To be fair with P. Krugman
I keep reading a lot against Mr. Krugman's position lately. Many times, I have disagreed with his views myself, and in a profitable way, as when he was bearish in 2009 (see my letter from May 19th, 2009).
However, under the current circumstances, I think Mr. Krugman is not necessarily right, but at least, he is consistent. All Mr. Krugman is suggesting is following Keynes, when he explicitly proposed that inflation was the way out in the '30s. I believe, it is the way out in 2010 too.
Furthermore, politically speaking, I think the Austrian school should support Mr. Krugman. What better way to win votes than after a massive inflation caused by a bunch of bookish minds? If the US seeks to avoid inflation, the ensuing deflation will be disastrous, and the mob will see the devil in each Austrian proposal.
"Tu ne cede malis" didn't get us Austrians anywhere, in my view. So maybe we can try something different...In conclusion, Krugman is a true Keynesian, while Bernanke is not. Although it is true, fiscal policy is not up to the Fed...
MS.