Photograph by Justin Sullivan 
 
 As he declared quasi-victory in Iowa following a third-place finish, Ron Paul puzzled cable news watchers across the country by proudly proclaiming, “We are all Austrians now.” The average Republican presidential candidate would sooner officiate a gay marriage than praise Europe, yet here was Paul pledging allegiance to Vienna. What did he mean? Why would we all be Austrians? 
 
 Paul’s statement was crystal clear to those familiar with the internecine controversies of the libertarian movement. He was referring to so-called “Austrian economics,” an idiosyncratic passion of his and a set of beliefs that put him at odds with the vast majority of well-known economists of all ideological inclinations. 
 
 For starters, it’s important to note that the term has something of a double meaning. The Austrian school originally referred to a set of classical liberal thinkers with diverse interests who came out of the Austro-Hungarian Empire. Many of these thinkers are obscure today, but the most distinguished member of the group, Friedrich Hayek, is anything but. By the same token, an appreciation for Hayek’s work by no means makes you an “Austrian.” Hayek, who died in 1992, won the Nobel Prize, and mainstream economists thoroughly embraced his important work explicating the role of the price system in conveying information. His ideas undergird everything from carbon taxes to wireless spectrum auctions and thoroughly permeate policy throughout the Western world. 
 
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 But “Austrians” in Paul’s sense refers to something narrower, specifically the thought of Ludwig Von Mises and his student Murray Rothbard. It is a form of capitalism that is even more libertarian and anarchic than that espoused by many libertarians. Rothbard‘s followers, most prominently longtime Paul associate and founder of the Mises Institute Lew Rockwell, have been waging a decades-long war against the Koch brothers and the more mainstream form of libertarianism the Kochs represent. 
 
 “Austrian economics,” in this sense, goes beyond standard-issue free market thinking in a number of ways. Most notably, it seeks to build a strong ethical case for strict libertarianism without admitting that this would lead to any practical problems whatsoever. Therefore, along with rejecting the legitimacy of any intervention to protect the poor or regulate anything (a position much more extreme than even the Hayek of Road to Serfdom), Austrians reject the idea that there is anything at all the government can do to stabilize macroeconomic fluctuations. This, to be clear, is different from the mainstream Republican view that the stimulus bill enacted by Congress in 2009 and signed into law by President Obama was wasteful or ineffective. Austrians also believe that cutting taxes to boost economic activity doesn’t work either. And they disagree with Milton Friedman that appropriate monetary stimulus by the Federal Reserve could have prevented the Great Depression. Indeed, they disagree with even the least controversial of all stabilization measures, the ordinary tweaking of short-term interest rates that all modern central banks use to try to prevent either inflation or deflation. In the view of the Austrians, practically every economic policy pursued by the federal government and Federal Reserve is a mistake that distorts markets. Rather than curing recessions, claim Austrians, stimulative policies cause them by producing unsustainable bubbles. 
 
 The way this works, according to the Austrians, is that artificially low interest rates spur “malinvestment” in unworkable enterprises that inevitably crash when the stimulus is withdrawn. This is an emotionally appealing idea, positing that the suffering of a bust is a kind of cosmic payback for the boom. But it doesn’t make much logical sense. For one thing, as George Mason University economist Bryan Caplan, who’s ideologically sympathetic to the Austrians, points out, it’s hard to understand why businesspeople would be so easily duped in this way. If Ron Paul and Ludwig von Mises know that cheap money can’t last forever, why don’t private investors? Why wouldn’t firms avoid making the supposedly dumb investments? Ironically, the Austrians have replicated an error from the crudest forms of postwar Keynesianism—the failure to consider the role of expectations feedback in macroeconomic policy. 
 
 More broadly, the Austrian story of investment booms and busts doesn’t actually explain recessions and unemployment. Spending patterns shift all the time without sparking a recession. People stop buying BlackBerrys and they buy iPhones instead. Or people stop buying boot-cut jeans and buy skinny jeans instead. Across sectors, maybe people go see fewer movies and with the money they save they eat out at nicer restaurants. A business that curtails its investment spending should have extra money to pay out as dividends. Or if they want to horde the cash, it sits in a bank for someone else to lend out. 
 
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 It may seem “obvious” that the decline in housing activity caused the current recession, in line with the Austrian view, but in fact fixed residential investment turned negative in 2006. It stayed negative for more than a year before the recession began, and then continued negative for a couple more quarters before it turned severe. People spent less on home-building and renovation and more on other things. If investment spending in general declines, you would expect spending on consumer goods to rise to offset it. In practice, this doesn’t always happen and you get a recession. It’s this anomalous collapse in overall spending that needs explaining, and describing some of the past spending as “malinvestment” doesn’t help you understand it. 
 
 The interesting question is what to do about it. Many of the original Austrians found their business cycle ideas discredited by the Great Depression, in which the bust was clearly not self-correcting and country after country stimulated real output by abandoning the gold standard and engaging in deficit spending. Then for a long time after World War II, policy elites more or less agreed on a combination of “automatic” fiscal stabilizers (the deficit naturally goes up during recessions as tax revenues fall and social service outlays rise) and interest rate cuts. And it worked, so nobody much cared about Austrian economics outside of crank circles. But when short-term rates hit zero and the Fed couldn’t push them any lower despite high unemployment, political consensus broke down. ||||| MILWAUKEE (AP) — The Republican presidential candidates are debating for the fourth time in the 2016 nomination contest, this time in Milwaukee, as they compete to narrow down the wide-open contest. 
 
 Republican presidential candidates John Kasich, Jeb Bush, Marco Rubio, Donald Trump, Ben Carson, Ted Cruz, Carly Fiorina and Rand Paul take the stage during Republican presidential debate at Milwaukee... (Associated Press) 
 
 Republican presidential candidates John Kasich, Jeb Bush, Marco Rubio, Donald Trump, Ben Carson, Ted Cruz, Carly Fiorina and Rand Paul take the stage during Republican presidential debate at Milwaukee... (Associated Press) 
 
 Donald Trump, left, speaks as Ben Carson watches during Republican presidential debate at Milwaukee Theatre, Tuesday, Nov. 10, 2015, in Milwaukee. (AP Photo/Morry Gash) (Associated Press) 
 
 Rand Paul speaks during Republican presidential debate at Milwaukee Theatre, Tuesday, Nov. 10, 2015, in Milwaukee. (AP Photo/Morry Gash) (Associated Press) 
 
 Here are the latest developments (all times local): 
 
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 8:24 p.m. 
 
 Kentucky Sen. Rand Paul says low interest rates are hurting poor families. 
 
 Asked about rising income inequality during the main-stage Republican debate, Paul says the Federal Reserve is partially to blame by keeping interest rates low. He says that "destroys the value of currency." 
 
 Paul also argues that income inequality is worse in cities and states with Democratic leaders, saying "if you want less income inequality, move to a city with a Republican mayor or a state with a Republican governor." 
 
 ___ 
 
 8:20 p.m. 
 
 Former Florida Gov. Jeb Bush is attacking the Democrats' stewardship of the economy. 
 
 Bush says: "Hillary Clinton has said that Barack Obama's policies get an 'A.' Really?" 
 
 He adds at that one in 10 people aren't working or have given up looking for work. Bush says one in seven people live in poverty and one in five are on food stamps. 
 
 Bush adds: "That is not an 'A.' It may be the best that Hillary Clinton can do, but it's not the best America can do." 
 
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 8:14 p.m. 
 
 Texas Sen. Ted Cruz says he wants to reduce the number of federal regulators, who he says descend "like locusts" and hurt economic growth. 
 
 Cruz is touting his plan for a 10 percent flat personal income tax and a 16 percent business tax during the fourth Republican presidential debate in Milwaukee. He calls his proposal "bold and simple." 
 
 Cruz calls economic growth under President Barack Obama "a disaster" but says "it doesn't have to be." 
 
 He says the economy can be turned around, adding, "We have done it before and with leadership we can do it again." 
 
 ___ 
 
 8:12 p.m. 
 
 Ohio Gov. John Kasich is opening the Republican debate by reminding voters he's the only acting executive on stage and telling them he's the only candidate who knows how to balance the federal budget. 
 
 To get there again, he says he'd freeze discretionary spending and cut Medicare growth without eliminating benefits. 
 
 He often points to his experience balancing the federal budget while in Congress in the 1990s. He says he "stepped on every toe" in Washington to get to a balanced budget. 
 
 Kasich says it's a moral imperative for politicians to create an environment that promotes job creation and helps lift people out of low-wage jobs. 
 
 ___ 
 
 8:10 p.m. 
 
 Sen. Marco Rubio says he wants an America with more welders. 
 
 During the main-stage Republican debate, Rubio says people are working hard, but the economy is not providing jobs that pay enough. The answer, he says, is to reform taxes, ease the way for businesses and make higher education more accessible, particularly for vocational training. 
 
 Rubio says: "Welders make more money than philosophers. We need more welders and less philosophers." 
 
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 8:07 p.m. 
 
 The two leaders in the race for the GOP nomination oppose raising the minimum wage. 
 
 Billionaire developer Donald Trump says during the prime-time Republican debate that he opposes a $15 minimum wage, enacted Tuesday in his home state, New York. 
 
 Trump says we can't raise the wage "if we are going to compete with the rest of the world." He says American wages are too high. 
 
 Retired surgeon Ben Carson agrees. 
 
 Carson says, "People need to be educated on the minimum wage." He says that every time it is increased, unemployment goes up. 
 
 Carson says he appreciates having worked as a lab assistant early in life, and says the experience gave him more than was reflected in the wage. 
 
 He says, "I am interested in people being able to enter the job market." 
 
 ___ 
 
 8:05 p.m. 
 
 The fourth prime-time GOP presidential debate is underway, with the first question, about minimum wage, going to billionaire Donald Trump. 
 
 It's the first time fewer than 10 top candidates are sharing the debate stage. At center are the two leaders of the pack, Trump and retired neurosurgeon Ben Carson. Arrayed around them are former Florida Gov. Jeb Bush, Sen. Marco Rubio of Florida, Sen. Rand Paul of Kentucky, former Hewlett-Packard CEO Carly Fiorina, Sen. Ted Cruz of Texas and Ohio Gov. John Kasich. 
 
 The audience features prominent Republicans, including new House Speaker Paul Ryan of Wisconsin. 
 
 ___ 
 
 7:20 p.m. 
 
 Each of the four Republican candidates onstage is making a very different closing argument about why he is the best qualified candidate to be president. 
 
 Louisiana Gov. Bobby Jindal says he's the only candidate in the crowded field with a record of cutting the size of government. 
 
 Former Pennsylvania Sen. Rick Santorum says he's the candidate who will fight for working families. 
 
 Former Arkansas Gov. Mike Huckabee says he'll never forget his humble upbringings and will re-energize belief in the American dream. 
 
 And New Jersey Gov. Chris Christie is making the case that he's the best positioned to defeat Hillary Clinton and unite the country. 
 
 Those statements bring the undercard debate to a close. 
 
 ___ 
 
 7:10 p.m. 
 
 Louisiana Gov. Bobby Jindal says someone needs to go to prison over scandals at Veterans Affairs hospitals. 
 
 He cited problems at the VA when asked during Tuesday's undercard Republican presidential debate how to restore a sense of pride in the military. He says all veterans should get the health care they want, no matter what hospital they want to go to. 
 
 Former Arkansas Gov. Mike Huckabee says the United States has broken its promises to veterans and "they'd sure appreciate a better paycheck." 
 
 New Jersey Gov. Chris Christie says the best way to reconnect the American people with those in the military is to "give them a commander-in-chief who respects the military and everyone who wears the uniform." 
 
 And former Pennsylvania Sen. Rick Santorum says President Barack Obama hasn't stood behind the troops. Santorum says Obama gets in and out of military conflicts "based on what the polls are saying." 
 
 ___ 
 
 7:05 p.m. 
 
 Chris Christie and Rick Santorum have a shared distaste for the Federal Reserve. 
 
 The New Jersey governor and the former Pennsylvania senator both argued during the undercard Republican debate that federal interest rates have been kept low to support President Barack Obama. 
 
 Christie says the Fed should be audited and "should stop playing politics." Santorum says low interest rates are "hurting seniors." 
 
 Fellow candidate Donald Trump made similar claims recently. At the time, White House spokesman Josh Earnest insisted the Fed acts independently, saying the administration "goes to great lengths" to ensure the Fed can make decisions solely on the economy's interests and to prevent those decisions from being influenced or even tainted by politics. 
 
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 6:45 p.m. 
 
 One thing the four Republican presidential candidates in the undercard debate can agree on is that none of them wants to name a Democrat in Washington they can work with. 
 
 All four dodged the question during Tuesday's debate in Milwaukee. 
 
 Louisiana Gov. Bobby Jindal declines to answer, saying it's a silly question. 
 
 Former Arkansas Gov. Mike Huckabee uses his time to praise veterans. 
 
 Former Pennsylvania Sen. Rick Santorum says the federal government needs to get out of the infrastructure business. 
 
 And New Jersey Gov. Chris Christie says: "I'll tell you the thing that disturbs me the most about the Democratic Party is they're not standing behind our police officers in this country. They're allowing lawlessness." 
 
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 6:32 p.m. 
 
 Louisiana Gov. Bobby Jindal has turned his attacks to New Jersey Gov. Chris Christie. But Christie just wants to go negative on Hillary Rodham Clinton. 
 
 An energized Jindal criticized Christie's record in New Jersey during the undercard Republican debate, arguing he had grown social programs like Medicaid. 
 
 Jindal said he had the strongest conservative record on the stage, adding, "Records matter." 
 
 During the exchange, Christie kept his focus on the Democratic front-runner. He said the Republicans need to field a candidate that can beat Clinton, noting that he has won as a conservative in a Democratic state. He also joked that while he gets called a lot of names in New Jersey, "liberal is not one of them." 
 
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 6:28 p.m. 
 
 Chris Christie says if he's president, China will have no doubt the United States "means business," whether fighting cyber warfare or projecting military strength. 
 
 Speaking about China's efforts to build islands in the South China Sea, Christie says, "the first thing I'll do with the Chinese is I'll fly Air Force One over those islands. They'll know we mean business." 
 
 Christie, continuing to turn attacks toward Democratic front-runner Hillary Rodham Clinton, says the Obama administration has a "weak and feckless" foreign policy toward China. He says he'd beef up the United States' ability to fend off cyberattacks. 
 
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 6:25 p.m. 
 
 Former Pennsylvania Sen. Rick Santorum says Wisconsin workers should ask Republican presidential candidates opposed to the Export-Import Bank "why we're tying one hand behind their back and saying go out and compete." 
 
 Santorum defended his opposition to the 2008 federal bailout for automakers when asked during Tuesday's fourth Republican candidates' debate whether he stood by that position. Santorum says "I'm a capitalist, not a corporatist." 
 
 He says the auto industry and unions would have survived without Washington picking winners and losers. 
 
 Santorum's defense of the Export-Import Bank comes after General Electric Co. announced in September it was shutting down a plant in Waukesha, not far from the site of Tuesday's debate in Milwaukee, and blamed Congress' refusal to fund the Export-Import Bank. 
 
 Santorum referenced GE shedding jobs in the U.S., but did not reference the nearby plant facing closure. 
 
 ___ 
 
 6:14 p.m. 
 
 New Jersey Gov. Chris Christie has a message for his fellow Republicans on the debate stage: Stop the infighting — Hillary Clinton is the real enemy. 
 
 And to voters, he says: "Hillary Clinton's coming for your wallet, everybody. Don't worry about Huckabee or Jindal, worry about her." 
 
 Christie's jab at Clinton follows a back-and-forth between Bobby Jindal and Mike Huckabee over their records as governors. Jindal is accusing Huckabee of growing the size of Arkansas' government during his tenure. 
 
 Christie's comments on the exchange are reminiscent of an earlier debate during which he called out Carly Fiorina and Donald Trump for an extended exchange over each other's records. 
 
 Looking into the camera, he says: "If you think Mike Huckabee won't be the kind of president who will cut back spending, or Chris Christie, or John Kasich, wait till you see what Hillary Clinton will do to this country. She will drown us in debt. She is the real adversary tonight." 
 
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 6:20 p.m. 
 
 Former Arkansas Gov. Mike Huckabee and Louisiana Gov. Bobby Jindal are bumping heads on budgets. 
 
 Jindal is declaring during the Republican undercard debate that "there's only one of us that has actually cut government spending and you're looking at him." 
 
 But Huckabee is quick to push back. He is touting his own record and says, "it's just not accurate to say nobody else up here has ever cut." 
 
 Jindal responds that spending and taxes went up under Huckabee's watch. 
 
 ___ 
 
 6:10 p.m. 
 
 Louisiana Gov. Bobby Jindal says the United States is "on the path to socialism." 
 
 Jindal said Tuesday during the Republican undercard debate in Milwaukee that the most important question facing voters in the upcoming presidential election is whether people are willing to cut the size of the government to grow the economy. 
 
 He says, "It's not enough just to beat Hillary Clinton, we have to change the direction of our country." He says under President Obama there is "record dependence" on welfare programs. 
 
 Jindal is struggling to break through in the crowded Republican field, and has not been on the main stage in any of the four GOP debates. 
 
 ___ 
 
 6:07 p.m. 
 
 Former Pennsylvania Sen. Rick Santorum says better job training for people coming out of high school is key to strengthening the manufacturing industry. 
 
 Santorum says he visits a manufacturing company once a week and finds open jobs with no one to fill them. He says too many politicians, including his fellow Republicans, wrongly think every high school graduate needs to go on to college. 
 
 He says, "we need to provide opportunities for them to go to work out of high school." 
 
 ___ 
 
 6:06 p.m. 
 
 Former Arkansas Gov. Mike Huckabee is calling for more manufacturing in the United States. 
 
 Huckabee says that if we can't "feed ourselves, fuel ourselves and fight for ourselves," there is no freedom. 
 
 Huckabee continued his call to create a "Fair Tax" that would eliminate federal income and investment taxes and replace them with a 23 percent federal sales tax. He also says he would abolish the Internal Revenue Service. 
 
 Huckabee was on the main stage in the previous Republican debates, but was bumped to the early event tonight due to low polling numbers. 
 
 __ 
 
 6:05 p.m. 
 
 New Jersey Gov. Chris Christie says if he's elected president, he'll "fire a whole bunch of IRS agents." 
 
 The line delivered Tuesday in response to the first question of the fourth Republican undercard debate drew applause from the audience in Milwaukee. 
 
 Christie is trying to have a breakout night after being taken off the main stage. He competed with the frontrunners in the first three debates. 
 
 Christie says he wants to make the tax code fairer by getting rid of all deductions except for home interest and charitable donations. He says his plan would make it so income taxes can be filed in 15 minutes. 
 
 ___ 
 
 6:01 p.m. 
 
 The first question of the undercard debate goes to New Jersey Gov. Chris Christie. He is asked what concrete steps he would take to create jobs. He responds with a story about a woman who approached him in New Hampshire and said she is experiencing anxiety about paying her bills. 
 
 Christie and former Arkansas Gov. Mike Huckabee were relegated to the undercard debate for the first time, because they failed to garner 2.5 percent in the four most recent national polls. Also onstage are Louisiana Gov. Bobby Jindal and former Pennsylvania Sen. Rick Santorum. 
 
 Not on the stage at all, for the first time: South Carolina Sen. Lindsey Graham and former New York Gov. George Pataki, because they failed to get 1 percent support in any one of those four polls. 
 
 ___ 
 
 4:44 p.m. 
 
 GOP presidential candidate Ben Carson is trying to move on from scrutiny over his autobiography. 
 
 Just ahead of the debate Tuesday, Carson's Twitter team posted a video filmed on his way to the venue in Milwaukee. 
 
 In it, Carson says: "It really is not about me, it's about America. It's about what are we going to do for the kids, for the next generations. And I think if we start working together and stop allowing the purveyors of division to prevail, we're going to be just fine because we are the United States of America." 
 
 Carson has generally avoided criticizing his rivals in previous debates. 
 
 But his rivals have not been shy about taking shots at Carson. Billionaire developer Donald Trump has pointedly listed the questions about Carson's claims about what he has described as a violent past. Trump and Carson are the leaders in the wide-open contest for the Republican presidential nomination and will be standing next to each other at center stage Tuesday night. 
 
 ___ 
 
 4:23 p.m. 
 
 GOP presidential candidate Marco Rubio is getting debate night help from a new political group called "Baby Got PAC." 
 
 That's a super PAC funded by John Jordan, a wealthy California winery owner, and named after a popular 1990s song by rapper Sir Mix-A-Lot. 
 
 He and Rick Wilson, a Florida Republican admaker, put together a 60-second commercial that will air Tuesday on Fox News channels, including Fox Business News, which is co-hosting the GOP debate in Milwaukee. 
 
 The spot compliments other Republican presidential hopefuls but promotes Rubio as the strongest potential opponent to Democratic frontrunner Hillary Rodham Clinton. The ad quotes media reports that Clinton supporters — including former President Bill Clinton — view the 44-year-old Florida senator as her toughest potential general election opponent in a field of 15 candidates. 
 
 Jordan formed his own super PAC to spend money on the presidential race, and is putting up roughly $100,000 of his own money. He said other donors have already expressed interest in helping out, and he has several other ads already prepared. Super political action committees can take unlimited amounts of money from contributors but cannot coordinate with the candidates they seek to help. 
 
 Asked about the PAC's name, Jordan says: "You have to be different to stand out. Why not have a little fun with it?"
– Just what did Ron Paul mean when he finished third in Iowa and said, "We are all Austrians now"? Republican candidates don't often celebrate European economic policies, but this is different, Matthew Yglesias writes in Slate. Those familiar with the inside baseball of libertarianism know that Paul is referring to two thinkers, Ludwig Von Mises and Murray Rothbard, whose idea of capitalism "is even more libertarian and anarchic than that espoused by many libertarians," writes Yglesias. "Austrian economics" rejects all government regulation and intervention to help the poor, and considers the tweaking of short-term interest rates a mistake that lures investors into doomed enterprises. Yglesias mounts a counter-argument, noting that the "Austrian" view doesn't explain the effectiveness of post-Great Depression fixes or the spending habits that fuel recessions. Yglesias sees an economic recovery around the corner, but if there isn't one, "these faddish views may gain more steam and perhaps we really all will be Austrians someday soon. But let’s hope not."