Real unemployment over vast regions of Europe and North America is at a post WWII high. Redefinition of unemployment conceals most of the damage. In the US, for example, current unemployment if measured as it was during the Reagan era would be at least equal to the Department of Labor's U6 measure, which now stands at 10%. But that is probably a vast underestimate since we know there are 95 million working-age Americans who are not working, meaning that there are many who would like a job but have given up trying to find one and who are not therefore classified as unemployed. In addition, there are millions who want full-time work but can find only part-time work.
It is now generally agreed that mass unemployment during the Great Depression was caused by a contraction of the money supply due to a failure of central banks to provide monetary easing in a timely fashion. The solution, recognized by Lord Maynard Keynes, and promptly applied, to Keynes delight, by Adolf Hitler, was money printing and deficit government spending.
Since 2008, the Western states have tried endless money printing, easy credit and government deficit spending, but with not much to show for it. Still millions and tens of millions of people in their 20's and now increasingly in their 30's, are living with their parents because they are too poor to move out. Meantime, the US labor force participation rate continues to fall, as it has done ever since 2008.
So why, then, does Keynsianism not work today if it was what worked in the 30's when and where it was tried? The answer is, globalization. In the 30's the US economy, and to a lesser extent that of Europe, was self-contained, whereas today, US exports as a share of GDP are three times greater than in the 30's, and imports as a share of GDP have quadrupled.
A consequence of this opening of the US and other Western economies to the rest of the World is that money printing and deficit spending tends to pull in more imports from the cheap labor areas of the world — car parts and computers, shoes and shirts and just about any other labor-intensive manufactured product you can think of — rather than stimulating home production. Meantime, so far as it supports the labor market at home, the effect of such stimulus is to prop wages up, hence delaying the downward adjustment necessary to achieve parity with the Third-World manufacturing and service centers in China, India and many other countries.
The implication, then, is that what is needed is not looser money and abundant credit, but the exact opposite, this to drive unemployment up in the short-run to achieve price deflation, including deflation in labor costs. In other words, life may be tough for school and college leavers seeking jobs, but they need to be tougher, so tough in fact, that workforce entrants are willing to work for sweatshop wages, as do the illegal immigrants employed in the booming US and European underground economies.
Naturally, no one is going to talk about this solution to the unemployment problem since its a guaranteed loser election platform. Still it's a solution that may be about to be tried. The only alternatives being continued widespread misery due to unemployment, or a return to protectionism, a key feature of Trumponomics, but anathema to the financial elite.
CanSpeccy: Barbgate: How Western elites opened the gates and what to do about it