Semantics Play and Other BS Via Krugman

The Joy of Sachs
http://www.nytimes.com/2009/07/17/opinion/17krugman.html?ref=opinion

...it shows that by rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.

Let’s start by talking about how Goldman makes money.

Over the past generation — ever since the banking deregulation of the Reagan years — the U.S. economy has been “financialized.” The business of moving money around, of slicing, dicing and repackaging financial claims, has soared in importance compared with the actual production of useful stuff...

...

I won’t try to parse the competing claims about how much direct benefit Goldman received from recent financial bailouts, especially the government’s assumption of A.I.G.’s liabilities. What’s clear is that Wall Street in general, Goldman very much included, benefited hugely from the government’s provision of a financial backstop — an assurance that it will rescue major financial players whenever things go wrong.

You can argue that such rescues are necessary if we’re to avoid a replay of the Great Depression. In fact, I agree. But the result is that the financial system’s liabilities are now backed by an implicit government guarantee.

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That first quoted part is good stuff - it tells it like it is. Wall Street's bean counters found a way to convince other people to risk money on complex financial instruments in a way that concealed the enormous risks they were actually taking. Investors weren't blowing it Vegas-style, they were investing in something akin to blue chip investments! That's Wall Street snake-oil in a nutshell. If you aren't an insider, you are a mark ripe for the big and long con.

And then Krugman goes kinda sideways on the rest. He seems to want to avoid getting down to details about how offensive are the activities of our own government in collaboration with Goldman Sachs - and all financed on the back of the taxpayer too!

And then the word game. Is there some way in which the current crisis is so radically dissimilar to the depression that we aren't de facto in something like a depression? We have some safety nets in place and I would argue that because of that fact we can play this semantic game and call it a "recession" instead. But call it what you will, the truth of it is very much the same thing. We shall be digging our way out of it for years to come.

Another thing that disappoints is the like of criticism concerning the manner in which the Wall Street bailout was pursued. I think there was a legitimate way to handle things in which all players would have received some consideration and the overall effects of the financial downturn would have been ameliorated. What we got instead was an offensive handout to those that needed it least. Wall Street got what it wanted and Main street got the shaft.

With joblessness rising, with foreclosures at an all time high, with a near shutdown of american industry I feel I can safely assert that we are still completely fucked and that we aren't going to be made whole again for a very long time.

Why doesn't Krugman say that?