FDIC's reduction in bank failures vs. trickle-down economic's INCREASE in bank failures

(During the roaring twenties and the early years of the Great Depression bank failures were routine occurrences. After FDIC was created in late 1933, not so much. Image courtesy of FDIC.)

Before FDIC was created Americans routinely lost their bank deposits when banks failed. For example, between 1930 and 1933, 9,000 banks failed and depositors lost $1.3 billion (about $23 billion in today's dollars). See The FDIC: A History of Confidence and Stability.  

FDIC provides a stable banking system by requiring banks to be insured. This not only protects depositors but also prevents "bank runs" (mass withdraws of money due to panic). FDIC is one of the most successful New Deal creations: "Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure" (see here).

Bank failures by time period:

1921-1929 ("The Roaring Twenties"): 5,711 (hundreds every year, not just 1929)

1930-1933 (The Great Depression): 9,096

1934-1943 (New Deal Years): 355

1944-1949 (FDIC and other regulations firmly in place): 16

1950-1959: 26

1960-1969: 44

1970-1979: 72

1980-1989 (Trickle-down economics & de-regulation): 2,005

1990-1999 (After shaky start, some stability returns): 923

2000-2009: 210

2010-2014 (Great Recession): 339

(Source: FDIC at https://www2.fdic.gov/hsob/SelectRpt.asp?EntryTyp=30&Header=1)

(In the video above, U.S. Senator Elizabeth Warren explains to a skeptical group how financial regulations created during the New Deal era facilitated many decades of stable banking in the U.S. Included is excellent commentary by Cenk Uygur of the Young Turks. It is clear from this video that many commentators, like those Warren is speaking to, have very little understanding of our banking history - yet, they have the public's ear and trust. Amazing. Original YouTube link: https://www.youtube.com/watch?v=nTWfa-iO9Nc.)

FDIC has provided stability for our banking system, even when our economy has suffered from fraud (the recent recession) and trickle-down economics (i.e., massive tax cuts for the rich, financial de-regulation, and austerity that primarily preys upon the finances of the middle-class & poor).

It will only be a matter of time before Republican and Libertarian politicians try to eliminate FDIC in their quest for an economy with absolutely no regulations (their Ayn Rand utopia), as well as to satisfy their desire to eliminate every government program that assists the non-wealthy. When that day comes, next year or 50 years from now, Americans will once again lose their money when fraudulent & incompetent banks fail. And, unaware of their New Deal history, they will throw up their hands and say, "What happened?", just as Alan Greenspan (a major Ayn Rand devotee) said of the massive mortgage & securities fraud that occurred after years of weakened regulatory oversight, "A critical pillar to market competition and free markets did break down. I still do not fully understand why it happened."

No Mr. Greenspan, you certainly don't.