For three long years since the financial crisis began, American politics has been dominated by the politics of projection, displacement and denial - three basic subconscious ego defence mechanisms that are tremendously powerful in defending the indefensible. On the personal level, such defence mechanisms - analysed by Anna Freud in her 1937 book, The Ego and the Mechanisms of Defence - protect the ego from conflicts that seemingly threaten its destruction, or at the very least weaken its foundations. They are, in a sense, helpful and adaptive at an early stage, since ego survival is a precondition for everything else. But they can take on a life of their own, “protecting” the ego from things that must be dealt with in order to grow as it should. The same is true when these mechanisms function socially, “defending” large groups of people - even whole civilisations - against facing up to their most important challenges, and preventing them from resolving conflicts that threaten to destroy them.

Such has been the establishment's response to the financial crash of 2008 and its ongoing repercussions until now. In one short month, Occupy Wall Street has begun to change all that. While Occupy Wall Street is purportedly raucous, incoherent, and lacking in clarity, it has done more than anything else in the past three years to begin stripping away the dangerously irrational nonsense protected by and embodied in those three social defence mechanisms. In the wake of its global coming out day on October 15, it is a good idea to take stock of this remarkable accomplishment.

Defence mechanisms

First, we need to consider what happened, and how those in power have tried to make it go away. What happened, in short, was the biggest financial crisis since the Great Depression. Financial crises are built into the very nature of financial systems, as shown by the historical record compiled by Carmen Reinhart and Kenneth Rogoff in This Time It's Different: Eight Centuries of Financial Folly, and as explained by the late Hyman Minsky's financial instability hypothesis. This historical fact has long been denied by free market ideologues, and their faith has grown particularly strong since the dissolution of the Soviet Union. That is why, in part, the US has destroyed almost all of its regulatory structures that could have and should have limited the scope of this most recent crisis, if not prevented it entirely.

Denial is, conceptually, the most basic of defence mechanisms - the refusal to accept external reality, and/or one's own reactions to reality. And that is what I've just described - a breath-takingly broad example of denial. When people try to pretend that tens of millions are out of work because there is something wrong with each of them, individually, rather than with the economy as a whole, this too is an example of massive denial.

All of the most basic defence mechanisms involve denial in some way or another. They can be thought of as denial plus some further means of handling the threat that is being denied. Both displacement and projection involve blame-shifting as a strategy of threat-management, but have differing dynamics.

Projection is less about denying external reality than denying how one responds. The negative responses being denied are projected onto another. Glenn Beck, for example, projects his own racism onto Barack Obama, claiming without a shred of evidence that Obama harbours a "deep seated hatred of white people" - against people such as his mother and maternal grandparents, one can only assume. Colloquially, it's often referred to as "the pot calling the kettle black". 

Protesters arrested in anti-Wall Street rally

Racism invariably involves projection - all manner of undesirable traits are projected onto the racial “other”, thus making it “entirely reasonable” to treat them differently. For example, it is commonplace for subordinate racial groups to have the hardest, worst-paying jobs, and to regularly be accused of being lazy. In the extreme, slave owners have always complained about how lazy their slaves are. By the same projection-based “logic”, in today's “post-racial” America, it's blacks and latinos who are racist.

Displacement also involves blame-shifting, but in a different way: it is the external source of anxiety that is shifted from the more threatening object that constitutes a real threat to a substitute object that's safer to blame, even punish. A man's boss yells at him at work; he comes home and kicks the family dog. That is displacement.

Of course the two can work in tandem. If the man kicks the dog “because it was going to bite me”, that's both displacement and projection. Similarly, if Wall Street crashes the economy, and some state passes draconian anti-immigration laws, that, too, is both displacement and projection. The same is true if budgets are slashed because of a depressed economy, and then teacher's unions are blamed for the budget gap. Displacement is most likely to occur as a direct result of overwhelming economic and political power. Those with real power don't just tend to get their way, they tend to get their way as if it were their incontestable right.

This has been the primary dynamic since the financial crisis began in September 2008: the Wall Street banks that crashed the economy have not only been made whole, they've recovered much faster and better than anyone else, flourishing now as if nothing had happened. The losses they created have been absorbed by the public sector, by other private industrial sectors, and by households who've lost more than a trillion dollars in household wealth, as housing values have collapsed, leaving tens of millions with underwater loans.

So long as this situation persists, the potential for projection skyrockets. Displacing blame from Wall Street onto other, less powerful targets creates a powerful incentive to project, just like the man yelled at by his boss, who wants to kick his dog to relieve his frustrations. Ordinarily, he would not kick his dog, but under such duress, projecting his own dark thoughts onto his dog gives him permission to strike out. And so he compounds displacement with projection, and lashes out for temporary relief that is doomed to leave him unsatisfied, if not ashamed of what he has done. Such is the unhappy situation that more and more Americans find themselves in - along with hundreds of millions more around the world.

This is what Occupy Wall Street offers the chance to end: stop the displacement by placing the blame where it belongs, and the pressures driving projection will plummet. Beyond that lies the possibility of taking on denial more generally, and developing an understanding, free from these defence mechanisms, about how to create a better, fairer sort of future. Of course those who deserve that blame will not like this one bit. They will scream bloody murder - or, rather, make sure that others scream for them. But, as has been pointed out repeatedly, the top one per cent got along just fine in the 1950s with 91 per cent marginal tax rates and nine per cent of the national income, when America's middle class was thriving and filled with optimism. That is not hair-shirt territory, by any means.

'Occupy' vs the Tea Party

As Occupy Wall Street has grown, there have been a growing number of comparisons between it and the Tea Party. Francis Fox Piven, offered one of the briefest, no-nonsense accounts, contrasting them as inclusionary vs exclusionary, forward-looking vs backward-looking, and "mainly young, racially diverse, happily counter-cultural" vs "almost all white... better-off and older". She also wrote that “The Tea Party, under one name or another, has actually been part of American politics for a long time. It is a movement that yearns for the restoration of an imaginary past....” 

It also instinctively identifies itself as made up of “real Americans” - which in turn helps to account for dramatic differences between how conservative elites praised the Tea Party effusively, only to heap scorn on Occupy Wall Street. This conservative double standard toward people's democracy was anything but surprising. If there is one thing conservatives believe in, it's double standards. The defence of social hierarchies is their core value, which virtually demands very different treatment for those who support vs. those who challenge the powers that be. Decades of research in political psychology - particularly right wing authoritarianism and social dominance orientation - support this conclusion, and a new book by Corey Robin, The Reactionary Mind: Conservatism from Edmund Burke to Sarah Palin, offers a detailed critique of how this orientation has expressed itself through the complexities of actual history. 

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Particularly significant is Robin's analysis of right wing populism, a more sophisticated view than Piven's, which he summarised succinctly in his response to a deeply wrong-headed review in the New York Times. Right wing populism “assumes one of three forms,” Robin wrote, “none of which involves false consciousness or conspiratorial trickery.” These are:

• Democratic feudalism: Giving real, not imaginary, power to members of the lower orders to wield over people beneath them. This can happen in factories (supervisors), families (husbands/fathers), and fields (overseers, slave catchers, etc). It can also happen in certain forms of nationalism and imperialism.
• Upside-down populism: Get the lower orders to identify with the higher orders, not through deception but through an emphasis on the one experience they share: loss.
• Outsider politics: Because the conservative defence of privilege occurs in the wake of a democratic challenge, it must develop a new ruling class and "a new old regime", in which the truly excellent - not the lazy inheritors of privilege but the very best men - rule. These men often hail from outside the traditional precincts of power, proving their mettle in one of three places: at the barricades of the counter-revolution, on the battlefield, and in the marketplace.

Of course, these different forms can also intermingle, or co-exist side-by-side. Herman Cain, former Godfather's Pizza CEO and Republican presidential hopeful, for example, fits neatly into the "outsider politics" category, but he's quite comfortable using the rhetoric of democratic feudalism or upside-down populism as well.

What is more, underlying all three forms that Robin describes are another bundle of defence mechanisms that help ordinary people identify with those above them, thus defusing the experience of being taken advantage by them. The three most significant are:

• Identification or introjection, the obverse of projection. It involves identifying with someone else, rather than denying anything in common, taking on their personality characteristics as one's own. In Anna Freud's original analysis, it was specifically "identification with the aggressor". Closely related is: 
• Idealisation, the unconscious perception of another as having more positive qualities than they actually possess. Idealisation and identification can work together, creating ideal images of higher class people to model oneself on, rather than resent, regardless of how they actually treat one.
• Fantasy completes the triad; this defence mechanism helps compensate for the fact that such ideal images do not correspond with reality.

The workings of these defence mechanisms can perhaps most easily be seen in works of art or literature romanticising the past - the less realistically, the better. Examples such as Gone with the Wind or Birth of a Nation come to mind. But it's also reflected in Tea Party fantasies identifying themselves with Revolutionary War figures with whom they may actually have very little in common - Deists like Thomas Jefferson and Tom Paine, for example, or high-tax colonies like Massachusetts, where representation rather than taxation, per se, was the over-riding issue. Such fantasy-based narratives work to heighten the identification with traditional, conservative elite figures - real or imagined - and lessen the identification with real-world others situated similarly to themselves. 

Stepping back from this description, we can clearly see that Occupy Wall Street involves shedding or stripping away defence mechanisms that serve to hide uncomfortable truths, while the Tea Party, as a form of right-wing populism, activates a greater number of defence mechanisms, making those truths increasingly obscure, and difficult to comprehend.

In short, the outward similarities of these two groups mask a difference as profound as any that can be found in American history. Will we go back to an imaginary past in which we are hopelessly confused and mislead by a welter of different defence mechanisms hiding painful truths from ourselves? Or will we go forward into a future we knowingly shape together for the mutual benefit of all? Those are the two visions before us, which the weeks and months ahead should make increasingly clear to one and all.