Robert Shiller's Data Say the Last Two Times Have Been Different

David Leonhardt presents a somewhat confused warning about stock valuations in his Upshot piece today. Looking at the recent run-up in stock prices the piece tells readers that it's "time to worry about stock bubbles." Actually, it's not. The stock market is high relative to its long-term trend, but there is little basis for fearing a plunge in prices as the piece suggests.

Leonhardt's basic story is that price to earnings ratios are substantially above their long-term average. He uses Robert...