The Big Picture
Some people argue that P/E expansion wasn't all that significant; they say it was (if anything) a function of falling interest rates. In my mind, that only partially explains why multiples expand; It certainly cannot rationalize why P/Es went from 7 to nearly 50 over the course of ~20 years.
Why might the median P/E have run from 7 to 32 during the Bull market?
My explanation is Psychology: something shifted in investor sentiment that made them willing to pay more than $7 for a $1 of earnings -- much more. That change is best explained by a sentiment shift related to perceived relative Value.
Good blog on the markets, plus some good links.
Like the Bonnie Situation
Here's the problem: Your coffee sucks. That's right, I said it: You do not know how to brew a good cup of Joe.