Regarding the May jobs report released Friday 06/01/2012, yet another abysmal jobs report, making three straight jobs reports of subaqueous nature, the headline unemployment rate ticked up to 8.2%.
Fast forward to The Great Recession. Bernanke deploys Friedman and Schwartz’s prescription and does not allow the money stock to contract. However, according to F.A. Hayek monetary policy has limitations. Hence with the money stock in a non-contraction phase and reverse fractional banking avoided, monetary policy has been deployed successfully and to count on monetary policy to do much more is pushing monetary policy limits.
Given the above, in both instances, Great Depression and Great Recession, Keynesian deficit spending plans were deployed. Keep in mind that the two items that receive the most attention regarding economic argument, debate, research, etc. regarding the Great Depression are Keynesian deficit spending and Federal Reserve policy. One must then consider the monetary policy was successfully deployed during the Great Recession via lessons learned from the Great Depression. This leaves only the other major component to discuss which is Keynesian deficit spending.
Keynes believed that economists (and others) could best contribute to the improvement of society by investigating how to manipulate the levers actually or potentially under control of the political authorities so as to achieve desirable ends, and then persuading benevolent civil servants and elected officials to follow their advice. The role of voters is to elect persons with the right moral values to office and then let them run the country. - Milton Friedman (2)
(1) America's Transition To A Part-Time Worker Society Accelerates As Part-Time Jobs Hit Record, 06/02/2012, Zero Hedge
(2) Milton Friedman, Richmond Federal Reserve Economic Quarterly, volume 83/2 Spring 1997.
(3) After Keynesian Economics aka After the Phillips Curve: Persistence of High Inflation and High Unemployment, page 57, Lucas and Sargent.
(4) F.A. Hayek, from the essay The Pretense of Knowledge