As discussed previously (Has The Creation Of The Fed Increased Economic Instability?), the research of economists Christina Romer and Jeffrey Mirons reveals similar patterns as those identified by Joseph Davis in his research. Namely, that the pre-Fed period of the United States was no more unstable, and in fact perhaps, more stable, than the post-Fed period through today. The free-market can and does self-correct in a much more stable manner than an interventionist government; that is, than a statist or collectivist government.
In fact, the Great Recession of 2007 illustrates how our leaders mirrored the same interventional damage as Presidents Hoover and Roosevelt, from the 1930s. Following the crash of 2007 the Federal government interventional policies prolonged the recovery longer than any post-WWII recession. “Since the Great Depression, and before this last recession , recessions in America have lasted 10 month on average, with the longest previously lasting 16 months.” But as of July 2012, the Great Recession of 2007 remained lingering at only a 43.8 percent unemployment recovery while already at a post-WWII record length of 28 months – where we saw the country completely recovering within 21 months.
Dr. Elmus Wicker, great historian and economics researcher, also concluded “that bank failures per se were not a reliable indicator of the banking panic experience outside of New York. It was the suspension of cash payments and not bank runs nor bank failures through which the public in the rest of the country experienced the effects of banking panics. The 1893 panic stands entirely alone among the panics of the national banking era but resembles closely those of the Great Depression… For the most part the general public had little or no direct experience of bank runs and bank failures.”
Dr. Wicker reveals how 4.2% of banks were suspended as a result of the Panic of 1873. This figure is equivalent to the total number of banks suspended in total over the three episodes of the Great Depression; 1930 at 3.4 percent, 1931 episode 1 at 2.95 percent, and 1931 episode 2 at 4.27 percent, while other supposed Panics were well under 1 percent. Dr. Wicker further clarifies that the Panics of the Gilded Age were no Panics at all, but, in fact, corrections, with 1893 being the only exception.
For example, the supposed Panics of 1884 and 1890 were no Panics at all. Stock prices “declined by 8.5 percent in May 1884 and 7.2 percent in November 1890,” reports Dr. Wicker, “By comparison, the [Cowles] index declined by 10 percent in October 1929 and 33 percent between September and October.” Wicker continues, “What happened in 1929 was not repeated in 1884 and 1890… The main characteristics of the decade of the 1890s were continuous price deflation and positive rates of economic growth… [therefore] … The money market disturbances in 1884 and 1890 do not qualify as full-scale banking panics.”
In fact, “As early as 1915 and 1916, various Board Governors [Heads of Federal Reserve Board] had urged banks to discount from the Federal Reserve and extend credit, and Comptroller John Skelton Williams urged farmers to borrow and hold their crops for a higher price. This policy was continued in full force after the war [WWI].” The result of this policy and pressure was a catastrophic crash of farm and agriculture property completely parallel to the housing and real estate crash of 2008.
Throughout the 20th century until today the Fed has failed its own stated purpose. The Federal Reserve’s modern version of its purpose discloses its failed intent:
It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system.
 See Table 2, Miron-Romer Index of Industrial Production, 1884-1940, Jeffrey A. Miron and Christina D. Romer, June 1990, “A New Monthly Index of Industrial Production, 1884-1940,” The Journal of Economic History, Vol. 50, No. 2, pp. 336-337.
 Peter Ferrara, July 7, 2012, “Obamanomics is Final Mail in Keynesians’ Coffin,” Townhall.com, [http://townhall.com/columnists/peterferrara/2012/07/17/obamanomics_is_final_nail_in_keynesians_coffin/page/full/].
 Bill McBride, July 6, 2012, “Employment: Another Weak Report,” Calculated Risk: Finance & Economics, [http://www.calculatedriskblog.com/2012/07/employment-another-weak-report-more.html]. See graph: Percent Job Losses in Post WWII Recessions, aligned at maximum job losses.
 Elmus Wicker, 2000, Banking Panics of the Gilded Age, (Cambridge, UK: Cambridge University Press), p. 2, p. 6, and p. 7.
 Elmus Wicker, 2000, Banking Panics of the Gilded Age, (Cambridge, UK: Cambridge University Press), p. 6, also see Table 1.4 on page 6.
 Elmus Wicker, 2000, Banking Panics of the Gilded Age, (Cambridge, UK: Cambridge University Press), p. 50.
 Murray N. Rothbard, 2008 (originally published in 1963), America’s Great Depression, (Auburn, AL: Ludwig von Mises Institute), p. 121.
 For details on the farm and agriculture economic crash of 1920 see George W. Dowrie, January 1925, “Did Deflation Ruin the Farmer and Would Inflation Save Him?” American Farm Economics Association: Journal of Farm Economics, Vol. 7, No. 1, pp. 67-79.
 Board of Governors of the Federal Reserve System, June 2005, The Federal Reserve System: Purposes & Functions, Washington D.C., p. 1. [http://www.federalreserve.gov/pf/pdf/pf_1.pdf].