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> Yes, they used that specific panic as an excuse for starting the Fed. Except the Federal Reserve wasn't even the first central bank of the US: * https://en.

> Yes, they used that specific panic as an excuse for starting the Fed. Except the Federal Reserve wasn't even the first central bank of the US: * https://en.wikipedia.org/wiki/First_Bank_of_the_United_States https://en.wikipedia.org/wiki/First_Bank_of_the_United_State... * https://en.wikipedia.org/wiki/Second_Bank_of_the_United_States https://en.wikipedia.org/wiki/Second_Bank_of_the_United_Stat... The Fed is primarily a clearing house and lender of last resort, which is needed because having individuals like JP Morgan rescue the financial system when it goes haywire stopped being possible long ago. * https://en.wikipedia.org/wiki/Panic_of_1907#J._P._Morgan https://en.wikipedia.org/wiki/Panic_of_1907#J._P._Morgan > In any case, empirically the US had more and worse recessions and crises after the Fed was created than before. Count how many times the word "panic" occurs before the Fed was formed (1913) versus after: * https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit... * https://en.wikipedia.org/wiki/List_of_economic_crises#18th_century https://en.wikipedia.org/wiki/List_of_economic_crises#18th_c... I cannot fathom how someone can think the US has had it worse economically post-WW1 (and especially post-WW2) than pre-WW1.

eru 4y ago
> The Fed is primarily a clearing house and lender of last resort, which is needed because having individuals like JP Morgan rescue the financial system when it goes haywire stopped being possible long ago. The Canadians never had such crises, and neither did they have a central bank. The American banking system was uniquely fragile, thanks to its widespread bans on branch banking: if most or all of your banks only have a single office in a single city, they are bound to be more fragile. > Count how many times the word "panic" occurs before the Fed was formed (1913) versus after: Language evolves? Recessions were deeper after the Fed was established. Btw, have a look at this https://www.econlib.org/archives/2011/12/why_no_mini-rec.html https://www.econlib.org/archives/2011/12/why_no_mini-rec.htm...

eru 4y ago

> The Fed is primarily a clearing house and lender of last resort, which is needed because having individuals like JP Morgan rescue the financial system when it goes haywire stopped being possible long ago. The Canadians never had such crises, and neither did they have a central bank. The American banking system was uniquely fragile, thanks to its widespread bans on branch banking: if most or all of your banks only have a single office in a single city, they are bound to be more fragile. > Count how many times the word "panic" occurs before the Fed was formed (1913) versus after: Language evolves? Recessions were deeper after the Fed was established. Btw, have a look at this https://www.econlib.org/archives/2011/12/why_no_mini-rec.html https://www.econlib.org/archives/2011/12/why_no_mini-rec.htm...