I think the biggest counter-argument to this is the problem of "mal-investment". In a lot of ways the business cycle operates as an explore-exploit optimizer.

I think the biggest counter-argument to this is the problem of "mal-investment". In a lot of ways the business cycle operates as an explore-exploit optimizer. During boom periods, credit conditions are loose. Which allows for a large degree of innovation with new and speculative business models. This is important because as conditions and technologies change, the frontier space of what's viable needs to be explored. Tomorrow's economic titans are today's wild-eyed entrepreneurs. However most of these crazy ideas turn out to be just that. That's where the importance of recessions come in. Credit crunches and market downturns impose economic and efficiency disciplines. Firms that were coasting by on good conditions without delivering real productivity gains are culled by the downturn. The entire phase of the cycle is important to maintain a healthy economic ecosystem. My fear is that if we banish recessions to the dustbin of history, we'll find ourselves increasingly burdened with bad investments as a larger and larger share of the capital base. Instead of getting written off during a downturn, jubilant markets will just keep throwing good money after bad managers, broken business models and overhyped vaporware.