Because of human nature.
The economy is simply human activity.
And human activity often involves mania and irrational exuberance.
This is how bubbles happen.
A stable economy is an economy which is not free.
The problem with an economy that is not free is that it does not function as well as an economy that is free.
Therefore what we have is the worst system except for all the rest.
What we can do and what we do have power over is how intense the boom and bust cycle is. Are politicians doing enough to ensure that intensity is reduced, or too much to ensure that it is increased?
Well, that could be the case for normal economic activities. In the case of scientific research, which is what I'm interested, is affected by the economy but it produces results that are not economic in nature. Most big projects couldn't be organized without massive governmental funding. Darpa, Apollo missions, without patronage this probably wouldn't exist. It could change in the future but so far it doesn't seem feasible.