I would have responded with,
"First of all, both the mainstream and the Austrian school employ deductive reasoning and what is known as the scientific method. It is not the case that the Austrians reject empirical evidence; in fact, many Austrian economists do a lot of empirical work in many areas, including, for example, monetary theory and business cycle analysis. Additionally, it’s not the case that the mainstream dismisses discursive reasoning. All economic models, including mathematical models, are based on certain assumptions and deductive reasoning. Both the mainstream and the Austrian school hold many of the same assumptions, and this is due to the fact that the mainstream has deep Austrian roots. Now obviously there are few assumptions that the Austrian’s hold which are rejected by the mainstream, but there aren’t many.
Next, regarding the merit of Austrian theory, I simply ask that you use Milton Friedman’s test of a good theory, namely its ability to explain real world economic phenomena. I believe that the Austrian framework can best explain the conditions we see today.”
I probably would have quoted a few passages from Wicksell, who explicitly said that a potential consequence of a credit expansion could be a relative overproduction of houses and a relative scarcity of consumer goods such as foodstuffs, which would appear later in the process. But of course DiLorenzo was not given a chance to respond. Unfortunately, this hearing will probably perpetuate the myth that Austrians are nothing but anti-government racist radicals who confuse science with religion.