(a) Does Krugman actually know that, say, GS is making record profits principally from high-frequency trading, or is he just invoking them as a boogeyman because they're already ill-favored by his audience and because they are known to have invested in some high-frequency trading?

(b) What does it even mean to question whether "one thirtieth of a second faster" merits profits? As Krugman well knows, the markets aren't inherently frictionless; when you trade, you trade across a spread between bid and ask prices, a spread representing a premium to your trade that is taken out of the market by middlemen. HFT cuts the spread and hurts those middlemen, but also reduces friction in the market.

Krugman's argument seems to reduce to the notion that the only people who should profit in a trade are principal buyers and sellers; people with a long-term strategy or outlook on an instrument who are trading for a reason. But HFT or not, a huge swath of the market consists of entities that exist solely to connect buyers to sellers and to facilitate price discovery, and it's naive (or disingenuous) to suggest otherwise, or to pretend that markets would work effectively in their absence.