What needs to happen

I think the unemployment extensions coupled with the employers refusing to accept resumes from "overqualified" people is prolonging the recession (which at this point economically outlasted the great depression). In previous recessions, we all humbled ourselves and took a step or two back from our current pay grade.. worked a lower job, whatever you want to call it. It paid the bills and after 8-9 months, you were back above board. We'd paid back our creditors enabling them to pay their vendors. then consumer spending would amp up and development would improve increasing the creation of jobs. I'm no economist but this is how I've seen it work in the past and all the current economists are doing is finger pointing and blaming wet sidewalks for rain.

Start hiring upper level professionals for mid level jobs. Who cares if they leave in 6 months? The jobs you need done now will be done, most likely done right by a more experienced person, and the market will right itself creating a healthy market for everyone.