The banking and other economic factors of selected U.S. historical events: from the establishment of the Federal Reserve Banking System to the Great Recession

Knowledge in the economic and banking history of the United States, of the last one hundred years or thereabouts, is necessary in any discussions of even current economic and political policies. This article looks at major economic events in the last century, with some attention also given to surrounding political forces of these events. In 1933, President Franklin Roosevelt, with strong bipartisan support in Congress, was able to pass the Glass-Stegall Act, after taking office in the Great Depression. Politicians in the United States during the approximately twenty-five years prior to the bursting of the housing bubble in 2007 have both used legislation to remove regulations and also made sure that inadequate government personnel were available to audit financial institutions. An important part of confidence is a faith in government regulatory agencies that monitor financial institutions. Lax monetary and regulatory policies can create a real estate bubble. This happened in the most recent economic disaster, the Great Recession. Sometimes the Federal Reserve has pursued reasonable monetary policy and other times inappropriate decreases or increases in the money supply have created havoc in the national economy. Keywords: banking, Federal Reserve Bank System, financial crisis, Great Depression, Great Recession, Taylor rule for central banks. JEL Classification: G21, E5, G01, N11, N12