Speaking of the Fed...
By Arnold Kling
George Selgin, William D. Lastrapes, and Lawrence H. White have a long paper comparing economic performance before and after the Fed was created. They make a strong case that performance has not improved.
I think this history is well worth reviewing. Just as most people casually assume that Roosevelt did a heckuva job during the Great Depression, most people casually assume that the Fed has done a heckuva job with its responsibilities. Do not be surprised if data fail to support such casual assumptions. On the other hand, do not be surprised if people prefer to hold onto their faith in Roosevelt and in the Fed.
On the other hand, my main comment on the paper is that many other structural changes have occurred since 1907. The composition of output has shifted. The structure of production has become more roundabout. We cannot treat the 19th century as a control and the 20th century as an experiment, with only one variable (the Fed) different between the two.