Neither inflation nor deflation favors investment. Inflation does however favor borrowing whereas deflation encourages savings to finance capital investment. You don't understand how real people behave. It's a very rare oddball who keeps money under the mattress or buries it in the backyard. It's true that deflation increases the value of your money but investment does not preclude deflationary gains so why not get both?
Also Paul Krugman and Milton Friedman do not represent the entire gamut of economic thought anymore than Hilary Clinton and Mitt Romney represent the gamut of political thought. Krugman and Friedman are both apologists for the state and they both hold the same basic Keynesian assumptions about the economy.
"Only an absolute idiot -- someone who doesn't have the slightest idea of how the money works -- would argue that inflation is bad."
Don't piss on my leg and tell me it's raining. Inflation favors the political class and the bankers while screwing the rest of us, especially poor people who already have a hard enough time getting by without having their purchasing power diminished.