I'm a big believer in character over politics and this exchange makes Krugman look like a jerk and a bully. Key graph from Okrent:
I offered him only three examples of “shaping, slicing and selectively citing” (for some reason, he’s left one out of his rebuttal) because I was at home when he began bombarding me with outraged demands for retraction and apology; I’d completed my tenure as public editor the preceding week, and did not have any files with me. When I had the chance to consult some of my reader mail later in the week, some of his greatest mis-hits immediately came to the fore.
If you've spent any time in journalism you know people like this: The crazy person who calls 15 times a day and demands retraction for an "error" which is really a difference of opinion.
Krugman look more like a nutty letter-to-the-editor writer than a columnist. And not a particularly gracious colleague, either.