I'm not a big fan of Krugman, but let's also not forget that we were in a recession at the time of those remarks; when Krugman was saying the Fed should raise interest rates a few years later, and taht the US was addicted to Chinese treasury purchases, libertarians scoffed and called him an alarmist.

This 2005 example of libertarian economic thought is particularly ironic, arguing that measures of inflation like CPI give too much weight to housing and car prices while an adjacent advert promotes a book explaining how the crisis was caused by too much easy money: http://www.cato.org/pub_display.php?pub_id=3752

Other sparkling jewels of economic wisdom include his prediction at the beginning of 2008 that recession was a non-issue, or his comments from earlier in the decade (when the Fed had raised rates a bit) that the nation would achieve substantial long term benefits from the 'glorious housing boom' created by previously low rates, which had allowed many refinancers to invest and consume more.

Physician, heal thyself.