A few weeks ago I asked for readers to send me questions and said I would try and answer them while I was in Switzerland. Some of them were quite good and have given me ideas for whole newsletters but will require a lot of research. But a lot of them fell into two basic camps. This week we look at a number of questions from readers about my thoughts on the Muddle Through Economy.

One group basically asked, "John, given all the bad news [insert your favorite bearish statistic on housing, the credit crisis, inflation, doom and gloom, etc.] how can you be so optimistic and think we will only see a modest recession and a Muddle Through Recovery? Don't you think we will actually have a serious recession and/or a soft depression?"

The second group asks the obverse of the coin: "John, how can you see a long, slow recovery? Look at all the good things like [insert your favorite bullish statistic: low interest rates, a rising stock market, the worst of the credit crisis behind us, the stimulus checks just now getting to consumers, etc.]. Don't you think that means we will get back to a full growth economy by the end of the year?"