I don't think Krugman understands what that phrase means...

When someone says, "...like rearranging the deck chairs on the Titanic," they mean doing something pointless during a crisis. It has nothing to do with doing pointless things to avert a crisis.

Krugman is saying the Obama Administration's plan won't work. But he does it ass-backward:

"It's a plan to rearrange the deck chairs and hope that that keeps us from hitting the iceberg," the Nobel Prize-winning economist said of Geithner's bank plan.

Before the iceberg hits, there is no crisis, so it wouldn't be that foolish to rearrange deck chairs, if they needed to be rearranged. It is only after the iceberg hits that deck chair rearranging becomes idiotic.

I am not commenting on the plan or criticism of the plan . . . just talking about the use of the phrase.