I thought Krugman was a bit of a weenie. I thought Schwartz was quite polite and respectful, went to great troubles to compliment Krugman on his well-written book (even though he said, quite nicely, that he didn't agree with the conclusions), as well as his well-deserved Nobel prize related to international trade - but that he thought that the Nobel prize did not necessarily lend weight to Krugman's work unrelated to the relatively narrow topic of the prize, such as was under discussion. I thought he was honest in his respect - I didn't see or hear any mocking in his voice or mannerisms.
I think he made a valid point and tendered it in an appropriate manner.
Krugman came across petty and unable to take criticism. He could have handled that a bit better, but it was obvious that he was enraged and unable to control it completely - at least he didn't yell and foam at the mouth. A self-deprecating comment, or a nicely worded barb about some particular area that he is in contention with Schwartz about would have put him in a much better light.
The problem would seem to be a bit of pride - I think it obviously wounded him to have his Nobel prize discounted in any fashion.
I thought he handled himself relatively well once he got control of himself. I liked how he put the main problems of the US economy on the political parties and not Keynesian theory, because he's right I think, to an extent. What the US government has done in terms of spending and future obligations, and the amount of borrowing and debt that has been accumulated as a result, I don't think is what Keynes was thinking - it has gotten completely out of control.
It still seems to me a misunderstanding of cause and effect when he talks about the "proper" way to inflate by spending and borrowing. That is, that it should be used only when things are declining to prop them back up again. As Schwartz put it, once programs get started they don't go away, it's human/government nature to continue the spending. Governments don't often balance their budgets when things are going good - they usually do keep spending.
But even then, the cause of the decline is not some mysterious cause that comes out of nowhere, it's some artificial factor that messes with the market and causes a bubble, which causes the decline when it's readjustment time. In the US, the Dot Com bubble ended in a relatively small recession, and was "helped to end" with interest rates being lowered by the Fed and with that, mixed with legislation and policy related to easy home financing and a swarm of regulators who don't understand enough about what they're regulating to find the huge fraud that was going on, etc, etc, caused a much bigger bubble of debt that it's a real problem now.
Add on to that the cost of the 21st century US wars to spread democracy to places that simply aren't ready for it, the baby boomers retiring in swarms and the new health care legislation that can only put a heavier burden on an already overly-burdened business economy (just to name a few big ones), and I think even the Keynesian economists have to be terrified.
I liked both Schwartz' and Conthe's statements overall. What I really liked was both of them talking about the changes that Spain is trying to accomplish related to cutting and reforming their government. I don't know what the reality of that is, though, because I don't follow much in the way of Spanish politics. Although I might change that if I can find the time...