Paul Krugman's 'The Thrid Depression'; Derivatives sucking away Capital

Paul Krugman thinks we are in the early stages of a Depression.
His article in NY Times is here - The Third Depression
But this blogpost is about a comment by a reader (Bob Sallamack, NJ) to above article.

The below comment talks about how capital is flowing without producing any growth. Bob alleges that Derivatives,Buyouts,HedgeFunds are sucking away whatever Capital exists leaving nothing for investing for growth.

Dr. Krugman fails to mention capital in his analysis. We know that the Republicans no longer want to call our system capitalism but this is the reality of our past, present and future.

Yet there is no longer capital in our system for growth. The derivatives that eat up massive amounts of capital and allow little if any for growth, are still around even though everyone is aware that derivatives add almost nothing to our economy.

Large amounts of capital are also being eaten up by buyouts where instead of growth we ultimately find cost cutting and more unemployment to meet the large amount of debt that results from the high price of the buyout.

Banks that have access to cheap access to capital are not interested in using this capital for anything that would contribute to growth while there are investments in derivatives, buyouts, and hedge funds.

Companies are no longer interested in using earnings for growth to raise their stock prices since the new games is to provide dividends to share holders since dividends are no longer heavily taxed.

Most American companies now are being managed to simply view the company as a cash cow where milking the company for it all it is worth means more unemployment and no investment for future growth.

It is time for the economists to understand that capitalism simply is the flow of capital, and that the flow of capital does not necessarily mean a viable economy. Large amounts of capital flowed during the tulip speculation but did nothing to create a viable economy.

I believe it is time for the economists to start to study and understand the new flows of capital in our economy that do not produce any growth for the economy. There seems little purpose in relying on the past for guidance if past conditions no longer reflect the conditions of the present.

Below blogpost explains very clearly what Derivatives, Stocks and Bonds are -
http://charliebroadway.blogspot.com/2010/02/derivatives-market-is-not-capital.html