Keynesians (the real ones, not the so-called New Keynesians) understood stagflation as it was happening. There was a deadlock between capital and labor. The oil

Keynesians (the real ones, not the so-called New Keynesians) understood stagflation as it was happening. There was a deadlock between capital and labor. The oil embargo starting in 1973 lowered America’s real income. The question was who was going to suffer for it. It led to a political crisis, which in the short run was handled by allowing wages and prices to both run up, but it was eventually resolved in favor of capital during the Volcker shock, which deliberately created mass unemployment to undermine worker power. It didn’t have to turn out this way, though. There were other options. Here’s an excellent article: https://nplusonemag.com/issue-34/reviews/other-peoples-blood-2/ https://nplusonemag.com/issue-34/reviews/other-peoples-blood...