Keynesians vs. Austrians

or "The Problem Left-wing Academics have with Right-wing Academics"

First, Paul Krugman at the New York Times offers his view on the fatal flaw of Austrian economics. Krugman has a knack for summing up what he thinks is wrong with other people, particularly economists. Usually the lack of subtlety annoys me, but I think this comment is clear and on target:

And the key to all this, I believe, is that the Austrian abhorrence of explicit models, even for the purposes of clarifying thought, leaves them unaware of the holes in their account.

Just to make sure we don't think he's become a charitable reader of flawed ideas, though, Krugman expands on his complaints in the earlier post:

Austrians are basically Keynesians in denial — self-hating Keynesians? — pretending to themselves that they’re not using ideas that are in fact essential to their story.

 Harsh. Possibly true. But harsh.

Finally, Brad DeLong offers a more detailed commentary on specific claims he associates with Austrian economics. He agrees with the idea that speculation and imprudence led to a housing bubble, but disagrees with the sources of the imprudence, the lasting effects, and how the government should(n't) respond to it. The comment I can most get behind is as follows:

Requiring trend deflation [...] in order to keep nominal spending without a trend would be more likely to generate waves of universal bankruptcy, deep financial crises, and big recessions than our current system.

I've long held that Austrian economists have good insights to offer, but they are not good at monetary policy. I tend to favor Kruman and DeLong's criticisms in this case, although not their tone. If any of you are familiar with Austrian economics (usually through Congressman Ron Paul), I'd love to hear your responses.