The chart above, presented at a conference in Paris by economists Luc Mampaey and Claude Serfati, shows what has happened since then. With the Afghan war the arms index surged, gaining over 25 percent by April 2002. Then it slumped, along with the rest of the market. If you had invested $1,000 in a defense portfolio at the peak of the Taliban boomlet, by March 2003 you would have lost a third of your stake.

But then came Iraq. And it's been clover for contractors ever since. Total gains since March 2003 are above 80 percent. Even if you'd put your money in at the beginning, in September 2001, you'd be up over 50 percent. That isn't bad, considering.

This is no scandal, of course. War is naturally good for the arms business. The companies involved are public -- anyone can buy their stocks. Suppose that back in 2001 you'd had unlimited access to bank credit. And suppose you'd also had the certain knowledge that George W. Bush would take out Saddam Hussein, come what may. Well then you, too, could have made billions over the past three years.

And if you were the Carlyle Group, to which ex-President George H.W. Bush then served as a senior advisor? In that case, you did very well indeed. The Carlyle Group today describes itself as "the leading private equity investor in the aerospace and defense industries." There is no reason to doubt that claim.

The really big scandal lies elsewhere. It isn't in the fact that a small group of political insiders made big money from the Iraq war. The big scandal is in all those other numbers: the Dow Jones industrial average. The Standard and Poor's 500. The NASDAQ composite index. Look at them -- they haven't budged in three years.

Some people get concerned when the stock market goes up. They fret over bubbles, which must pop, and over the inequality of wealth that naturally rises with a rising market, given that only a few Americans own most of the corporate stock. These are real problems. But count me in the group that tends to see the bright side. A rising stock market means that businesses see the possibility of future profit, which spurs them to invest. And that, above all, is what creates the new jobs so lacking in the past four years.

If you want a one-picture analysis of the American economic problem, this chart is as good as any you will find. It exposes with brutal clarity the Bush economy as it really is -- run for the profit of the president's friends. The chart exposes with equal clarity the largest economic cost of the Iraq war: the blockade it has laid across and against the full recovery of everyone else.

Much has been made of the fact that Bush's tax cuts went overwhelmingly to the top 1 percent of the income distribution. But if those tax cuts had succeeded in setting off a strong and widespread economic expansion -- as Ronald Reagan's did, 20 years ago -- who would object? Not me, frankly. The problem is that they failed to do this.

Part of the reason lies in the poor design of the tax cuts. And part of the reason, surely, lies in the fact that the Iraq war is a huge question mark overshadowing the future of the American economy, and hence a deterrent to business investment.

Business isn't stupid. It knows that Iraq took us away from the "war on terror." It knows we're less safe now than if we'd pursued al-Qaida to the bitter end. It knows that energy markets are unsettled and that we may be heading toward a long period of expensive oil. It knows, perhaps above all, that the war in Iraq is far from over. And it knows that certain Washington insiders are even now busily preparing for a post-election Bush administration showdown with Iran. None of this has inspired confidence.

Back in 1919, in the wake of the Great War, John Maynard Keynes wrote of the effects of war on business: "The war has disclosed the possibility of consumption to all and the vanity of abstinence to many." Something like this happened after September 2001. Households borrowed and kept up their spending even as incomes shrank. But businesses, forward-looking and unsettled by the prospects ahead, curtailed investment. As Keynes also wrote, "no longer confident of the future, [capitalists] seek to enjoy more fully their liberties of consumption so long as they last." But they don't invest, and they don't create jobs.

The big scandal isn't who made money. It's who didn't. It isn't the handful who got good jobs working for defense firms. (It isn't the brave truck drivers risking their lives on the roads of Iraq.) It's the millions who got nothing at all. It's the fact that Bush did nothing about that. The message, once again: Bush doesn't care.

The lines between the two great issues of this campaign -- the jobless economy and the Iraq war -- are blurred. The economy is part of the price we're paying for the war. And on both, the Bush message is the same: Things are fine. The economy is strong and getting stronger. Baghdad is safe and getting safer. And the infidel is being thrown into the sea.

Oh, excuse me. The last one isn't Bush. It's from Baghdad Bob -- Comical Ali -- Saddam Hussein's minister of information, as Bill Maher brilliantly reminded us the other day.

The latest dirty blows are a contemptible one-two combination with which Team Bush has portrayed John Kerry as both the enemy of God and if not exactly the ally of al-Qaida, then, at least, the terrorists' candidate of choice. To hear them tell it, a vote for Kerry is a vote against God and country. Talk about hitting way, way below the belt.

Let's start with God.

It was revealed last week that the Republican Party has sent out an incendiary mass mailing warning that, if elected, "liberals" (and I'll give you one guess which presidential candidate that includes) will try to -- I kid you not -- ban the Bible.

The full color flier features a picture of the Bible with the word "Banned" stamped across it, and a photo of a man, on bended knee, placing a wedding band on the hand of another man, accompanied by the word "Allowed."

Clearly, Bush and the GOP have taken their Bible-thumping ways to a whole new level: Now they're using the Good Book to try to bash in the skulls of their opponents.

This "God is on our side" attack is all the more outrageous because it's not coming from some shadowy 527 committee that Bush can publicly -- albeit disingenuously -- distance himself from but, rather, from deep in the heart of the Bush-run Republican National Committee. The president's team has undoubtedly "approved this message."

They've also used the official Georgewbush.com campaign Web site to attack Kerry, a Catholic, as being "Wrong for Catholics," while an RNC Web site, KerryWrongForCatholics.com, slams him for not being loyal enough to the pope. We've certainly come a long way since another JFK had to assure voters in 1960 that he wouldn't take orders from the Vatican.

The idea that Kerry and the Democrats are anti-Bible and that Bush has a hot line to the Man Upstairs is both offensive and patently absurd. One look at the latest statistics showing the rise in the number of Americans living in poverty proves that Republicans -- who, contrary to their claims, do not hold a copyright on the Bible -- have grotesquely perverted its core teachings.

As Rev. Jim Wallis, the editor of Sojourners magazine, told me: "It's a bitter irony: These people accuse Democrats of wanting to ban the Bible then proceed to utterly ignore the vast majority of its contents when it comes to questions of social justice, war and peace, and protecting the environment."

Perhaps the holy rollers in the Bush camp should crack open a Bible and see what it has to say about caring for the poor (Matthew 25:40), caring for the earth (Genesis 2:15), and caring for human rights (Genesis 1:27). I've got a hunch Jesus wouldn't be too thrilled with Bush's first term.

And while they're acquainting themselves with the book they purport to defend, the Bushies might also want to have a look at John 8:32 to see what it has to say about the moral imperative of telling the truth. Instead, they are doing everything in their power to convince nervous voters that a vote for John Kerry is a vote for another 9/11. It's the latest vile twist in the Bush-Cheney "all fear, all the time" campaign strategy, and the last desperate gasp of an administration utterly clueless about how to actually win the war on terror.

The fear mongering has been relentless and revolting -- bottoming out with a sewer-level attack ad put together by a 527 largely financed by a pair of longtime Bush backers. The TV spot shows pictures of Osama bin Laden, 9/11 hijacker Mohammed Atta, the Chechen school murderers, and the Madrid train bombings and asks: "These people want to kill us. Would you trust Kerry up against these fanatic killers?"

Somewhere -- and I don't think it's heaven -- Lee Atwater is smiling.

And lest you think this line of attack doesn't have the Karl Rove seal of approval, just look at the long line of Bush surrogates lining up to parrot the "Al-Qaida wants Kerry to win" talking point -- including Sen. Orrin Hatch, the increasingly embarrassing House Speaker Dennis Hastert, Deputy Secretary of State Richard Armitage, and the hatchet-man-in-chief Dick Cheney. They've all been echoing Hatch's claim that terrorists "are going to throw everything they can between now and the election to try and elect Kerry."

What's next, a photo of Abu Musab al-Zarqawi sporting a Kerry-Edwards campaign button?

This terrorists-for-Kerry routine is as laughable as it is loathsome. Why in the world would the terrorists want to get rid of George Bush? He is their dream president, after all: a man who has alienated our allies, isolated us and united the Muslim world against us.

The president's preemptive invasion of Iraq has been such a boon to al-Qaida that the British ambassador to Italy called him the terrorist organization's "best recruiting sergeant." Even Bush's good buddy Pakistani President Musharraf (a guy who can't afford to share W.'s delusions when it comes to matters of security) said last week that the war in Iraq has made the world "more dangerous" and "further complicated" the war on terror.

Of course, the spinmeisters in the Bush camp would rather you never hear any of this, which is why they've been so quick to smear as unpatriotic anyone painting a less than rosy picture of Iraq -- going so far as to imply that Kerry, by merely questioning the president's policies, has given aid and comfort to our enemies.

What a load of gutless garbage. As Thomas Jefferson made clear, "Dissent is the highest form of patriotism." But Bush can't seem to grasp that this country is too strong to be endangered by the truth -- and that, indeed, hiding the truth, the hallmark of his administration, is what is making us weaker and less secure.

I know the president hates to read but, with the debates looming, maybe he should dust off his library card and brush up on his American history. And on the Bible.

The former Sen. Joe McCarthy, R-Wis., gave his name to an "ism" by accusing people in the federal government of being communists -- without any evidence. CBS correspondent Edward R. Murrow helped expose his methods in an hour-long documentary. McCarthy's inquisition collapsed when he attacked the U.S. Army and President Eisenhower.

Half a century ago, most of the press was slow to unravel McCarthy's vicious and reckless charges of treason, as reporters instead simply amplified them. "The press served as transmission belt for McCarthy's charges, making it more difficult for the truth to catch up," says Edwin Yoder, former editorial page editor of the Washington Star, once the major daily newspaper in the capital.

Former New York Times columnist Anthony Lewis, who won a Pulitzer Prize for his reports on McCarthyism in the 1950s, says, "The press had a difficult time covering McCarthy because it had ethical guidelines that reduced it to being stenographers: We report what people say, regardless of the fact that the 17 previous statement may have been lies."

In covering the current explosive Republican accusations without holding the accuser responsible, the press is in danger of repeating the same mistake, some observers say. "The press can't simply report flat-footed a smearing accusation against somebody's loyalty; it's the most insidious charge you can make, particularly in Washington," says Murrey Marder, who covered McCarthy for the Washington Post. "I think the press certainly can recognize quicker than anyone else when a loaded accusation, questioning somebody's loyalty, is coming out. The press should ask the accuser, 'What do you mean? What justification do you have?' That's real work, and it's called journalism."

The accusations that the Kerry campaign is aiding terrorists and that terrorists would prefer that he be elected president hark back to the ugliest period of the early Cold War. "It's reminiscent of red-baiting," Yoder says. He notes one significant difference, however: "McCarthy specialized in wild accusations and character assassinations, but he didn't get involved with electoral politics. [What's happening] today is something of a novelty."

Historian Alan Brinkley, the provost of Columbia University, agrees that even during the height of the Cold War, scathing rhetoric that called into question the loyalty or patriotism of a presidential candidate was deemed too extreme. "This kind of rhetoric never would have come into a presidential campaign during the '50s or '60s. It would come from people widely dismissed as extremists -- people on the margin of the party who were tolerated or perhaps quietly encouraged -- but never from anyone identified as the party. Now it has migrated to the very center of the campaign."

In a Sept. 24 article, the Washington Post's Dana Milbank catalogued the spate of loaded Republican statements suggesting alliances -- direct or indirect -- between Democrats and terrorists, revealing that many are coming from senior party and administration officials: