PAUL KRUGMAN is on the warpath against the free-market fundamentalists who keep getting things wrong. He doesn't have a terrible case—American leaders who have warned that monetary and fiscal stimulus would lead to soaring bond yields and runaway inflation have been proven wrong, and then some. But this isn't the best supporting evidence for his piece:

The free-market fundamentalists have been as wrong about events abroad as they have about events in America — and suffered equally few consequences. “Ireland,” declared George Osborne in 2006, “stands as a shining example of the art of the possible in long-term economic policymaking.” Whoops. But Mr. Osborne is now Britain's top economic official. And in his new position, he's setting out to emulate the austerity policies Ireland implemented after its bubble burst. After all, conservatives on both sides of the Atlantic spent much of the past year hailing Irish austerity as a resounding success. “The Irish approach worked in 1987-89 — and it's working now,” declared Alan Reynolds of the Cato Institute last June. Whoops, again.

Was Irish economic policy prior to the crisis a disaster? It certainly wasn't a complete mess. As a small, open economy populated by well-educated English speakers, Ireland wisely determined that it could do well by attracting foreign direct investment, and through this process the Irish economy enjoyed stunning growth rates that helped turn its population from one of the poorest in Europe to one of the richest. Neither was this model the cause of the current economic woes (although we have learned that Ireland's narrow tax base did make the federal budget vulnerable to a sharp slowdown). Ireland's present woes stem from the reckless activities of its banks and from the inflation and collapse of a massive property bubble, coupled with the lack of an independent monetary policy.

Now, it is misleading for George Osborne to cite Ireland as a model that can easily be imported into Britain. But it's also a bad idea for Mr Krugman to conflate the FDI-oriented Irish model, which is generally quite successful, with the bubbly financial wreckage lying atop it. Ireland's financial woes don't indicate a rotten economic core any more than than America's financial troubles point to a flawed American economic model.

What about the austerity, then? It's difficult to imagine that Ireland would be in better shape had it not embraced early austerity. Ireland has a pretty substantial budget deficit (see this) that needs to be closed. Whatever you think the Irish government should have done with its banking problems, that fiscal gap would have been there. Indeed, absent the double-blow of growing bank losses and ill-timed German musings about sovereign debt restructuring, Irish austerity might have allowed the country to miss the crisis; it has a lot of cash in hand and little need to tap debt markets until late next year.

What has thrown everything off is the bank rescue. It's the bank rescue that pushes Ireland's debt ratio into truly uncomfortable territory. It's the bank rescue that makes deleveraging such a long and painful process. And it's the bank rescue (and its distributional impact) that has led markets to question Ireland's ability to make austerity stick, which has led to rising yields and crisis. Had Ireland opted to stick bank creditors with greater losses, it might not have lost credibility with markets.

Ireland's leaders probably expected better behaviour elsewhere in the euro zone, as well. Perhaps they believed other peripheral nations would follow their lead sooner, rather than waiting for crisis to force them into drastic cuts, thereby reducing the impact of contagion fears on Irish yields. They may have expected more fiscal assistance from stronger euro zone nations. They might have hoped for a monetary policy more in keeping with the median economic conditions within the single currency area. They surely expected a less bumbling response to crisis from the Germans.

But it's hard to see what great advantage Ireland would have gained from delaying austerity. Either markets would have attacked sooner, or Ireland would be facing bigger and more drastic cuts now. Mr Krugman likes to point out that Ireland is being attacked by the bond vigilantes despite its austerity. Well, other peripheral countries are in very serious economic trouble despite not embracing Ireland-like early austerity. It is far from clear that in five years we'll be praising Portugal's prudent handling of the crisis while condemning Ireland's foolish embrace of austerity.

Once again, it's misleading for Mr Osborne to cite Ireland as a model. Britain's fiscal gap is smaller and markets aren't yet demanding cuts. But it's not crazy to think that Ireland has, for the most part, made the best of an awful situation.