Paul Krugman obliquely admits capitalism is destroying America:

[newswolf56]

…I think of (Federal Reserve Chairman Ben) Bernanke's position, which one hears all the time, as the 80-20 fallacy. It's the notion that the winners in our increasingly unequal society are a fairly large group - that the 20 percent or so of American workers who have the skills to take advantage of new technology and globalization are pulling away from the 80 percent who don't have these skills.

The truth is quite different. Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year…

A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year…But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint…

(Bernanke’s) fallacy tends to dominate polite discussion about income trends, not because it's true, but because it's comforting. The notion…suggests that nobody is to blame for rising inequality, that it's just a case of supply and demand at work…(while the) idea that we have a rising oligarchy is much more disturbing. It suggests that the growth of inequality may have as much to do with power relations as it does with market forces…But the first step toward doing something about inequality is to abandon the 80-20 fallacy (and) face up to the fact that rising inequality is driven by the giant income gains of a tiny elite.

But actually and unfortunately -- if I may be permitted my own 12-stepper metaphor -- Krugman is still very much in denial. His first step should have been acknowledgment of the historical truth of class struggle. His second step would then have been acknowledgment that the conditions under which wealth can be “created” (see footnote below) no longer exist, and will probably never exist again on this planet, precisely because the limitations imposed by Peak Oil and environmental destruction/global warming have restored the near-absolute zero-sum limitations that have restricted wealth throughout most of human history. Only then -- as a third step -- is Krugman in position to explain to us how and why we are being victimized: “the fact that rising inequality is driven by the giant income gains of a tiny elite.”

Which leads us to the REAL first step, recognition that Marx is not only again relevant, but in fact more relevant now than ever: admission that at our present state of consciousness we are powerless over the ruling class -- that our lives have become unmanageable.

The full text of Krugman’s essay is linked here via Truthout, for which New York Times registration is NOT required:

http://www.truthout.org/docs_2006/022706Z.shtml

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Footnotes:

Perhaps the realities of Peak Oil and environmental depredation will at last force theoretical economics to acknowledge that wealth, like other forms of energy, is never truly “created.” It is instead transformed from potential energy to kinetic energy, for example from the potential of gold in the ground (via its extraction by labor) to the kinesis of gold coin, which in turn may purchase more labor -- itself a form of energy -- to mine yet more gold. (Obviously if the mine owner can use slave labor rather than paid labor, his profit is that much greater: a demonstration of the overwhelming impetus by which capitalism invariably deteriorates into fascism.)

The myth of “wealth creation,” a shibboleth of the modern world, seems to have come from three sources: the vital need of capitalism to obscure the reality of class-struggle by obscuring the exploitation inherent in all capitalist economic relationships; the tendency of capitalism to euphemistically disguise the profits gained by replacement of workers with machines as “created wealth” (rather than wealth stolen from workers); and the false and ruinous prejudice at the core of Abrahamic religion (and therefore inherent in all societies so founded) that man is not part of nature and is therefore exempt from natural law.