"Mahna Mahna", originally titled "Mah-Na Mah-Na," was written by Italian composer Piero Umiliani for an Italian documentary about life in Sweden, titled Svezia, Inferno e Paradiso (Sweden, Heaven and Hell). It is a nonsense song that achieved widespread fame when the Muppets performed it.
Which might explain why one of the YouTube videos of the performance has Swedish subtitles? Wheels within wheels. Here's a better version:
OMG, that still makes me laugh. The pink things are called Snowths! And you get the two old guys in the balcony at the end! I love The Muppet Show So. Much.
It turned into a running gag on the show, every time Kermit said "phenomena," which led to this:
So. Freaking. Good. Is The Muppet Show our generations' vaudeville? Discuss.