Krugman writes:

And I was on the grassy knoll, too
One of the funny aspects of being a somewhat, um, forceful writer is that I’m regularly accused of all sorts of villainy. I was personally responsible for the demise of Enron; my nonexistent son worked for Hillary; etc.. The latest seems to be that I called for the creation of a housing bubble — in fact, the bubble is my fault! The claim seems to be based on this piece.
Guys, read it again. It wasn’t a piece of policy advocacy, it was just economic analysis. What I said was that the only way the Fed could get traction would be if it could inflate a housing bubble. And that’s just what happened.
fdsfdfds
Update: A gracious, sensible explication from Arnold Kling.

This seems to me both preening and not entirely honest. Krugman is lucky to have some genuinely baseless complaints (the nonexistent son) to mix in with this criticism, as though mixing that in somehow diminishes the original observation. That is high-school debater stuff — falsus in unum, &c. Also … “um, forceful”? Krugman wrote something embarrassing and now is trying to pull the “I was only being sarcastic” bit. It is telling that even Krugman seems to appreciate that his journalism suffers from such hysterical ninnification that it might prove difficult to sort his sarcasm from his earnestness. He’s not exactly the master of tone.

If Krugman was engaged in “just economic analysis,” though, mightn’t he have followed up that observation about a housing bubble with something like: “And if the Fed does inflate a housing bubble, that would be a mighty bad thing indeed”? He doesn’t. He in fact takes precisely the same line as the guys who are advocating a housing bubble, and says their arguments make a lot of sense. What he does not once do is evince any indication that he appreciates just how destructive a government-induced bubble in residential real estate is likely to prove.

Krugman, of course, was calling for even more aggressive rate cuts than the ones that helped inflate the housing bubble. So it does not seem that the true of his argument is just abundantly self-evident.

I’d say his knoll here is more gassy than grassy.

More here and here.