Although the title is FDIC and Federal Reserve (FRB) I will deal with them as they were created.
The Federal Reserve was instituted under President Woodrow Wilson. Wilson being a true Progressive of his time felt the government should regulate banking more closely. It also was given the power to impact the economy. David G Wells writing on the site thefreemanonline.org argues that Federal intervention from the time of Lincoln has only made the banking situation worse. To be sure the great depression and the run on the banks beginning in 1932 were direct results of either federal intervention or perceived intervention. The institution established in 1913 under Woodrow Wilson failed to control either the economy and the banking industry. A lack of confidence in the institution was what drove the panics and history may well repeat itself.
But fear not after the panics in 1929 and 1932 the feds reacted by putting the FDIC in place. The Federal Deposit Insurance Commission singed into law by the next great progressive president FDR established the Feds as the insurer of your money. One of the first things the FDIC did was examine banks that chose not to get involved with the FRB. Once again the Feds grab hold of an entire segment of the economy under progressive control in the White House.
With the rules in place for Fractional reserve by the FRB and the FDIC guarantee of our deposits, then add in the true federal debt and what we are living right now is the potential for a depression greater than any in our past. How can a government that is trillions of dollars in debt insure our money if there is a panic. They can’t! what is really scary to those of us who understand the danger is that both of while these Government agencies have parts of their respective websites dedicate to educating our kids about their good works. Have a look at real propaganda.
When will the people learn that government intervention is not the best course. Let’s really begin the rollback and either eliminate or defund these agencies .
There has been some debate about a bill introduce by Dennis Kucinich of Ohio looking to eliminate the FRB. While the bill on its face is a great idea there are parts that were added at the end to guarantee funding for some of Obama’s agenda that need to be repealed. Fixing the FDIC and FRB is a great idea. How is the real question. Pain in many sectors will be the norm until we fix our system. It would be tough to fix 70 years of damage by Progressives. Just look how hard it will be to fix the last two years of spending. By all means research the history of banking before the creation of the FRB. States rights once again were trampled by the Federal Government.