Crowding out

Keynesian oil shortages crowd out the private sector

The Keynesian desire to increase the production of central government goods crowds out tomato farming in Fresno,CA.  See the three peaks in oil prices, July 2008, June 2009, and June 2011.  These peaks coincides mostly with attempts at increasing the economy of the DC government goods production.  It works, each increment of economic growth in DC consumes oil and causes some partition of tomato farmers to exit the business in central valley, CA.

Under shortage situations, the short input determines interest rates.  Interest rates are low because the private sector backs off when DC Keynesians start another oil consumption run.