For instance the Austrian's odd assumptions about the stupidity of investors.
The problem is supposed to be that businessmen just look at current interest rates, figure out the PDV of possible investments, and due to artificially low interest rates (which can't persist forever) they wind up making malinvestments. But why couldn't they just use the credit market's long-term interest rates for forecasting profitability instead of stupidly looking at current short-term rates?Why don't investors recognize that the Fed induced deviation from the natural interest rate "can't presist forever", and plan their projects accordingly? David (and other Austrians) have tried to explain this irrationality away by appealing to the "the madness of crowds". Fair enough, but that's essentially a Keynesian argument. Just replace "madness of crowds" with "animal spirits" and you've got the same case Keynes had about investment market volatility. If you take that argument seriously the Austrians should be as enthusiastic as the Keynesians about the merits of financial sector regulations.
You could also argue that investor irrationality isn't irrational at all. That seemingly crazy, short-sighted investment decisions can be explained in game theoretical terms as a Prisoner's Dilemma of sorts. A competitive investor can't just pass up what they recognize as artificially low rates if they expect others to do the same. Of course if this were the case why would we ever expect investment markets to function in the first place, regardless of Fed interference with the interest rate, and why haven't repeated iterations of the game resulted in the same sort of learning curves we would expect to see over the nearly one hundred years the Fed has been tinkering with interest rates?
Anyone interested in an additional critique of the Austrian school from another former Austrian should also read Tyler Cowen's book, Risk and Business Cycles. Hopefully after this week we'll be able to put the final nail in the coffin of the Austrian school and move on to discussing something more relevant.