Other than in wistful missives about missed public policy opportunities, economists have had little reason to speak of the virtuous circle since 2007. Yet we suspect that it will creep back into the lexicon of the financial media shortly. But if we’ve heard little of the virtuous circle, we’ve heard plenty from its evil twin, the vicious circle. Its offspring (housing collapse, rising unemployment, falling stock prices, crisis of confidence and credit crisis) were all key components of the last recession and helped contribute to the near collapse of our financial system. Yet they have all steadied and apparently found a bottom. The best leading indicator of the group, stock prices, has been climbing for four years. Credit for both households and business has started to flow more freely, even discounting for the Fed’s pump priming. While it sounds positive, the lingering concern nagging at many investors seems to be “is this all there is?” Are we stuck in the so-called “new normal” of slow growth that is well below the economy’s potential…or worse, facing a consumer spending slowdown that some fear could pull the economy back into recession?