: minor as % of all, huge as a 'player'
Uh-huh, its the former we can gauge, the latter becomes more difficult...
: It can be shown to have cause in various aspects, and having an effect to make it worse throughout those ever popular run downs in 19th century US fledgling economy.
Making it worse is different, qualitaively, than cause.
: What is notable is that some banks dealt with it better (eg the New England example) and having done so the same strategy gets used all over. a learning curve.
Same happened in England, they kinda learnt from their mistakes ;)
: I wouldnt suggest that panics and down turns are impossible without government, I would suggest that the govt cure is often worse than the disease, having an effect of carrying over and exagerating the calamity for longer and into the future (leading to new controls which lead to new crises etc etc). its a slippery slope of intervention to which I see little benefit and much disbenefit.
WEll, I would never use the term 'panic', it implies some sort of subjective volition (i.e. when politicians talk against 'talking down the economy' or banking crises as being a crisis of confidence), when in fact such crisis are usually responses to a crisis in the real economy. If it was a simple act of volition, people ciould will money back inrto normality, as it is, money can only ever reflect the economic base (pace the money crankery of the Green Party of England&Wales, banks do not make money, only governments can and do.).
Governments cannot cure crises, they can, i would hold, exacerbate them, but they cannot have an overall effect in starting or ending one.
: Ofcourse it would be jolly nice if such things never happened, if we all communicated honestly, we all trusted eachother because we were all 100% trustworthy, the banking system (or lack of it) was based upon actual exchangable (or usable) value and not state or fraudulently backed credit etc etc.
You can still get inflation in a Gold based currency, and you still need a state to regulate issues of paper notes. Further, crises are not based on loss of trust, banks start to get shirty when people default on loans, and they find they can't make safe investments any more...