Krugman doesn’t realize it, but he just defined Galt’s Gulch:
Talk to conservatives about the financial crisis and you enter an alternative, bizarro universe in which government bureaucrats, not greedy bankers, caused the meltdown. It’s a universe in which government-sponsored lending agencies triggered the crisis, even though private lenders actually made the vast majority of subprime loans. It’s a universe in which regulators coerced bankers into making loans to unqualified borrowers, even though only one of the top 25 subprime lenders was subject to the regulations in question.
Oh, and conservatives simply ignore the catastrophe in commercial real estate: in their universe the only bad loans were those made to poor people and members of minority groups, because bad loans to developers of shopping malls and office towers don’t fit the narrative.
It is a magical place where global warming solves itself, the only thing health care reform needs is more deregulation, if the government would just get out of the way, Wall Street would self correct, and you get to eat Freedom Fries with every meal and never gain weight.