It seems Krugman will say anything to score a point. He wants to argue that insufficient demand (unemployment) is a problem and that redistribution (trade taxes) is not.
“…the attempt to place blame for the Depression on protectionism is a sort of Noble Lie, an attempt to scare people into trade policy that’s good for other reasons” Extract from Hayek, Trade Restrictions, And The Great Depression — Paul Krugman Blog — NYTimes.com
An attempt to scare people? I suppose he’d know.
But this is drivel. Opening (and maintaining open) markets is not “good for other reasons.” It’s good precisely because markets where there is competitive supply sustain surprising (innovative, bigger-than-you-expected) growth. The opposite of depression.