I don't agree with everything in this piece, by Jim Tankersley, but it is a good overview of why currently high unemployment isn't just about demand (though it is about that too). Excerpt:
Blinded by low unemployment, lawmakers and economists overlooked two crucial warning signs of the nation’s deteriorating economic health. One was the percentage of working-aged men–the traditional backbone of the U.S. labor force–who held a job. The other was the number of jobs being created each month. Throughout the 2000s, both numbers nose-dived.
[David] Autor is pioneering the research into what he calls the “polarization” of American jobs into low- and high-skill camps, but even he isn’t sure whether his findings explain our national jobs crisis or result from it. “I don’t have a simple answer,” he wrote in an e-mail recently. “I think the prosperity in the 2000s, even prior to the crisis, was quite ephemeral, bordering on illusory. I’m not sure that’s a result of polarization per se. But it is a mystery why the good times ended” at the turn of the century. The completed circle of losses and gains from globalization, he added, is “what is supposed to happen in the long run. But it requires investment, adjustment, adaptation.”
Read the whole thing. I believe that the prominence and persistence of "demand-only" theorists in the blogosphere (DeLong, Krugman, Sumner, and others) give blog readers quite a skewed picture of the actual debate.