The phrase "a lunacy of" is correct and usable in written English.
It can be used to describe a situation or collection of actions that are wildly irrational or nonsensical.
Example: "The decision to invest in such a failing company was a lunacy of epic proportions."
Alternatives: "a madness of" or "a folly of".
Somehow, when they weighed up their options, the lunacy of a preacher with a handgun and a racist army of fat blokes in khaki seemed like a credible path forward.
The third-largest church in Christendom, after St. Peter's in Rome and St. Paul's in London, it exceeds them in total volume, a fact the Guinness Book of Records has certified with all the logical lunacy of a Jesuit calculating how many angels can dance on a pinhead.
The Firm was back on a solid footing; the lunacy of Diana week now recalled as a mere blip in the company fortunes.
Pirates too scared to fight and policemen all a-dither with their truncheons are, after all, only a blueprint for the lunacy of Monty Python.
A year-and-a-half ago, colleagues and the governing class wrote off Donald Trump's candidacy as the lunacy of a megalomaniac celebrity.
Whatever the lunacy of a market that in many parts of the city puts a buyer of a $900,000 home firmly in the middle class, there is a greater insidiousness to the real-estate realities in some of the most depressed quarters of New York.
The result is "Python lunacy of a purer grade," Vincent Canby wrote in The New York Times.
But it offered me a way into the lunacy of that political regime.
He said the sheer number of conversations necessary is a reminder of the lunacy of our fractured rail system.
This is lunacy of a high order: Pakistan's utilities are already losing enough money to sink the foundering economy.
