When I’m talking to students about Austro-classical ideas, they often ask “Why did Keynesianism win out?” Here’s one answer:
Why did the Keynesian faith win out? Economist salesmen like Keynes focused on the future, a perfect formula for the political class to use to drive growth well into the 1990s. This Keynesian message of growth via inflation and debt was also perfectly aligned with the message produced on Wall Street of ever rising earnings growth and stock prices. With the Keynesian revolution, however, also came debt, inflation, and progressively larger and larger financial and economic busts.
“Growth” via inflation and debt.That’s definitely been the wrong kind of growth.