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Gen Z’s brains are ‘growing around their phones’ the way a tree warps around a tombstone, ‘Anxious Generation’ author warns

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A global public health emergency driven by the swift transition from a play-based to a phone-based childhood has created a “global destruction of human flourishing” among young people, according to social psychologist Jonathan Haidt. The Thomas Cooley Professor of Ethical Leadership at NYU Stern, speaking at a recent Dartmouth–United Nations Development Program symposium on youth well-being, argued that children born after 1995—Gen Z—are fundamentally different from earlier generations because they experienced puberty amid omnipresent smartphones and social media.

Haidt, who previously explicated many of his thoughts about Gen Z in the New York Times bestseller The Anxious Generation, used a powerful metaphor to explain the neurological consequences of this change: tree roots. Saying they are great metaphors for neurons, Haidt explained that tree-root growth is structured by the environment where they are found. He referred to a picture of a tree growing around a Civil War–era tombstone, where the tombstone scratched the bark 100 years ago, and the tree adapted. The same is true for Gen Z, he argued: “Their brains have been growing around their phones very much in the way that this tree grew around this tombstone.”

Beyond mental health, Haidt said this has physical manifestations. Children are “growing hunched around their phone,” he said, with phone addiction literally “warping eyeballs,” leading to a global rise in myopia (shortsightedness). Screen time is also known to harm sleep, he added. He went on to describe the “great rewiring” of humanity, brought on by the smartphone.

A catastrophe of mental and physical health

This “great rewiring,” which Haidt places between 2010 and 2015, coincides with a synchronized global collapse in teen mental health. Haidt noted Gen Z is “suddenly much more mentally ill than the millennials,” primarily suffering from anxiety and depression.

The evidence of decline is seen in objective behavior, not just self-reporting. For instance, data tracking nonfatal self-harm among early teens (10- to 14-year-olds) shows the girls’ rate “more than quintuples” between 2010 and 2015. Around the world, wherever the internet is in kids’ pockets, Haidt argued, young people are becoming less happy and flourishing less.

The transition Haidt describes occurred in two acts. Act one involved the gradual decline of play-based childhood, which began in the 1980s. Act two was the arrival of a phone-based childhood, a sudden and universal shift that started in the early 2010s. Haidt summarized the tragic change by saying, “We have overprotected our children in the real world, and we have under-protected them online.”

The erosion of focus and meaning

The crisis extends into cognitive ability. Haidt points out, “Fifty years of progress ended in 2012” in educational achievement metrics, specifically the National Assessment of Education Progress, or NAEP, also called the “nation’s report card.” This decline suggests a “broader erosion in the human capacity for mental focus and application,” leading to what Haidt calls a “complete disaster for humanity”: a loss of that capacity. “We’re getting dumber exactly as our machines are getting smarter and taking over more areas of life,” he said.

Students themselves acknowledge the cognitive shift, according to Haidt. He related an anecdote from one of his students, describing the difficulty of reading: “I open a book, I read a sentence, I get bored, I go to TikTok.” Furthermore, he said, high school seniors increasingly report “life often feels meaningless.” Haidt connected this directly to the time spent online, adding that he can’t fully disagree: “If you’re spending five hours a day on social media, you’re not doing anything. Your life actually is meaningless.”

The paths to this “pit of despair” differ by gender. For girls, social media remains the “clearest culprit,” altering development, social relationships, and moods. For boys, the danger centers on a dopamine addiction crisis, with companies competing to “hook them” via highly addictive video games and increasingly available high-definition porn.

Haidt’s comments came as part of a symposium organized by Dartmouth economics professor David Blanchflower, whose work has previously been covered in Fortune. Most recently, he and University College London’s Alex Bryson found the midlife crisis has become a thing of the past, with a quarter-life crisis very real in reams of economic data. Young workers really are full of rising despair, their research found. Blanchflower told Fortune in September he’s “freaked” out by what his research is showing: “Suddenly young workers look to be in big trouble … Now, both absolutely and relatively, the young are worse off.” The midlife hump in despair, commonly known as the midlife crisis, used to be one of social science’s most important patterns, he added, and that’s over now.

The symposium occurred just weeks after an authority no less than Jerome Powell, chair of the Federal Reserve, acknowledged Gen Z is having an especially hard time in the economy of 2025. “Kids coming out of college and younger people, minorities, are having a hard time finding jobs,” Powell said in mid-September, at a press conference following the Federal Open Market Committee meeting.

The solution: Collective action

Haidt asserted the theory suggesting the rewiring of childhood is the only one that can account for the synchronized collapse in mental health globally. Given that this is a collective action problem, the solution must also be collective action, he argues.

Haidt proposed four key norms to reverse a phone-based childhood and restore the play-based model:

  1. Delay smartphone use: Give children a flip phone or simple phone until high school or age 14 internationally.
  2. Social media age limit: “No social media before 16,” Haidt stresses. “We are completely insane if we give puberty over to social [media].”
  3. Phone-free schools: Implement “bell-to-bell” policies, which teachers have welcomed, and studies are already showing raised grades.
  4. Promote independence and play: Encourage “far more independence, free play, and responsibility in the real world.”

Haidt stressed that although there will be a “permanent echo of diminished potential” in the generation that has already passed through puberty with these devices, “it’s not too late for individuals if they make an effort and they make it collectively.”

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. 



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Procurement execs often don’t understand the value of good design, experts say

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Behind every intricately designed hotel or restaurant is a symbiotic collaboration between designer and maker.

But in reality, firms want to build more with less—and even though visions are created by designers, they don’t always get to see them to fruition. Instead, intermediaries may be placed in charge of procurements and overseeing the financial costs of executing designs.

“The process is not often as linear as we [designers] would like it to be, and at times we even get slightly cut out, and something comes out on the other side that wasn’t really what we were expecting,” said Tina Norden, a partner and principal at design firm Conran and Partners, at the Fortune Brainstorm Design forum in Macau on Dec. 2.

“To have a better quality product, communication is very much needed,” added Daisuke Hironaka, the CEO of Stellar Works, a furniture company based in Shanghai. 

Yet those tasked with procurement are often “money people” who may not value good design—instead forsaking it to cut costs. More education on the business value of quality design is needed, Norden argued.

When one builds something, she said, there are both capital investment and a lifecycle cost. “If you’re spending a bit more money on good quality furniture, flooring, whatever it might be, arguably, it should last a lot longer, and so it’s much better value.”

Investing in well-designed products is also better for the environment, Norden added, as they don’t have to be replaced as quickly.

Attempts to cut costs may also backfire in the long run, said Hironaka, as business owners may have to foot higher maintenance bills if products are of poor design and make.

AI in interior and furniture design

Though designers have largely been slow adopters of AI, some luminaries like Daisuke are attempting to integrate it into their team’s workflow.

AI can help accelerate the process of designing bespoke furniture, Daisuke explained, especially for large-scale projects like hotels. 

A team may take a month to 45 days to create drawings for 200 pieces of custom-made furniture, the designer said, but AI can speed up this process. “We designed a lot in the past, and if AI can use these archives, study [them] and help to do the engineering, that makes it more helpful for designers.” 

Yet designers can rest easy as AI won’t ever be able to replace the human touch they bring, Norden said. 

“There is something about the human touch, and about understanding how we like to use our spaces, how we enjoy space, how we perceive spaces, that will always be there—but AI should be something that can assist us [in] getting to that point quicker.”

She added that creatives can instead view AI as a tool for tasks that are time-consuming but “don’t need ultimate creativity,” like researching and three-dimensionalizing designs.

“As designers, we like to procrastinate and think about things for a very long time to get them just right, [but] we can get some help in doing things faster.”



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Binance has been proudly nomadic for years. A new announcement suggests it’s chosen an HQ

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For years, Binance has dodged questions about where it plans to establish a corporate headquarters. On Monday, the world’s largest crypto exchange made an announcement that indicates it has chosen a location: Abu Dhabi, the capital of the United Arab Emirates.

In its announcement, Binance reported that it has secured three global financial licenses within Abu Dhabi Global Market, a special economic zone inside the Emirati city. The licenses regulate three different prongs of the exchange’s business: its exchange, clearinghouse, and broker dealer services. The three regulated entities are named Nest Exchange Limited, Nest Clearing and Custody Limited, and Nest Trading Limited, respectively.

Richard Teng, the co-CEO of Binance, declined to say whether Abu Dhabi is now Binance’s global headquarters. “But for all intents and purposes, if you look at the regulatory sphere, I think the global regulators are more concerned of where we are regulated on a global basis,” he said, adding that Abu Dhabi Global Market is where his crypto exchange’s “global platform” will be governed.

A company spokesperson declined to add more to Teng’s comments, but did not deny Fortune’s assertion that Binance appears to have chosen Abu Dhabai as its headquarters.

Corporate governance

The Abu Dhabi announcement suggests that Binance, which has for years taken pride in branding itself as a company with no fixed location, is bowing to the practical considerations that go with being a major financial firm—and the corporate governance obligations that entails.

When Changpeng Zhao, the cofounder and former CEO of Binance, launched the company in 2017, he initially established the exchange in Hong Kong. But, weeks after he registered Binance in the city, China banned cryptocurrency trading, and Zhao moved his nascent trading platform. Binance has since been itinerant. “Wherever I sit is going to be the Binance office,” Zhao said in 2020.

The location of a company’s headquarters impacts its tax obligations and what regulations it needs to follow. In 2023, after Binance reached a landmark $4.3 billion settlement with the U.S. Department of Justice, Zhao stepped down as CEO and pleaded guilty to failing to implement an effective anti-money laundering program.

Teng took over and promised to implement the corporate structures—like a board of directors—that are the norm for companies of Binance’s size. Teng, who now shares the CEO role with the newly appointed Yi He, oversaw the appointment of Binance’s first board in April 2024. And he’s repeatedly telegraphed that his crypto exchange is focused on regulatory compliance.

Binance already has a strong footprint in the Emirates. It has a crypto license in Dubai, received a $2 billion investment from an Emirati venture fund in March, and, that same month, said it employed 1,000 employees in the country. 



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Leaders in Congress outperform rank-and-file lawmakers on stock trades by up to 47% a year

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Stocks held by members of Congress have been beating the S&P 500 lately, but there’s a subset of lawmakers who crush their peers: leadership.

According to a recent working paper for the National Bureau of Economic Research, congressional leaders outperform back benchers by up to 47% a year.

Shang-Jin Wei from Columbia University and Columbia Business School along with Yifan Zhou from Xi’an Jiaotong-Liverpool University looked at lawmakers who ascended to leadership posts, such as Speaker of the House as well as House and Senate floor leaders, whips, and conference/caucus chairs.

Between 1995 and 2021, there were 20 such leaders who made stock trades before and after rising to their posts. Wei and Zhou observed that lawmakers underperformed benchmarks before becoming leaders, then everything suddenly changed.

“Importantly, whilst we observe a huge improvement in leaders’ trading performance as they ascend to leadership roles, the matched ‘regular’ members’ stock trading performance does not improve much,” they wrote.

Leadership’s stock market edge stems in part from their ability to set the regulatory or legislation agenda, such as deciding if and when a particular bill will be put to a vote. Setting the agenda also gives leaders advanced knowledge of when certain actions will take place.

In fact, Wei and Zhou found that leaders demonstrate much better returns on stock trades that are made when their party controls their chamber.

In addition, being a leader also increases access to non-public information. The researchers said that while companies are reluctant to share such insider knowledge, they may prioritize revealing it to leaders over rank-and-file lawmakers.

Leaders earn higher returns on companies that contribute to their campaigns or are headquartered in their states, which Wei and Zhou said could be attributable to “privileged access to firm-specific information.”

The upper echelon also influences how other members of Congress vote, and the paper found that a leader’s party is much more likely to vote for bills that help firms whose stocks the leader held, or vote against bills that harmed them. And stocks owned by leadership tend to see increases in federal contract awards, especially sole-source contracts, over the following one to two years.

“These results suggest that congressional leaders may not only trade on privileged knowledge, but also shape policy outcomes to enrich themselves,” Wei and Zhou wrote.

Stock trades by congressional leaders are even predictive, forecasting higher occurrences of positive or negative corporate news over the following year, they added. In particular, stock sales predict the number of hearings and regulatory actions over the coming year, though purchases don’t.

Investors have long suspected that Washington has a special advantage on Wall Street. That’s given rise to more ETFs with political themes, including funds that track portfolios belonging to Democrats and Republicans in Congress.

And Paul Pelosi, former House Speaker Nancy Pelosi’s husband, even has a cult following among some investors who mimic his stock moves.

Congress has tried to crack down on members’ stock holdings. The STOCK Act of 2012 requires more timely disclosures, but some lawmakers want to ban trading completely.

A bipartisan group of House members is pushing legislation that would prohibit members of Congress, their spouses, dependent children, and trustees from trading individual stocks, commodities, or futures.

And this past week, a discharge petition was put forth that would force a vote in the House if it gets enough signatures.

“If leadership wants to put forward a bill that would actually do that and end the corruption, we’re all for it,” said Rep. Anna Paulina Luna, R-Fla., on social media on Tuesday. “But we’re tired of the partisan games. This is the most bipartisan bipartisan thing in U.S. history, and it’s time that the House of Representatives listens to the American people.”



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