Everything that could go wrong did go wrong, yet the U.S. economy sailed right on through. If you consider the litany of negatives buffeting the economy since the bursting of the stock market bubble in 2000 and the 2001 recession, it’s something of a miracle that it managed to grow 2.3% in 2002, 4.4% in 2003 and 3.9% in 2004 (all on a fourth-quarter over fourth-quarter basis). The economy expanded in 2001 as well, albeit at a miniscule 0.2% rate. And the March-to-November 2001 recession, the shallowest on record, no longer includes two back-to-back quarters of declining gross domestic product, which is the conventional definition of recession. (The National Bureau of Economic Research’s Business Cycle Dating Committee, the official arbiter of expansions and contractions, doesn’t use the level of GDP to designate the cycle’s peaks and troughs.) Herewith is a short list of hurdles the economy confronted, in no particular order of importance or chronology and freely adapted from various prognostications over the years:

* a 40% drop in the broad U.S. stock market;
* a 78% plunge in the technology-heavy Nasdaq Composite Index;
* the biggest decline in capital spending since 1974-75;
* a terrorist attack;
* corporate accounting scandals;
* two wars;
* too much debt;
* too little saving;
* more than enough uncertainty;
* a contested presidential election (2000);
* a divisive presidential election (2004), the outcome of which held drastically different implications for business;
* a record budget deficit;
* a record current-account deficit;
* no jobs;
* no good jobs;
* good jobs going overseas;
* good companies going overseas;
* $50 oil, which is a tax on the consumer;
* an overleveraged consumer;
* a tapped-out consumer;
* no pent-up demand;
* no help from the world’s no. 2 economy, Japan;
* an end of the stimulus from tax cuts;
* an end of the stimulus from mortgage refinancings;
* a housing bubble;
* a bubble in high-yield and emerging bond markets;
* a Federal Reserve pushing on a string;
* a liquidity trap (see string theory above).

While many of these notions were misplaced to begin with – tax cuts designed to increase incentives don’t fade, and a demand-driven rise in oil prices isn’t anything like a tax, which reduces output – it’s still an impressive list of obstacles. What are we to make of the solid and increasingly broad-based growth in the face of all this adversity? The first lesson is that an economy’s natural tendency is to grow. Really it is. Unless you throw some nasty stuff at it – higher taxes, excessive regulation, unnecessarily high real rates, a curtailment of individual freedoms – people want to produce. They produce to profit, to have the means to buy whatever it is they want.

Supply creates its own demand (Jean-Baptiste Say). The Fed creates demand as well by increasing the money supply, which is a forgotten tool now expressed in terms of the level of interest rates (they aren’t always proxies for one another).

No two business cycles are exactly the same. Sometimes it takes longer for growth to ignite, but eventually the process works.

“Here we are, back on course,” says James Glassman, senior U.S. economist at JPMorgan Chase & Co. “We owe much of it to the reform – increased trade, deregulation, lighter taxes – of the last two decades.”

A second lesson to be learned is to avoid spending too much time hanging out on the Prudent Bear Web site.

Bearishness is a way of life for some folks, an end in itself. Many economists and analysts, not to mention an odd mix of physicians and college professors who write to me (when they’re not buying up gold), maintain an Armageddon forecast, month after month, year after year. All that changes is the reason for the looming disaster, once the previous excuse fails to pan out.

A third lesson: Don’t get mesmerized by one statistic, says James Bianco, president of Bianco Research in Chicago.

“When I talk to overseas clients, they’re totally focused on the over indebted consumer,” Mr. Bianco says. “What I say to them is: The Nasdaq lost 80 percent of its value, $5 trillion of stock market wealth disappeared, and two planes slammed into the World Trade Center. And the credit card bill is supposed to do us in?”

Underestimating the adaptability and flexibility of the American economy hasn’t been a good bet over the last two decades. Recessions have become rare, inconvenient intermezzos, painful for those who lose their job or their business but of little lasting effect on the overall economy.

True, today’s cures can become tomorrow’s disease, which is why the Fed has embarked on a mission to normalize short-term rates before easy money leads to a misallocation of capital into housing, in the same way it chased higher prices of tech stocks and dot-com companies in the late 1990s.

To be sure, imbalances can arise, and they may even act as tipping points. However, there’s a strong internal corrective mechanism in free-market economies. Prices serve as signals, telling businesses to produce more and consumers to buy less.

The real problems arise when government, always under the guise of making things better, interferes and exacerbates the problem. In so doing, the economy doesn’t get a chance to correct – and learn – from its own mistakes.

Ms. Baum is a columnist for Bloomberg News.