How grandiosity and lack of empathy created our modern malaise.

There were other similarities between then and now that contributed to the emergence of the cultural narcissist. Both eras had presidents who were threatened with impeachment. Both eras had a vertiginous rise in housing prices. In the 1970s, homes became a rare anchor for embattled Americans as their most important asset became a refuge from rampant inflation.

For us later, our houses were the devil's candy to satisfy our insatiable needs. Instead of the last and most vital of our assets—the one protected from bankruptcy by homestead laws in many states—we used property as a grub stake in a poker match, hoping to win shallow advantages like better-looking kitchens, elaborate home theaters, and more authentic personal experiences. Each one of these desires fits neatly into the Lasch-ian definition of narcissism: the frantic need to distinguish ourselves without ever mastering our anxieties.

Lacking her own goals, and an independent measure of success, the narcissistic personality keeps chasing a fleeting dream. Perhaps that is why the debt bubble churned endlessly without restraint. We had everything, but it was never enough. Insatiability, of course, is a hallmark symptom.

Another era of adversity might have restored the bulwarks of our society. The excesses of the Internet boom were burned off in the scandals of Enron, Tyco, and the like. The Sept. 11 attacks also seemed to presage a new era of rationality. The Bush administration's response, however, was narcissism through and through. A sober response would have been to track down the malefactors to ensure that justice prevailed. Instead, the neocons in the Bush Pentagon pursued an unlikely target—Iraq—with the misguided idea that they could transform the politics of the Middle East through shock and awe. (Grandiose?) They even imagined they would be greeted as liberators. (Admiration seeking?) And they failed to address the root causes of Sept. 11 attacks: the frustrations felt by the disenfranchised toward the United States. (Not much empathy there, eh?)

So the flood of credit from 2002 on only fueled the narcissism raging at the center of our society. To read the Culture of Narcissism today is to look at ourselves through a distant mirror. We have a better communicator as president, but many of the same maladies confront us—a crippled economy, a recently discredited president whose White House was filled with dirty-tricksters, and a sense that American power no longer has a place in the world. The only good thing is that the feeling of desperation so pervasive during Jimmy Carter's time has not taken hold; but that could be because we just haven't hit bottom yet.