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This article casts a critical eye over the development of American psychiatry from 1980 to the present. It notes the rapid decline of psychoanalysis that followed the publication of DSM III; the rising influence of genetics and neuroscience; the re-emphasis on the biology of mental illness; and the collapse of public psychiatry that accompanied deinstitutionalization. It argues that while genetics and neuroscience have made scientific progress, the clinical utility of their findings to date has been very limited. The fifth edition of the DSM was supposed to base itself on this new science but that proved impossible. Diagnosis remains purely phenomenological and controversial. One of the ironies of research on psychiatric genetics is that has failed to find either a Mendelian origin of schizophrenia and depression or to validate the importance of hypothesized candidate genes. Genome-wide association studies have instead uncovered risk factors for major mental illnesses, but these overlap considerably, and the genetic associations are not dispositive. Most of those who carry these genetic variants do not develop mental illness. The status of psychopharmacology since the mid-1950s is scrutinized, as is the influence of the pharmaceutical industry on contemporary psychiatry, and the implications of its recent decision to abandon work in this arena. The paper concludes with an assessment of the crisis that it contends confronts contemporary American psychiatry: its overemphasis on biology; the urgent questions that persist about diagnosis and therapeutics; concerns about the directions of future research; and its inability to reduce the excess mortality that plagues the mentally ill.