Lew Rockwell recently posted this piece by Robert Wenzel on his page, and it is very much worth reading. (Wenzel wrote it a couple of years ago, but it is quite relevant.)
It deals with Krugman's article that attacked the Austrian Theory of the Business Cycle (ATBC) in 1999, Krugman calling it the "Hangover Theory." Not surprisingly, Krugman not only gets the history of the Great Depression wrong, but he also mangles the theory itself. To further his calumny against the Austrians, he then tries to put the whole thing into a morality play in which he sets the rules and parameters. He also attacks F.A. Hayek and Joseph Schumpeter, two economists whose intellect and life's work dwarfed anything Krugman ever will do.
Krugman's explanation is quite dishonest, but that is the state of modern economics these days.