also loonie, looney, luny, "crazy; silly and eccentric," 1853, American English, short for lunatic, but also influenced by loon (n.2) and perhaps loon (n.1), the bird being noted for its wild cry and method of escaping from danger. As a noun by 1884, from the adjective.
Slang loony bin "insane asylum" is by 1909. Looney left in reference to holders of political views felt to be left-wing in the extreme is from 1977. Looney Tunes, Warner Bros. studios' animated cartoon series, dates from 1930.
Old English cribbe "manger of a cattle stable, fodder bin in cowsheds and fields," from a West Germanic word (source also of Old Saxon kribbia "manger;" Old Frisian and Middle Dutch kribbe; Old High German krippa, German Krippe "crib, manger") probably related to German Krebe "basket."
Meaning "enclosed child's bed with barred sides" is 1640s; probably from frequent use in reference to the manger where infant Jesus was laid. Thieves' slang for "house, public house, shop" dates to at least 1812, but late 20c. slang use for "dwelling house" probably is independent. The Old High German version of the word passed to French and became creche.