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More on First Amendment

David R. Kotok
Sun Jul 9, 2017

We received many replies after we published my commentary “America’s Birthday” ( A sampling of readers’ responses follows, and then we will turn to the implications of the First Amendment for markets.

The majority agreed with us and offered “well done” or “thank you for speaking up” and other complimentary words. We thank each of you for those notes.

Some added personal views. Here’s one from Paul: “The only thing I would add is that the NRA’s and its backers’ successful battle to put a firearm in every pocket further abridges my right to free speech since, increasingly, I dare not voice my views for fear of being blown away. Let’s hope that the proven resiliency of American democracy will, eventually, overcome these attacks on our liberty.”

Others took the opposing side and noted that the Second Amendment is as valid in law as the First. They encouraged me to make that point. I thought about this juxtaposition: Don’t we want a free press to report that the highest murder rate in America’s cities is in one where guns are not legal? Don’t we also want news about a young man seized by road rage shooting and killing another driver?”

About one-fourth of our readers took issue with my position. Here is a sample from Barry: ”Pretty much disagree; Trump is the target of phony news put out by the MSM under the cloak of First Amendment protection....”

Bruce, on the other hand, took neither party’s side. Fed up with the media’s role in elections, he asked,

“While I can agree with your complaints about the president, why have we let the so-called free press become so irresponsible as to make us vote for two of the worst candidates in my lifetime? I didn’t vote for either but consider the press the enemy in respect to responsible reporting on our political process. They are the fountainhead of communication to the masses, and what we have now is an irresponsible social media mating up with a no longer functional free press. That is the serious part of the Fourth of July, not just our incompetent president along with both of the two dysfunctional primary political parties.”

One thoughtful reader argued strongly in favor of the present administration’s right to craft communication and the press’s right to report, question, and respond. Here is an excerpt:

“Every administration has had its means of communicating with the public, from speeches to newspaper to fireside chats on radio to television and now social media. It is the right of the administration to craft the message and means of delivery. I believe the administration has every right not to answer a ridiculous question or any question at all. The press has every right to challenge the message and publicize their editorial comment. I see no reason why any administration should be prevented from communicating their message as they see fit and should endeavor to prevent it from being twisted to fit an opposing political agenda."

He concluded that “It appears to me the current administration is communicating an enormous amount of information, and the free press is rightly being critical. If the messages are being communicated as intended on both sides, the public can make an informed judgment. I see no reason to believe freedom of the press is being curtailed.”

Another David, on the other hand, believes that freedom of the press has been abridged and misused for a long time:

“Regarding your commentary about free speech, I agree that it is critical that we have a free press – if only we had a press that was free of extreme bias, hypocrisy and overt manipulation. We may have a press free of government control, but it is certainly controlled by those that shape the news to fit with their perspective and their attempt to influence others to think the same way as they do. In this regard I fear that we’ve not had a free press for many decades. As the detectives on Dragnet used to say, ‘Just the facts, ma’am, just the facts.’ If only we had more of this from the “free press” than what we get today.”
Criticism of the press as a professional failure was a common theme. Here is a sample from Steven: “The press has NEVER been this outright partisan. That changes the overall game when one of the participants changes the rules.”

Many argued that the press is biased and thus invites the attack. Here is Bill’s reply: “Well said! But it is sad when the press abandons its role to inform us and instead pursues its own agendas, thus denying the public what the first amendment tries to guarantee us. But this too will pass. Happy 4th!”

Another point raised about the press came from a longtime friend and foreign journalist. He said: “You’re right; you’re damned right. However, there’s always a partisan press that works for some aim. That may be the aim of the owner, of the creditors of the press, of the advertising men, etc. This may be good or bad, but it can be very powerful. For instance, the French Revolution had a strong driver in the press paid by the bourgeoisie. In fact Louis XVI’s advisers blamed that the king did not ‘buy’ some of the influent journalists. This is a positive example, but there are also negative examples. As a foreigner who just superficially follows American politics, I see a lot of deep bias against Trump. And Trump is moving in a way that is just colorful, and perhaps makes publicity in the press. I do not see any real danger to the press in that.”

The theme was repeated and repeated with emphasis on the difference between investigative journalism versus opinion and hyperbole. I tried to make this point in the original July 4 comments when I argued about fact versus assertion and opinion. Press freedom permits both as long as there is no intentional and fraudulent defamation. At least that was the plan in designing the First Amendment.

Fewer than ten responders were nasty and called me names. Of them, three alleged that I’m not patriotic, and they invoked their personal military service as evidence of their platform perspective. Many readers have served our country, and I know some of them personally. My army time was in the 1960s. What I find interesting is that the many veterans I know who agreed with me about defending the First Amendment did not feel it necessary to invoke their service as a platform for their views. Only the detractors did that.

There were a few four-letter words that made it through the filters. I always marvel at how a few folks feel a need to resort harsh vulgarity to express themselves when ideas are best countered and advanced by means of mutually respectful, reasoned dialogue.

A couple of critics advised me stick to economics and financial matters. They argued that I have a political bias against Trump or that I’m a closet Democrat. I disagree about the charge of political bias. It is simply not true. When Harry Reid led the Democratic majority in the US Senate, he was a target of my pen as surely as is Mitch McConnell. The systemic problem starts with gerrymandering and two political parties that each operate so as to exclude half the electorate. But how to fix that is a subject for the future.

One or two opined that the July 4 comment had nothing to do with financial markets. The rest of this commentary will discuss why the First Amendment is absolutely essential to our economic well being.

It is a free press that snagged a photo of NJ governor Christie at the beach house at the same time the NJ budget impasse had shut the state’s parks over the holiday weekend. Kim noted that twelve states failed to pass a budget on time. Without the press, how would we know?

History shows that the persistence of the Washington Post kept the Watergate story alive and ultimately caught Richard Nixon in an outright lie. Just to be sure to demonstrate non-partisanship, I invite you to recall that the press made the Whitewater revelations nationally prominent in the Clinton era.

And let’s not forget that the penalties for releasing information that is known to be false can be severe. Why isn’t that standard the same in our nation’s governance?  Isn't it the media that reported no one went to jail during the financial crisis.

Press reporting of facts without bias is difficult but possible. New York Times journalist Gretchen Morgenson has demonstrated repeatedly how important it is to cite accurately. Her Sunday column is popular not only because of her adept prose but because she aims for scrupulous accuracy. She is one of many fine members of the “fourth estate” who strive for accuracy. Ben White at Politico is another. So are many at Reuters and Bloomberg and the Wall Street Journal and the Financial Times and the Economist.

If we really think about it, there is really no general, monolithic “press.” There is a collection of individuals who demonstrate their qualities as they do their jobs, and there are those entities or persons who sponsor them or hire and fire them.

Imagine a circumstance where financial reporters could not reveal a fraud or a settlement. Don’t you want to know about the scandalous behavior of a major bank that is hawking credit cards to millions of people who are already financially overstretched? Aren’t you interested when a drug company has a successful product, and don’t you want to be warned about a failure?

Not a single thing in the financial markets and economic environment is lost by the press. When LIBOR was fixed, we knew about it. When the gold price spiked down in an instant, we knew about it, though we still do not know why that happened, and Venezuela selling is a theory, not a fact.

In the sphere of economics, finance and geopolitics, we depend on the press. We encourage it. We need it. The information a free press delivers to our doorsteps and our screens enables us to demand accountability, dodge an investment disaster masquerading as an opportunity, or sort out trends and information that should inform our investing strategy. Without a free and robustly inquisitive press, we fly blindfolded.

Our July 4 comments closed with “Without freedom of the press and a government accountable to the people, we are doomed.” We stand by that view and expand it to include all those freedoms that protect us in the Bill of Rights. I’d like to close this note with a truth we must never forget, articulated a generation ago by Ronald Reagan:

“Freedom is never more than one generation away from extinction. We didn’t pass it on to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children’s children what it was once like in the United States where men were free.”

– Ronald Reagan, March 30, 1960 (hat tip to another David)

We thank all who took time to think about our freedom as they celebrated July 4 and for the emails and tweets, both pro and con. We hope your holiday was a good one.