Madeline Levine is a clinical psychologist and expert on adolescents and teens from affluent families. Throughout more than 25 years of practice, she came to observe a counterintuitive phenomenon: that along with their list of achievements and accomplishments, these kids often have developed significant depression, anxiety, substance abuse, and psychosomatic disorders. An effect of being "indulged, coddled, pressured, and micromanaged," Levine writes, is that they haven't been able to develop a sense of self. In her book The Price of Privilege: How Parental Pressure and Material Advantage Are Creating a Generation of Disconnected and Unhappy Kids, Levine dissects her experience working with these affluent kids, and explores why they report feeling less close to their parents than any other group of teens and have three times the national rate of emotional problems. U.S.News & World Report caught up with her to talk about it.

These are the kids who often are very successful and high-achieving, plus they seem to have all the iPods, nice cars, and designer clothes they could want. Why are so many of them in such emotional trouble?

When a parent's love is experienced as conditional on achievement, children are at risk for serious emotional problems. We know there's no correlation between money and happiness, but in this culture of affluence, stuff counts more than relationships and people are struggling to keep up. And the current view of success is so narrow it's eliminating a large group of kids. It's just not possible for everybody's child to be in the top 10 percent. Everybody wants to have an outstanding kid, but what makes an outstanding kid? Parents do nothing but get in the way when they insist on replicating their own interests, values, and even professions in their children.

One of the things we know is that a warm, involved parent is a silver bullet. The other equally important side of parenting is limit-setting. A mom needs 17 years of a good relationship so that her teenage son cares about what she thinks when she says, "No." Unless you have a warm relationship with your teen, you have no leverage for "No."

What's your experience been as a parent?

I have three sons and I've learned so much. In particular: I'd better see the child I've been given. It's normal for parents to have a sense of their "fantasy child" and have aspirations for their kids, but the problem is kids need the opportunity to develop parts of themselves.

What has the cost been of not letting them do so?

Since the '50s, preteen and teen suicide have quadrupled, substance abuse has increased, depression has increased—all the problems typically associated with deprivation. But most of these kids have learned all the social skills—they shake hands and look somebody in the eye when talking to him—so when suicides happen, it comes as such a shock to the community.

Why is it so important for kids to have "parental prohibitions," as you've called them?

Without them, kids don't develop self-management, frustration tolerance, delay of gratification, impulse control—those things that make people successful. It's the only way they get to internalize rules and regulations for academics, psychologically and interpersonally. If young children can't sit in their seat, they can't learn.

Doubtful any kid would admit it, but do teens and children actually want to hear "No" from parents or have limits set for them?

Sometimes I'll hear teens in my practice say, "It would've been so much better if my mom had said, 'No.'" Children borrow the parents' ego in a situation in which they don't yet have skills to manage on their own. Especially under peer pressure, it's much easier to say, "My mom would kill me."

Why do some parents seem to struggle to set limits for their kids?

Well, I remember when my sons all wanted to marry me—that was great! As a parent, saying, "Yes I love you. Yes, you can have it," is incredibly gratifying. But I also think there's a fear we're depriving them—if we don't give in to our kids we're somehow damaging them. The other challenge is that so many [adults] themselves are exhausted, tired, and unhappy. If you work two jobs—or had a miserable day at work—and you come home to an eye-rolling, door-slamming 13-year-old who says, "I hate you," it's kind of like, who needs it? You've got no reserves left at the end of the day.

You suggest parents also have less support than past generations in raising kids.

I'm a baby boomer and we did a tremendous job of tearing down institutions that needed to be torn down, but we did a miserable job of replacing them with viable institutions. Participation in all organizations has gone down, from religion to bowling, and people are at their wits' end trying to do this alone.

What if parents of a teen realize they've been shortchanging their kid? Is there hope for that family?