psychodynamic training has been expunged from academic psychology departments (i.e. PhDs), it is thriving in PsyD programs and there is no evidence of decline. Yes it's true that the social workers are taking over psychoanalysis if that's what you mean, but they often have to have several years of experience as the official standard is still a doctoral level education.
Historically it has been psychiatrists and not psychologists who have been psychodynamically trained because up until the 1980s you had to have an MD to do training at a psychoanalytic institute until the psychologists sued on antitrust grounds (see
Welch v American Psychoanalytic Association). Historically psychologists
weren't allowed to do psychotherapy at all and were relegated to testing. As such even though CBT was largely developed by a psychiatrist, this came to be the primary model for many psychologists
Pretty much all of the top ranked psychiatry residencies provide training in psychodynamic psychotherapy. However it's not what it used to be. There is much more time now devoted to CBT and learning other psychotherapeutic modalities, and obviously drug therapy is much more important than it was 40 or 50 years ago so the amount of time devoted to psychodynamic training (which is fairly labor intensive) continues to dwindle. The decline in psychodynamic training in recent years has led many institutes to offer 1-year fellowships and 2-year certificate
programs in psychoanalytic psychotherapy for psychiatric residents and young psychiatrists.
The CBT vs psychodynamic argument comes and goes. All therapies have much in common and that is probably where most of the change occurs. There was a recent article in the
guardian about the newly ignited therapy wars challenging the therapeutic hegemony of CBT. There is evidence supporting psychodynamic treatments:
here,
here,
here,
here, and
here.
I also don't think that these therapies are stuck in the murky Freudian past but instead the field is engaged in attachment based approaches, and grounded itself in developmental neuroscience and informed by understanding of social cognition and affect regulation.
Mentalization based approaches, and recognizing the importance of mutative interpretations through the transference affect, as well as the importance of intersubjectivity, and
"implicit relational knowing".
Since we know that CBT doesn't work in the way it was supposed to, and seems to affect metacognition, and many of the "third wave" approaches have little to do with CBT but are instead informed by like buddism (DBT and MBCT), relational frame theory (ACT), and good old fashioned transference and therapeutic relationship (FAP). The British psychologist Jay Watts wrote a fantastic article on why
CBT doesn't exist.
You are right though, in most setting psychiatrists are not being paid to sit around stroking beards and engaging in mental masturbation. (Almost) no one is going to pay a psychiatrist to do psychotherapy (Regardless of modality) because it is much cheaper to have someone with less training do it. However there are still many psychiatrists who do choose (for better or worse) to have psychotherapy based private practices and the primary kind of therapy these psychiatrists will likely be doing is psychodynamic psychotherapy. Most social workers or masters levels counselors are not doing psychodynamic work. And while it is true, particularly in new york, that these psychiatrists have essentially abandoned the mentally ill for the wealthy worried well, there are many psychodynamic psychiatrists who see patients with serious mood and anxiety disorders that have no responded to other psychotherapies and medications, and increasingly it has become "a treatment of last resort". And since the response rate in the kind of population is already low, sometimes you can see amazing changes. And one might argue that these more treatment refractory cases may benefit from seeing a psychiatrist even if the focus of treatment is psychotherapy.
When conventional medicine fails, a call the the witch doctor may be all that is left.
I am not some beardy weirdy analyst - it doesn't interest me. But it's no more of a cult than is DBT (in fact I think DBT is even more of a cult - these EBP proselytizers are more evangelical than the analysts)