To most of the reading public (including me) this looks like a classic example of the politicization of the Nobel Prizes -- however I've consistently found very smart economics that I read online to say that Krugman is in fact a very good economist when he's dealing with economics, though a total hack when writing for the NY Times.
For those interested in reading about "the other Paul Krugman", Marginal Revolution provides a good and readable explanation of Krugman's academic work, and his achievements in trade theory. Also readable (and very short) is Arnold Kling's post on EconLog.
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