Traders on the floor of the New York Stock Exchange in New York City. The Dow Jones Industrial Average reached record highs in 2013 and was up 23% for the year. John Moore/Getty Images

Irrational exuberance is back on Wall Street, encouraged by cheap credit lavished on heavily leveraged speculators, lax accounting rules and the unfortunate tendency to confuse the true value of stocks.

The Dow Jones Industrial Average, long a bellwether of the stock market, started the year at 13,416. Last week it hit 16,478, which is 2.5 times its low point during the Great Recession in 2009.

Given rather modest job growth, government spending cuts that have weakened the economy and other lukewarm measures of domestic and global economic growth, this rise in the Dow is difficult to explain based on rational expectations.

But the Dow’s striking 23 percent rise this year is nothing compared with the steep prices of many specific stocks, at least when traditional measures of valuation are applied.

These sky-high valuations get little skeptical coverage in the financial press, which has acted more as lapdog than watchdog in the past decade. Instead of barking warnings, many Wall Street reporters wag their tales in ways that please the speculative crowd, which, at great profit, feeds them market-moving tidbits along with a pat on the head.

A key element in today’s irrational exuberance is the rise of novel ways of valuing companies that gloss over key facts.

In the 1990s the stock bubble expanded as companies persuaded journalists to shift focus from traditional measures such as net profits and net earnings per share. A new standard — earnings before extraordinary items — became a common measure, even though some companies reported extraordinary items with almost the regularity of quarter financial reports.

Accounting rules also let companies count services traded with customers as revenue, as the Global Crossing debacle showed. The telecommunications giant’s stock collapsed from a high of $61 per share to $5 in November 2001, leading to its bankruptcy in January 2002. Worse, companies like Enron, the Houston-based energy-trading firm synonymous with the corporate-fraud epidemic of the early aughts, hid liabilities off their balance sheets, distorting public information and thus investment decisions.

The current irrational exuberance shifts the focus away from PE, or price-to-earnings ratios, a traditional measure of stock value. I call the new measure for stock values PR to reflect both the ratio of price to revenues as well as the sheen publicists get paid to put on goods and services that produce no profit.

For well more than a century, the overall PE of the Standard & Poor 500 has averaged about 15. Last summer, that PE stood at a relatively high 17, as calculated by professor Robert J. Shiller of Yale University, who won the Nobel Prize in Economics for his research into asset valuation.

Shiller created a measure called PE10, which smooths out the figure by measuring current stock prices against inflation-adjusted average earnings for the previous 10 years.

Shiller’s PE10 in December reached 25.4, a figure that suggests share prices will come down unless profits soar. Corporate profits are already at record levels, so big growth in profits seems unlikely, given the weak recovery from the Great Recession, the end of jobless benefits for 1.3 million people and other economic factors.

But a PE10 of 25 appears absolutely reasonable compared with some prices the market has put on individual stocks.

Consider Facebook, which went public in May 2012. Its stock price has more than doubled this year. Its traditional PE stands at a whopping 113.