To illustrate his point, Beinhart wrote a novel called American Hero, in which the campaign to oust Saddam Hussein from Kuwait was revealed to be no more than a Hollywood con-trick to raise President Bush's popularity ratings. It didn't really happen.
The novel, in turn, inspired last year's strangely prescient hit film Wag The Dog - in which a president hit by a sex scandal fabricates a television war in a desperate last-minute bid for re-election.
And now we have Wag The Dog syndrome oozing from every pore of the body politic. Did President Clinton bomb Sudan and Afghanistan to detract from the Lewinsky scandal? Did he bomb Iraq to distract the networks away from the impeachment proceedings taking place in the House of Representatives? Did any of it actually happen at all?
Beinhart's inspired idea has become so infectious that 1998 may yet go down as the year in which the American people began to suspect that politics was no more than an adjunct of the entertainment industry, their politicians mere fictional characters.
After all, it isn't too much of a stretch to re-imagine the Clinton-Starr- Lewinsky saga as a Hollywood production run wildly out of control. Here we have a story that spent four uncomfortable years in development - changing plot-line so often it was not clear for a long time what it was about - went wildly over budget and caused its producers to bicker so heatedly over the ending that it remains unresolved.
One noisy faction in the studio front-office wants to fire the lead actor, but his carefully worded contract is preventing them from getting their way. Having veered from sexual farce to morality play, it is now mutating into courtroom drama with the protagonists improvising their lines as they go. Meanwhile, trial audiences are beginning to hate the whole thing - suggesting that the production should be killed as quickly as possible and consigned straight to video.
This is not just a matter of life imitating art - or, as Woody Allen put it more accurately, life imitating bad television. The parallels between Hollywood and the place that the National Enquirer likes to call Hollywood East (also known as Washington DC) are causing genuine anxiety. While Congress was given over to the show-business spectacle of the President's sordid back-room love-life, it managed to pass fewer laws and work through less business than any other Congress in living memory. Hollywood meanwhile, had a bonanza year, raking in just shy of $7bn in box office receipts and confirming its status as an ever more potent driving force in American life and culture.
This troubling imbalance between politics and entertainment, between reality and fiction, was reflected in two of the year's more memorable films. Wag The Dog was not just a timely reworking of Larry Beinhart's delightful conceit, it also deconstructed - thanks to the screen-writing contribution of David Mamet - the essentially deceptive language that drives politics and manipulates the media and the public. The Truman Show, meanwhile, took up Andy Warhol's old adage that "a whole day of life is like a whole day of television" and imagined an unwitting hero starring in his own never-ending TV soap opera.
Are our lives being structured ever more like entertainment? Are we still in contact with the real world, or is everything now mediated through the small screen in our living rooms and the large screen at the multiplex?
Such questions are at the core of a book just published in the United States, Life the Movie: How Entertainment Conquered Reality.
In it Neal Gabler, a film historian, argues that we are living in an era of "postreality", in which public life has been subsumed into the all-encompassing arena of entertainment and media constructs have become the yardstick by which we measure our lives. The media no longer reports what people do; they report what people do to get media attention, and thus the whole of modern society has turned into a series of endless mirrors in which truth and fiction are hopelessly enmeshed.
Of course, this is not an entirely new phenomenon. In politics, for example, it is at least as old as the television era - initiated under the would- be King Kennedy of Camelot, polished by Nixon the manipulator and perfected by Reagan the movie actor, who saw the presidency as the role of a lifetime.
If 1998 accelerated the postreality effect, it was not only because of Clinton and Lewinsky but also because of 24-hour rolling news, the internet, and the seductions of a story that could be digested as easily as a piece of Hollywood popcorn. And 1999? Here's wishing you a "postreal" New Year.