Last night on The O'Reilly Factor, Bill asked me skeptically about Ron Paul's wanting to "do away with the Fed."
I replied that I agreed that it was a fatal conceit to think that a committee of twelve men should have so much power. I also said that a recession that began in 1920 ended quickly, and there was "no Fed " at the time. I was wrong! The Federal Reserve was actually created seven years before. Also, it's called the "depression' of 1920-21.
My stalkers at Media Matters were kind enough to point this out, but my argument is still correct. The Fed wasn't around to engineer America's recovery from the Panic of 1893. In fact, throughout the 1800s, the American economy recovered from many recessions without help from a Federal Reserve.
Since then, the Fed has become much larger and more powerful. The Fed wasn't the primary tool for influencing economic growth and employment until the 1970s.
The purpose of the Federal Reserve is to eliminate banking panics and to encourage economic recovery. But today, almost 100 years after the creation of the Fed, we're in the midst of the biggest banking crisis since the Great Depression. Normally, when something doesn't meet its stated objective, it gets eliminated. Not in government.