Why is it possible to have multiple equilibria below the level of full employment in the Keynesian model?

Why is it possible to have multiple equilibria below the level of full employment in the Keynesian model of income/output determination? How can we reach full employment?

Why is it possible to have multiple equilibria below the level of full employment in the Keynesian model?
Actually, it is my understanding that full employment is not the main goal of Keynesian economics. That system was made primarily to ensure economic stability sufficient to prevent future deflations and depressions like what were once commonplace in America--happening every few years, read your history--from about the late 1880s to the late 1930s. With the age of Robber Barons, concentration of wealth in the hands of a *very few* by the companies really started to become an economic force that was mainly destructive to society, as when ordinary working people *ran out of liquid assets*, either money or property to barter, whole economic sectors were prone to collapse. There would be food to buy but no one able to buy it, for example.





Keynesian economic systems work mainly through a combination of bank policy and political leniency in social welfare programs for citizens who are out of work, to create a system by which people by and large *don't* run out of money. Inflation is an issue with these systems, because what you are doing really is having government and political policy *intercede* and compensate for the worst excesses of Big Business so that people's lives aren't ruined and sent headlong into the gutter every few years with each downturn. And this makes the process less than ideal, since the primary tools government has to keep ordinary people *in money* are either deficit spending or inflation of currency (the "print more money" solution). Never mind that Big Business *itself* has a perpetual grudge against this sort of thing as the Fat Cats/CEOs generally only get their jollies on when they can make *hideously bad* profits after bad profits after good ones....meaning, to put it in lyrical terms, "I want it all/I want it ALL/ I want IT ALL/ And I WANT IT NOW/"





Even if it means having the bottom 80-90 percent of the population *ruined* economically. But I digress...





Point is, Keynesian economics, as flawed as it was, actually *allowed* Big Business as usual to keep on going without so much overtly socialist government policy going on (assuming you prefer mere social welfare policy to ones of property seizure and forced redistribution--on a scale much larger and *much* more direct than any sort of income tax). It allowed capitalism as we know it to carry on without letting the bottom end of society get so bad that labor and anarchist movements take root either socially or politically.





But *no*, we couldn't have that, could we? Nope, we had to let the yuppie/CEO/greedheads *break that*. And replace it with what exactly? A Tax CUT and Spend policy designed to *bankrupt* government both politically and morally to such a degree that it can never intercede on the citizen's behalf against the Almighty Corporate ever again....





And I have news for you. If our elected government *cannot* stand between ordinary people and *monstrously* huge Big Business....*Nobody will* stand up for us. No one can, the difference in size, scale, and *concentration of wealth* is too great.





But again....I digress, sorry. It's easy to confuse the economic with the societal and political when Keynes is in the discussion isn't it? ^_^





The point really is....full employment was never the agenda. *Stability* at any price was the agenda. Protecting the Rich Guys from their own Greed and its Societal Consequences was the agenda. And why was this....?





Look to France for your answer. When people get so poor and so desperate that they can't buy *bread*, the words "Let them Eat Cake" are not a legitimate answer. They are an incitement to riot. And kill.





The *miracle* in all of this is that there is still enough resiliency left in the tattered ruins of our nation's safety nets that we can *tolerate* losing a whole city--New Orleans to Katrina--and be too busy with Iraq and with Anna Nicole Smith to run riot in the streets because *another city* in America sank into barbarity.





The question remains...how much longer do the CEOs who have backstabbed us all dare to push their luck, now that *their* safety net is gone?





Thanks for your time. ^_^ I am sure everyone and his primate next-o-kin will hate me now and give me the thumbs down....
Reply:This is an incredibly complicated question, but two factors I've not seen in other answers are 1. the natural creation of the Keynesian model of a floor for wages under which workers are actually financially discouraged from working via social welfare programs. This keeps (to some extent) big business from exploiting the common man b/c at a certain point they risk losing their workforce if they take away another benefit. 2. (I'm editorializing a bit here) Based on his suggested policy approach, Keynes seems to believe that 100% employment potentially sacrifices progress at crucial times (IE WWII, the tech boom of the 90s) b/c there is no reserve workforce to immediately increase productivity when the opportunity to do so presents itself. These factors, combined with the Keynesian safeguarding of the lower class through gov't programs seem to generate an optimal employment level below 100%.

pulling teeth