http://www.pkarchive.org/cranks/hangover.html Here he critizes Austrian business cycle theory. and over here he gets his response. http://mises.org/story/3579
Its quite possible Austrians are correct that interest rate manipulation driven by the central banks creates 'malinvestments' however they are incorrect in what solution needs to be taken to address the bust when it comes. That happens because the dont take into account that the 'fundamentals' that need to be 'corrected' to their 'right level' are not some absolute equilibrium level waiting to be reached, but rather that markets create the fundamentals they are supposed to reflect. If everyone thinks a bank is in trouble people will run for their cash and the bank will be in trouble, if people think its fine then their money will be fine. The are multiple equilibriums that austrians dont seem to understand
Actually anaconda is right If you understand the concept of FRL it will answer about 80% of your above statements. What is that thing about multiple equilibrium. ??? They dont exists. The market is constantly moving.
Mainstream economics is not science and Austrian Economists are armchair philosophers. Most mainstream economists' views support some kind of political decisions and they are biased. Austrian economist's views have a ideological foundation that is not related to just economics. Economics is the effect of political causes. Whoever tries to understand economics apart from politics is a crank and a fool.
Ridicule and caricature are the best tools the prestigious establishment members have against upstarts or alternatives. Krugman and his ilk will never seriously review any alternative framework that threatens the established order and his professional standing. It is that simple.
I dont have a clue what anaconda wrote as he is in my ignore list. But I'd suggest you read a bit on george soros to understand why there is no single 'equilibrium' that the government needs to stay out of the way for the market 'to get there'. The bank bailouts stopped liquidity runs and decreased fear, this makes the economy more likely to expand, unless someone indocrinated garbage like 'gov intervention never works' in your head its simple to see how the government NEEDs to act during a crisis
Government is the crisis my friend. That is our big difference. How would you feel if you play baseball against a team and you find out that the referee is also a player in the opposite team???