Quote from Martinghoul:
That is not the case and there's an abundance of research to demonstrate that. I can cite you some, if you like.
That's OK. I've already read the comic book version of US history where the interventionist/regulators save the day. I would go watch Avengers
if I were into that sort of thing.
The Great Depression was interventionist all the way (starting with Hoover). The 1920-1921 depression started out really bad, but the young Fed didn't get involved. Interest rates remained around 7%, and the gov't drastically slashed its spending. According to Bennie and the Feds, this should've been a disaster, but it turned out infinitely better than what happend 10 years later.
The idea that we had a totally unfettered economy and a pure gold standard is a myth, however. There's always been some gov't interference, especially since Hamilton. There were bubbles and rocky recoveries thanks to things like the National Bank, Greenbacks, state issuance of bank notes not backed by PMs, etc. So I'm not saying everything was OK before the Fed. Of course, things will never be perfect, but pure market forces handle bubbles and imbalances more efficiently than central planners any day.