This is a neat trick Krugman has pulled here, so I’m afraid most people won’t spot it. Certainly most of his people won’t.
The way Krugman tells it, rapacious (and uncontrolled) capitalists ruthlessly move money in and then out of fragile economies, leaving destruction in their wake. But look at that list of countries: Sweden, Finland, Mexico, Thailand, Malaysia, Indonesia, Korea, Argentina, Iceland, Ireland, Greece, Portugal, Spain, Italy, Cyprus. Not a one of them is a sterling example of what the French deride as “Anglo-Saxon capitalism.” You have here a long list of Third World basket cases, cradle-to-grave basket cases, eurozone hangers-on, Latin juntas, and chaebol-dominated South Korea.
Of course all these countries suffered from bubble economies. That’s what semi-state-run mixed economies do, as we learned so painfully here at home during the Bubble Crash of 2008.
It’s a neat trick, blaming free markets for the destruction caused by statists (and their enablers in the press).
So what’s Krugman’s solution to massive bubbles caused by state controls?
Trapping your money with the people who blew up the bubble.