One important thing stopping the current depression from being as catastrophic as the great depression is the policy of the Federal Reserve (which is hugely influenced by Goldman Sachs) of printing money and keeping interest rates at 0%. If they didn't do that, we'd be far worse off right now.
So yes, as far as regulating the money supply goes, I'd trust the directors of Goldman Sachs over some algorithm any day, especially when that algorithm seems to have been designed by people with a very dogmatic theory of value, a theory that history demonstrates is incompatible with happiness.
Another school of thought also says that inflation is a second form (after the taxes) of government oppression over the citizens; and that truely free currency should avoid both forms of government oppression: inflation and taxation.
It isn't an either/or scenario. Parallel currencies for the win!
Even if we are talking about comercial banking as apposed to investment banking, little changes.Bitcoin is just a protocol. However, as more people interact with it via exchanges that may hold their private keys(think mtgox,bitconica, etc), we start to see things that look a lot like comercial banks: organizations run by people entrusted with the currency you store with them. The owners of these "banks",whether we white guys tanned by trips to the cayman islands and the vineyard or monitor-tanned cipher-punks of some more cuddly ethnicity/gender, can and eventually will abuse that privilege. The will abscond with peoples money, commit fraud, issue bad lonas and do any number of other things with it. Moreover, in the case of bitcoin exchanges,there is very little regulation and no legal recourse in the event of theft or default(since all transactions are final and there is no FDIC for bitcoin).