Lest anyone think that Paul Krugman is a real economist (instead of a Keynesian political operative), read his blog post about Mercantilism and the “liquidity trap.” Read on:
As I’ve written many times in various contexts since the crisis began, being in a liquidity trap reverses many of the usual rules of economic policy. Virtue becomes vice: attempts to save more actually make us poorer, in both the short and the long run. Prudence becomes folly: a stern determination to balance budgets and avoid any risk of inflation is the road to disaster. Mercantilism works: countries that subsidize exports and restrict imports actually do gain at their trading partners’ expense. For the moment — or more likely for the next several years — we’re living in a world in which none of what you learned in Econ 101 applies. (Emphasis mine)
If someone sees the repeat of Bernard Mandeville’s “The Fable of the Bees,” well, that is correct.