I didn't say it was proof. It is merely prima facie evidence that government intervention to "rescue" the banking system had the exact opposite effect to it's stated purpose. Before the government intervened to "fix" things, there was never an economic crisis on the scale of the Great Depression. Within sixteen years of the "fix," the whole system went to hell in a handbasket. Whatever else you can say, that doesn't speak well for the wisdom of government meddling in the economy, does it?
I'm not familiar enough with economic history to give you a proper answer. I know there were all sorts of tremendous bank failures in this country during the 19th century. I know that the '30s on the West coast were hardly the great depression that the rest of the country felt. I know the depression was world-wide...and that in many other countries it was far worse than here.
Maybe the depression of the '30s was so bad due to an accumulation of things. Maybe it was a result of the world-wide integration of the economy. Maybe it was the result of the unrestrained and unregulated boom of the '20s. Maybe it was due to Smoot-Hawley. Maybe to an uninformed and misguided response of the monetary authorities.
All these reasons and many more have been advanced as causes. I can't figure out which ones - if any - are correct.
I'll stick with my original response. I don't know whether things would have been better or worse had the government not intervened. I don't know whether the Europeans should be criticized for their welfare state - or whether it will turn out that we can handle the down-side of capitalism better than they can. I'm hoping that Bush's Iraq strategy will obviate the need to find out.