The Breakfast Table

Rational Exuberance

OK, I promise, this is my last try–my final word on the subject of Clinton and lying. Turning to your example of the senior surgeon who lies only about sex, I take your point. But if you had occasion to watch that person lie repeatedly about it, in public, and with overweening sincerity … mightn’t you finally get to the point where you became reluctant to believe him on weightier matters concerning his medical behavior? You might not believe it’s fair, but wouldn’t some doubts begin to creep in? And wouldn’t that affect the work of the team? All I’m suggesting is that a president has a great responsibility to preserve his own power to persuade, because in his line of work it’s a tool just as essential as a surgeon’s or a pilot’s steadiness of hand.

It was indeed a little spooky to pick up today’s papers and read about the train crash, which seems tailor-made to illustrate what a whopper of a normative error looks like. Yes, of course, due process is owed the driver of the truck, but his five previous speeding tickets, together with the early evidence that the crossing gate was functioning fine, don’t bode well for the innocent-error-of-judgment scenario. There should be a name for the law of tragedy that seems to dictate that in cases like this, the driver of the truck walks away physically unscathed.

Enough moralism: How ‘bout that crazy Dow? I’m noticing that the 10,000-mark fever is entirely a function of television coverage; none of the three papers I get ran it on the front page (the Wall Street Journal put it on the front of its third, “Money & Investing” section; the Washington Post also covered it on the front of its financial section; and the New York Times positively buried it on page C11). It’s an event, or nonevent, perfectly tailored to the incremental coverage of TV, and I’m sure it’s doing wonders for CNBC’s ratings, but I’m impressed by the print press’s restraint.

I don’t know what to make of the market, though. Today’s editorial pages offer confirmation of any and every point of view: In the Times, my pal Joe Nocera gloomily admits to having given up all attempts to understand a market that long ago abandoned any connection to such verities as earnings and good business models; in the Journal, Jim Glassman and Kevin A. Hassett assert that “a perfectly reasonable level for the Dow would be 36,000.” (Do bulls get rabies?)

Before accepting Joe’s pessimism, I remind myself that he told me during last year’s slump that the market was bound to see 7,000 before it hit 9,000 again. But I do think he’s written presciently about how scary it is to watch us turning into a country with two economies. I’m straddling this reality right now, because I’m exploring the purchase of a house on the expensive side of town, where values have suddenly (yes, even in D.C.) shot through the roof; but I’d be trying to sell one on the less expensive side of town–the side, in other words, where potential buyers are not going to be people who suddenly feel that their wallets have gotten a steroid boost from Wall Street. All whining about the decline in my house’s value aside, there’s something frightening about how sharp the schism has become.

I haven’t caught up with the Ashley story yet, but I did enjoy the coverage of the Republicans’ alternative budget. It takes a kind of genius to try to ax some of the most popular items in the budget (the environment; NASA; farm aid) in order to pay for a tax cut that all recent polls suggest Americans are not especially clamoring for. This bedrock out-of-touchness on the Republican side is another reason why Gore’s low poll numbers seem especially ominous. (I’ll get you to talk about Gore yet …)

With rational exuberance,