If the doctor said you need to take 3 pills of antibiotics per day over the next week to clear up an infection and you instead take 3 on the first day, who was wrong if your infection isn't cured? Krugman has shown the work behind his predictions. If you have a more predictive model, the world would love to see it. If you just want to throw up your hands and say all models are BS, that's just denying the predictive utility of models.

The information on CDs may be digitally encoded, but the packaging (plastic disc, you know the "CD") is a physical thing. When you sell bits via a web site, there is clearly NOTHING physically significant that you are purchasing.

If the significance of the distinction isn't clear, consider that the text of books is every bit as digital as CDs. They might not be base-2 digits, but they are digits in some base none-the-less.