of North Korea who stands ready to use nuclear weapons against South Korea or Japan.

To construct a group identity from these circumstances and history requires a lot of coordinated forgetting, or at least of blurring of events. Next week, I want to explore that collective forgetting. I hope to see you then.

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Photo by Oleksandr Sushko on Unsplash

Sapolsky, R. M. (2023). Determined: A science of life without free will. Penguin Press.

The Fed Feints

September 18, 2016

This week I’ll cover several topics, most of them concerning personal finances.

Social Security and COLA

 Sometime in mid-October the Social Security Administration (SSA) will announce the cost-of-living adjustment (COLA) for social security benefits in 2017 and it will probably be less than 1% (History of previous COLA adjustments).  The COLA is based on the year-over-year increase in the Consumer Price Index (CPI).  In 1982, Congress specified that the SSA use the CPI version for urban workers, called CPI-W. (Info from SSA).  Each month the BLS releases their estimate of inflation, and this week they published their calculation for August – a yearly increase of just .66%.  September’s inflation number may be slightly different but the reality for the average SS recipient is a monthly increase of less than $10 in the average benefit of $1340.

Gas prices fall

For years senior advocacy groups like AARP have argued that a different CPI measure should be used to calculate the COLA.  The alternative measure, the CPI-E, puts more weight on health care expenses and less weight on gasoline and transportation costs because seniors don’t drive as much. So far, Congress has not adopted any changes to the methodology of calculating inflation for retirees.

In late 2014 gasoline prices began to fall and this had a significant impact on measured inflation in 2015, as we can see in the chart below. Although gas prices remain low, they have stabilized so that they will have less of an impact on yearly inflation growth in the future.

Reaching For Yield

Investors who are reliant on the income from their investments, including giant pension and endowment funds, typically desire fairly safe investments that will give them a decent return while preserving their principle.  These include high grade corporate bonds (Johnson and Johnson, for example), Treasury bonds, CDs and savings accounts. Abnormally low interest rates have made those traditional investment choices less desirable.

Like a stream diverted, investors have wandered to riskier assets, bidding up the prices of stocks which are considered more likely to retain their value because they pay dividends.

Dividend ETFs 

 As one example, Vanguard’s VIG is a Dividend Appeciation ETF containing of stocks that  have a consistent record of dividend growth of almost 5% per year.  The growth rate is 5%, not the dividend yield. The companies in this basket are household names: Johnson and Johnson, Microsoft, Pepsi, McDonald’s, and Walgreens, to name a few.  Vanguard has an added benefit: a very low expense ratio.  At the end of August, the Price-Earnings (P/E) ratio on this basket of stocks was 24.5 (see here). In the first two weeks of September, the prospect of an interest rate hike in the next few months has put a small dent in the price, and lowered the PE ratio slightly.  Clearly, investors are willing to pay extra for income, and extra for reliability.  The yield on this basket of reliability is 2.1%, just .4% more than a 10 year Treasury.

DVY

iShares’ DVY is a popular dividend ETF that has a less selective basket of stocks.  This basket also includes oil and energy companies that have a 5 year record of paying dividends but may not have a consistent record of dividend growth because of declining oil prices.  Because the criteria is less restrictive, this ETF is cheaper – it has a higher yield of 3.2% and a lower PE ratio of 20.8.

The Fed

After eight years of near zero interest rates, the Federal Reserve has put itself in a corner. Whatever actions or adjustments it takes must be in small increments to avoid causing a sudden repricing of the very asset prices it has helped lift by maintaining a low interest rate environment.

The financial crisis was so severe that the Fed thought it must lower rates to near zero, which choked income flows from savings.  Such a policy could be justified as an emergency measure. The economy had suffered the equivalent of a heart attack and the Fed need to shock it alive.  However, the recovery that followed was so weak that the Fed thought it must continue to keep rates low.  After eight years of ZIRP (Zero Interest Rate Policy), the Fed finds that it has effectively been picking winners and losers. Debtors win, savers lose. The Fed was forced into the role by the inability of a bitterly divided and ineffective Congress to pass fiscal policy solutions.

To fully grasp the effects of Fed policy, let’s take a trip up into the mountains.  Imagine a high mountain lake reservoir with a dam at one end to contain the water.  On the mountains surrounding the lake falls snow and rain that drains into the reservoir.  The dam is opened enough so that it releases a measured stream of water for users downstream.  The lake is a stock. The release of water is a flow.

Now let’s say that there is a drought for a year or two.  The water level in the reservoir begins to fall.  The dam operators reduce the amount of water released and this has a negative impact on downstream farms and businesses who depend on the water. The price for water rises as farms and businesses bid to get more water, a simple case of supply and demand. Land, another store of value, decreases in value because the lack of adequate water has made the land less productive. Assuming the same demand, prices for produce from the land rises.  This is the flow from the land, So the flow from the land rises while the stock value of the land falls.  Water is a different kind of asset, a consumable.  In the case of water, both the flow and the stock value rise during a drought.

Eventually the rainfall increases and the reservoir refills with water.  Now the dam operators release more water and the price per unit of water naturally declines. Now the stock value and the flow value of the water have declined. A greater supply of produce leads to price declines in the flow of produce from the land, while the price of the land itself, the store of land’s value, increases in anticipation of more productivity from the land.

After the crisis is over, flows from both types of assets declines.  The extra stock value of the water is transferred back to the land. The flow of water from the reservoir has been the catalyst for this transfer of value.

Let’s take this simplified situation and use it as an analogy to understand the Fed.  When the Fed adjusts interest rates, it transfers a store of value from one asset class to another. (It involves a number of asset classes.  I’ll keep it simple.) That’s the transfer of stock value.  But there is also a raising or lowering of the price of the flows from each of those assets.

Now let’s imagine that the Fed raises interest rates by 1%, effectively opening up the dam’s sluice gates a little more.  The flow of income shifts from debtors, who must pay more for borrowed money, to savers, who receive more for their savings.  Debt is a store of value and this is where the transfer of value happens.  New debt competes with old debt and lowers the price of existing debt, both corporate and government, so that old debt can generate the same income flows as new debt. Assets like bonds, which generate income flows at lower interest rates are now worth less.  Why buy a safe bond paying 2% when I can buy a safe bond paying 3%?  Dividend paying stocks are worth less unless they can realistically increase their dividend to compete with higher interest rate expectations. Buyers and sellers of these instruments adjust the prices to reflect the new expectations.

The change in flows acts as a catalyst for the transfer of the stock values between assets.  When we are younger and working, we don’t pay much attention to income flows from our savings.  We look at our portfolio statements, check our 401K or savings balances to see how much of a stock of assets we have built up.  We measure these assets in dollars, not value and may come to think that dollars and value are the same.  Income flows are measured in dollars.  The stock those flows come from are measured in value.  In the future, I hope to explore the ways that we try to convert value to dollars.