The way I see it, the complexity of today's economy means that old-fashioned Keynesian policies will not restore full employment. Pump-priming and stimulus policies are a good fit for a manufacturing economy with homogeneous labor affected by temporary layoffs. They are not such a good fit for a post-industrial economy with an educated labor force facing permanent structural changes.
Over the next ten years, some sectors of the economy on long-term downward trends will continue to shrink. Sectors that became bloated in recent years, notably mortgage finance, will eventually settle back to lower, sustainable levels. Much of the new strength in the economy will come from underlying long-term forces. New workers will be absorbed by businesses that have not yet been launched in industries that we have not even imagined. For this restructuring, what I like to call The Great Recalculation, Keynesian stimulus will be irrelevant.
This is definitely an oversimplification, but I think what Kling is more or less saying is this: If you owned a house today built in the 1930's that had continually been renovated so it was currently modernized, and suddenly it was devastated by a storm, why would you use 1930's technology, design and materials to repair it?
Also, here is an excellent overview by Kling on the history of monetary and fiscal policy since the 1930's and the effects different economic theories had on those policies.
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