Psychoanalysts in the USA have been perceived as élitist and exclusionary. It is hypothesized that this behavior services as a narcissistic defense against feelings of marginalization and inadequacy, stemming from experiences of prejudice, loss, and exclusion in the past. It is further hypothesized that there has been an institutional and multigenerational transmission of cumulative traumas that originated with Freud and the European psychoanalysts. The roots and history of the narcissistic defense are examined, as well as its manifestations in American training and practice today.