Slouching Toward a Hee Haw Economy?

Now that the Stock Market has lost 500 points three times in the last two weeks, the economy is beginning to race a number of big questions.

Probably the most immediate question is whether the U. S. is going to move from the economic pessimism of the last two years to a long-term state of gloom and despair. One of my favorite songs from the 70's was the old Hee-Haw anthem "Gloom, Despair, and Agony on Me:"

Gloom, despair, and agony on me
Deep, dark depression, excessive misery
If it weren't for bad luck I'd have no luck at all
Gloom, Despair, and Agony on Me.

There's reason to think the panic might be temporary. The main reason that the panic might abate is that American companies are tremendously profitable and sitting on mountains of cash.

Corporate America has bounced back impressively. The quarterly results season that is now nearly over has revealed that profits are back within a whisker of the all-time highs achieved before the downturn in late 2008. By some calculations, the rate of recovery of profits from their trough is the strongest since the end of the Great Depression.

But if the whole country decides on gloom, we're going to have a Hee Haw economy.