Arnold Kling is ripe for the The Sect of Austrian Economics. Actually I doubt he will come around on defense. Just remember Arnold that war is the health of the state. But let me talk about the Austrian theory of the business cycle, and the analogy Kling makes to restaurants. Briefly stated, Kling gets it all wrong.
One the key Austrian insights as regards money is that, ideally, the interest rate is a market-created phenomenon. People don't actually hold more than token amounts of money as money. Instead they either spend it (consuming now), or invest it (consuming it later). All spending is aimed towards consumption; the question is simply now or later. The interest rate is a price, like the price of bananas, that reveals the outcome of that negotiation by all parties in the economy: from both the consumer/investor side, and the producer/borrower side. Alternatively it can be helpful to see the spend/save decision as a decision to spend, either on consumer goods or capital goods.
Now what happens when the interest rate is in some manner falsified? Well, as economists we know what happens when the price system is interfered with: it's always bad. Let's take for example bananas. What happens when the price of bananas is falsified? If the price of bananas goes low, then producers cease to supply them, and consumers find them a great deal. Thus a shortage erupts, and (absent the ability for the price to change), bananas must be rationed by some non-price method. If the price of bananas goes high, then producers rush to plant more trees, banana production increases, but meanwhile consumers aren't buying. Bananas pile up in the stores. Bananas rot.
Bad outcomes result no matter if the price if falsified as too low, or too high. (And note that you are invited to plug in "marginal" in the above paragraph in 27 places if that helps you feel good about it.)
The same is true with the price of money. Interest rates are routinely depressed via central bank manipulation. This will predictably cause people to stop saving (why save if interest rates are pathetically low), and it predictably will cause capital spending to increase (the rate signals that people want goods in the future). So people spend on current consumption (keeping all of the businesses concerned with current consuption busy), and businesses expand (keeping all of the businesses which make capital goods busy). Everyone is busy - that's a boom. But there is no future consumption - the businesses were fooled. The interest rate "lied" to them. So eventually, when the new productive capacity comes online, there is overproduction. More is being produced than people want to consume. The capital structure of the economy is disaligned with the consumer reality. That's the recession part of the cycle.
Now, Kling makes some very imprecise restaurant analogies from the simple theory above. You can read them yourself. So what's more straightforward: the idea that waiters can submit extra orders, and thereby cause the cooks to be frantically busy? Or that the cooks just get manic every so often? If you think of there being only one or two cooks, maybe that is plausible. But we are analogizing cooks to be the entrepreneurs and business owners of the whole economy - so we must imagine many, many cooks. How likely is it that 100 cooks in a large restaurant all happen to be manic-depressives, and all skip their medicine the same day, and all get manic together? Yet Kling is apparently happy with the notion that all of the sanest, wisest leaders in a modern economy can get a bit manic synchronously.
By contrast, what are the waiters being analogized to? Banks. Banks are the middlemen in the economy between people saving and business. What are the chances of a large number of a waiters all turning in extra orders? Well, in a normal restaurant not large. But that's where the analogy just fails. For in our economy, banks are cartelized, and there is one single central bank which can cause the entire system to inflate. So, in terms of the restaurant analog, we might imagine that the owner hangs out at the place. He believes that the waiters are deliberately "under ordering" food, and he thinks he should therefore "juice the kitchen economy" by making lots of orders that he is sure the patrons will end up wanting. But if the waiters aren't under ordering, what we have is a system that will waste a lot of food.
Note that this analogy does point out one thing wrt the theory of the business cycle: it is quite possible for the system to be in a steady state, the owner continually falsifying kitchen orders and food continually being wasted and thrown out. Only if the owner submits his extra orders in blocks (then backs off when the piled up food is clearly visible) do we get something analogous to the business cycle. Which of these is better analogous to the real economy, I don't know. What is clear, though, is that no matter how it happens, for the owner to order extra food that nobody wants is clearly wasteful.