How the stimulus crowded out and nearly caused a double dip

Look at the California unemployment rate, the red line.  Notice, at the peak, twice it tried to come back down, only to be driven back up by the stimulus, the purple line. How do we know? Because the green line, the oil price, clearly indicated we suffered from an oil shortage.  The stimulus drove that price back up, and as soon as the stimulus drove it back up, crowding out appeared and California began laying off again. You can see that happen twice, yet we see no effect in actually reduing unemplyment, none.

The Housing Ruse:

Keynesian knew that their policies were not valid in the middle of a commodity shortage, they had to invent a theory of low demand. Hence the Dean Baker wealth effect from housing. The idea was that we suffered lasting demand from a housing crash in 2006, a downturn in housing that did not show up until 2008! And that lack of demand shows up as an oil shortage, yet oil imports to the USA were running at an all time high, indicating no lack of demand, until the crash.  The ruse was necessary in order to cover up the blunders of the stimulus and to further extract more useless spending in DC. Yet the facts obviously indicate otherwise as we can see from the oil price movements in the chart above.

The monetary ruse:

The nonsensical idea that the Fed somehow helped in lowering interest rates in 2007? All evidence indicates the bond market has been setting rates since 2003. Further there has been no mechanism for the fed to raise rates since Volcker used the reserve requirements mechanism.  Likely in the 40 years since Volcker the Fed has been basically ineffective in raising rates, and only effective in lowering rates to bail out an indebted government. Most of the secular stagnation is due to mis-management in DC. To this day monetary theory is ass backwards, mainly due to Keynes. Keynesians resort to some expectation function, essentially a fake function in which they pile in their priors, then pick the  output meets their priors.

Massive fraud perpetuated by Berkeley:

Not only this the stimulus crowd out and cause harm, it likely prolonged the entire recession and caused lasting damage.  Further, in an effort to protect the Keynesian club, the Berkeley demanded up to 30 economists sign the McCarthy Keynesian loyalty oath claiming exactly the opposite effect.  One of the greatest frauds in academic history. Professors from California, pursued policies in California that likely precipitated much of the recession (it started in California). These same professors made it worse, covered up their damage, and have never stopped causing havok.

John Keynes, an academic horror show:

From monetary theory stimulus and the ludicrous national accounts scheme, this man was mathematically incompetent in his time.  He was a nightmare in the American academic community only gaining a foothold because of American ignorance about the developing science of statistics.  Milt Friedman performed yeoman's work to try and get this stuff corrected. His theory should be abolished from undergraduate school completely, and young students should beware of professors teaching it.

DC is effectively bankrupt :

Ignorant central bankers are simply pawns,  The Treasury department cannot make a move without the express rate fixing required by Goldman Sachs and a group of primary dealers. The market could simply not absorb the debt load of 17T without market fixing the rates up.  QE had nothing to do with juicing the stock market, DC would have simply failed it it needed to cover all that interest.  Congress cannot function with interest costs exceeding 20% of the budget, Reagan tried it an we crashed.  Clinton managed it only by a rapid deficit reduction.  Today, Obama is simply incapable of managing the budget the way Clinton did it, and I doubt any  president can get Congress through a session without direction and control from the Wall Street Banks.  We live at the end of the DC era, regions of the US should look locally for new money and new government.