The S&P downgrade of the U.S. credit rating has spawned increased criticism and analysis of President Obama’s apparent reluctance — or inability — to confront the Republican opposition or push for major investment in infrastructure and jobs. Among the most vocal are Labor Secretary Robert Reich, psychologist Drew Westen, and MSNBC’s Chris Matthews.

All of them offer good, concrete recommendations for how Obama could demonstrate the leadership and a clear action program that his supporters have been waiting and longing for. They offer plausible explanations of why he isn’t doing that. More broadly, it’s also useful to understand what fuels a growing sense of unraveling throughout our country (a current poll finds 79% dissatisfied with our political system); and, increasingly, around the globe.

One way to do that is by recognizing some psychological drivers of the polarization — around the role of government, and in the opposition to forging reasonable, compromise-based solutions to problems. I think a major psychological source originates in people’s responses to the crumbling of an overall way of life that’s pretty much predominated throughout the 20th Century — in business and at work; in personal life goals and relationships; and in social and public policy. It’s themes are embracing self-interest and selfishness; domination of some groups by others; and control of resources by the few at the expense of the larger society’s needs.

That worked fairly well in the 20th Century; or at least it was accepted, with all its inequities. But today, people sense that their old way of life just isn’t working. And it’s not. Today, we’re plunging headfirst into a new reality — and no leader has really articulated it or helped people understand how to deal with it.

That is, the world is transforming in ways that require shifting away from the short-term self-interest that’s defined our way of life. The 21st Century world — the post-9-11, post-2008-economic-meltdown world — is highly interconnected, unstable and fluid. For example, economic strategist Umair Haque has pointed out that our business, social and economic institutions have become obsolete; they are set of ideas inherited from the industrial age of the 20th century. He argues that they no longer work for business, people, society, or the future. The old “business as usual” model has outgrown the old paradigm of short-term growth, competition at all costs, adversarial strategy, and pushing costs onto future generations. What he describes about business can also apply to values and behavior in personal lives.

And on a larger scale, Fareed Zakaria emphasizes that the new era is one in which the United States will no longer dominate the global economy, orchestrate geopolitics, or overwhelm cultures. He sees the “rise of the rest” — the growth of countries like China, India, Brazil, and Russia — reshaping the world. That shift, in turn, poses a new challenge of how the U.S. can understand and thrive in a rapidly changing international climate.

Success and stability in the new, evolving era requires letting go of the old mentality and orientation that was driven primarily by self-interest and its ultimate expression, greed; and instead, creating ways to serve the larger, social good. That means some form of sacrifice for the greater benefit of all lives.

The Psychological Impact

Dealing with these shifts can have frightening impact. Any highly disruptive change can result in feeling unmoored and uncertain about your future. The values, beliefs and vested interests that we’ve acquired and absorbed have brought material success to many, and stirred aspirations in others. But we’ve reached a tipping point in that respect. A culture that’s valued and rewarded accumulating the fruits of business success and the resources of the planet for oneself; for purposes of primarily self-interest — whether individuals or corporations — is not adaptive to the needs of the 21st Century world.

The new reality is that giving primacy to self-interest in the way that’s predominated in personal and public life will undermine both individual and societal wellbeing. Recognizing this can open the door to creative solutions to problems based more on an orientation to the common good. Or, it can generate very regressive, unhealthy, fear-based responses.

That is, when the values you’ve absorbed, believed in and lived for; and have defined who you are — including what a successful life is supposed to be — no longer work as they have, that creates conflict. You have practical problems (how do I deal with this, or restore my life to how it’s always worked?) and psychological problems: fearing loss of identity, of self-worth. Helplessness in the face of unknown forces. Unanticipated stress or insecurity in your relationships. Confusion or fear about the influx and expectations of people who think, behave, look and believe differently from what you’ve always known and are accustomed to.

These new conflicts and fears can result in two unproductive and unhealthy responses:

First, Fears and threats can create a powerful emotional backlash that overwhelms reason, judgment and empathy. That is, strong fears can activate the “primitive” part of the brain, the amygdala, and drive you into the classic “fight” or “flight” response: Either run away from the danger, or attack it.

Such powerful emotional responses overwhelm the functioning of the frontal lobes and pre-frontal cortext, regions of the brain associated with our inborn capacity for judgment, rational problem-solving, flexibility, and the capacity for organized thinking. They can inhibit the expression of the inborn capacities for empathy and altruism.

Regarding the latter, research finds that social class can also inhibit empathy when it’s linked with excessive self-interest. A recent study found that upper class people demonstrate less empathy than lower class people. The two groups have the same innate capacity for empathy, but it appears that upper class people tend to be more lulled into self-absorption and selfishness, while members of the lower classes, who deal more with survival within diminished economic and work opportunities, may be more “connected” empathically to others’ emotional and material needs.

The second response to fears and threats, when they activate more primitive “fight or flight” behavior, is seeking the “safety” and “security” of escapist solutions. For example, retreating into a fantasy land of outright denial of what’s changing in front of your eyes; or attempting to destroy those who represent it.

That can lead to viewing the “other” with fear, resentment, irrational anger, or refusal to compromise around differences for a common goal. Or, aggressive assault to destroy that which embodies the changes that threaten your way of life. We see all three at work in the fear-based responses to the massive changes underway, especially the growing need to serve the greater good, not just one’s own selfish interests.

• Escapism, such as expressed by those who speak about the need to “take back America;” or isolationist, cult movements and conspiracy theories.

• Denial of factual reality, by politicians and others who deny climate change, often for fear of loss of financial interest; or as in Michele Bachman’s insistence that the founding fathers worked to abolish slavery.

• Aggressive actions intended to intimidate and render impotent, if not destroy outright, the opposition or those who embody various feared changes — gays, immigrants, minorities, or those who advocate eliminating tax loopholes and ending tax breaks for the ultra-rich.

Our Absentee Leadership

Understanding some of the psychological threads of our current crisis points to three leadership needs:

• The need to confront and expose destructive, irrational and extreme ideological goals that are promoted as a desirable agenda; and clearly repudiate them.

• The need to address and articulate with empathy the concerns, fears and sense of loss of people drawn to the Tea Party movement, or others who advocate solutions that fail to serve the common good. Help them see a different path that will benefit themselves and others.

• The need to clearly articulate the programs and actions required of all — in individual lives, in communities, and in national policies that will build long-term well being, growth and security for the society.

Much of the current criticism of Obama is that he does none of those very well.

And that’s a lost opportunity, because showing the way towards greater wellbeing for all is not only consistent with the best of American values; it’s essential to survive and thrive in this tumultuous era.

This was originally published in The Huffington Post.