How to deal with people who live in alternate realities, who seem like they could be in a psych ward, but instead are participating members of society?

I often wonder, is the human condition getting worse? Or do we pass through life as in a fog, continually rediscovering scenes of the insanity play as they emerge, thinking that they are new phenomenon only because we have largely forgotten the previous scenes?
You can’t solve a problem without first understanding what the problem is.