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Peter_Twieg comments on Awful Austrians - Less Wrong
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Unfortunately, Austrians more than any other group typify that classic Paul Samuelson quote: "Economists have correctly predicted nine out of the last five recessions." It's easy to make arguments about how trying to circumvent the market process will lead to calamity, and eventually you'll be correct. But if you want to find an Austrian economist to respect, find one who will actually make concrete economic predictions that are falsifiable. It's my impression that many of them simply will not, often on philosophical grounds.
you're talking about quantitative predictions instead of qualitative predictions. qualitative predictions can always be defended on "no true scotsman" grounds. This is a common defensive characteristic of various ideologies. making falsifiable claims makes an ideology less adapted to human hosts.
What if the economic recession had centered around corporations that were not considered "too big too fail", that weren't subject to government interference, or even that were subject to less interference than others that were doing just fine until they were caught in the wave of the recession? That would blow Austrian theory right out of the water. It is falsifiable, it describes economic systems that it predicts will not systematically suffer periodic recessions. If such a system were tried, and it did experience a boom-bust cycle, then Austrian economics would be wrong. If we, in our current economic conditions, stopped all bailouts and let the big banks fail, and the smaller banks that did not participate in the lending mess do not expand to fill the abandoned economic niche, then Austrian economics would be wrong.
Contrast that with the Keynesians, who will claim, if the bailouts and government stimulus do not revive the economy, that they were not big enough.