The Federal Reserve was created in 1913 to help stabilize the economy and prevent recessions, particularly like those which occurred in 1873, 1893 and 1907.
The Fed was to stimulate in down periods and de-stimulate when growth became too frothy.
The Fed started its duties in 1914. Has it done its job?
Here’s its record: America has had recessions in 1918-19, 1920-21, 1923-24, 1926-27, 1945, 1948-49, 1953-54, 1957-58, 1960-61, 1969-70, 1973-75, 1980-82, 1990-91, 2001 and 2008-09, plus a horrendous depression lasting from 1929 to 1941.
The 2008-09 recession is now entering into what is termed a double-dip recession, and has all the earmarks of becoming another depression.
As to de-stimulating an overheated economy, the Fed has also failed. It failed to act during the gigantic stock market bubbles of the 1920s and 1990s. It failed to apply the brakes to the housing bubble of the early 2000s that ended tragically for millions of homeowners.
The Fed actually encouraged these bubbles and then later claimed no one could have foreseen the fallout.