However, I find in the comments a brilliant defense of Rothbard by Major-Freedom that covers the topic in the manner I planned and beyond. Enjoy:
The theory part of America's Great Depression is in fact one of the things I had in mind when calling Rothbard a "bad" monetary economist. He devotes much of it to arguing that prices are in fact perfectly flexible downwards, so that monetarists and others are wrong in claiming that downward price rigidities tend to cause a collapse of spending to lead to a serious collapse of sales and employment. Then, when he turns to history, he assails Hoover's interventions for deepening the depression by...contributing to downward inflexibility of prices!
That's disingenuous. When Rothbard argued that prices can adjust downward, the context he made that argument is a laissez-faire market, not a government hampered market. If the government enacts regulations that make prices rigid, then of COURSE prices would not be flexible downward. Rothbard devoted a large section of MES to price controls. It would be silly to claim that Rothbard contradicted himself when he said that prices are flexible in a free market, and that price controls make prices rigid.
Your criticism of Rothbard is desperate and reeks of nothing but mindless antagonism.
Naturally when it comes to arguing the harmful consequences of monetary expansion Rothbard doesn't hesitate to take price rigidities for granted, rather than pretending that they were invented in 1930: you can't have the ABCT if prices adjust at once to their equilibrium levels.
Not true. ABCT is not compromised by the existence of price flexibility. ABCT is a theory of how inflation distorts the real capital structure of the economy during a credit financed boom, which, you guessed it, changes relative prices. ABCT relies upon price flexibility. The inevitable bust is also accompanied by, you guessed it, changes in prices.
But who can seriously believe that prices (including wage rates) are less rigid downward than they are upward? Here again Friedman had the more plausible view, which was that downward rigidities were more rather than less important.
Friedman, and apparently you, are ignoring WHY wage earners and other economic actors would be resistant to falling wages. You have no tenable explanation, which is why you chalk it up to "resisting wage declines until starvation", but in reality, it is because of decades of Federal Reserve generated inflation, which has made prices gradually rise for decade after decade, and when people are born into such a system, and live through it, they come to adapt to price increases as a matter of course. Couple that with unemployment insurance, food stamps, and other government "safety nets", and resisting wage declines becomes yet another government creation.
If we lived in a society with a commodity standard, and prices gradually fell over time for decades and decades, and if there were no government safety nets, then resistance to wage declines would no doubt be virtually absent. People would come to expect gradual wage rate declines as money became more and more valuable over time, and as the population increased over time.
Concerning "Koch" economists and such: contemptible ad-hominem arguments like that are another bad Rothbardian legacy. In any event, I teach at UGA, not GMU, and so can't be tarred with that particular brush. Nor have I ever attacked Lew Rockwell. My criticisms have all been aimed at Rothbard and those who thoughtlessly repeat his monetary economics fallacies. I make no apologies for them.
Oh please. Every time you post on Mises.org, you ad hominem all the "Rothbardians" who "have posters of Rothbard on their walls" etc. For you to complain about ad hominem reminds me of a certain kitchen item calling another kitchen item a specific shade.
I no less than Rothbard have always insisted that the only reliable way to have money behave in a fashion consistent with avoiding business cycles is to abolish central banks and otherwise get governments' out of the business of supplying money. Those who characterize me as apologizing central banks and centrally managed money cannot even claim to have paid attention to the titles of my writings!
You have made specific arguments on what the Fed should do, what monetary policy should be, rules based central bank inflation targeting, and a host of other inflationist arguments.
Claiming these are only ideas given the fact that the Fed has to exist, is like advising a murderer or thief on how to efficiently murder or steal, then telling others "well, if the murderer or thief has to exist, then I'm just helping them murder and steal so that they do it "efficiently."
Not all of us have life sized posters of Milton Friedman in our bedrooms you know. Some of us have principles that will not be compromised.
Unfortunately, by the time you self-styled Friedmanite cultists realize the errors of your ways (much like Friedman in his later life, when he came around to Rothbard's position) the damage will have already been done.
Did you know that your name is constantly used as a straw man by anti-Austrian Keynesians and other statists who say things like "Even George Selgin agrees with me."? It's people like you who are hampering change for the better. You compromising fools perpetuate the very systems you claim to be against, and you don't even know it, because you're too busy worrying about tenure and being accepted by the establishment.