Boom & bust cycles seem to be a built in “feature” of market economies. The architects are not trying to create booms and busts per se, but they are trying to manage them so they aren’t as devastating as 1929.
Should the fed have stepped in to prevent a flash freeze in liquidity in March 2020? Probably. Did they go way way way too far? Maybe. Did they go way way too far in Aug 2020 and Nov 2020 and Dec 2020 and Jan 2021, etc? Definitely.
But a comprehensive theory exists. It won Friedrich Hayek the Nobel Prize in 1974. You should at least be familiar with it.
That's another reason markets get a little bit of steering.