Great book loaded with interesting observations, aperçus, and deft criticism. Grant extolls the upside of failure, permitting the downcycle to occur, without which, he argues, the economy will stagnate. His thesis appears on page two of the Introduction:

Cycles are a natural part of the market order. Thus, there are cycles of expansion and contraction, investment and liquidation rising prices and falling prices, optimism and pessimism. The relative scarcity of contraction, liquidation, falling prices, and pessimism (specifically, investment pessimism) has been heralded as an unalloyed blessing. However, I think, it has also contributed to the sclerotic pace of growth. In fact, the attempted suppression of the corrective phase of the business cycle has hurt economies throughout the industrialized world. (my emphasis)

Other quotes:

* 250 Success, once achieved, presents no insurmountable problems to any social system. Where the free enterprise system shines is in its treatment of failure. Individuals, as individuals, are always error-prone, and they register their failures in bankruptcies, fresh starts, and the write-off of investments they wish they had never heard of.

* 280 [The Fed's] ability to forecast interest rates or real growth was in no way improved by the fact that their motives were disinterested and public-spirited. ... To believe in the efficacy of the Federal Reserve System's chosen operating system, it was necessary to believe that the manipulation of a single interest rate could guide the largest economy on earth. It was literally fantastic.

281-2 . . . if the Federal Reserve can facilitate a capital investment boom by suppressing the federal funds rate, why can it not keep on suppressing it? If the correct funds rate can prolong an upturn, why should there ever be a downturn?

282 Through which capitalist institutions can human error be rectified, if not through the money-losing ones?

284 The particular American business genius lies in beginnings and endings as much as in great, moneymaking middles.

291 The deterministic view of cycles clashes with the modern view. It is widely believed in 1996 that recessions are the products of policy error. To the Viennese mind, they are the products of investment error, and investment error is the product of credit inflation. Credit inflation, as we have seen, is the product of subsidized interest rates.