Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“Why do you get to dictate what people say about stock investing on the internet?”
The question is why do you think you should have this right? Why do you think you should be able to post what you want, where you want and when you want? Just as you decide what you will allow on your website, others have the same right to allow what they want. Every website owner controls their own content.
You are stating the general rule. But there are limits to the general rule. When you cross the line into committing financial fraud, you have gone too far.
Bernie Madoff went to prison because he created phony transaction statements that led the owners of shares in his fund to believing that the fund had purchased certain companies at certain prices and then sold those companies at better prices. Madoff could not say: “Oh, there’s no law against writing the names of companies and then dollar signs and numbers on pieces of paper and then mailing those pieces of paper to thousands of people.” No, there’s no law against doing that. But there is a law against financial fraud and Madoff’s clear purpose was to trick the owners of his fund into thinking that the transactions described on these pieces of paper had really taken place. Madoff is in prison today. Properly so.
So it is with John Greaney and with those who have posted in “defense” of him. Website owners control their own content. But to cover up an error that one has made in a retirement study is an act of financial fraud. If a site owner bans people from his site solely because those people have posted honestly on safe withdrawal rate, that is fraud. That gets you put into prison.
It is ultimately juries who have to decide which people who committed the crime in an objective sense go to prison and which do not. Wade Pfau presents a sympathetic case because he put his career on the line trying to get the authors of the Trinity study to correct their study. Wade ULTIMATELY committed financial fraud. But he obviously did so with his feet dragging. Wade obviously WANTED to do honest work. So, if I were sitting on his jury, I would let him off. I think that the men and women who are appointed to sit on his jury will also let him off. But I cannot decide the matter for them. The jury members get to make that decision. I trust our system to produce good results. So I just have to leave it to the jury to do good work.
Under no circumstances do I want to commit financial fraud myself. First of all, I do not want to leave it to a jury to decide whether I go to prison or not. I believe that a jury would be sympathetic to my case if I agreed to say that Greaney’s study contains a valuation adjustment. But why should I have my life riding on what a jury decides? It seems better to me for me just to not commit the crime in the first place. That’s why I told Wade that I thought that he was “insane” to flip to the Goon/Criminal side of this matter.
Second, I don’t want there to be more Wade Pfau’s in the future. Or more Mel Linduaer’s. Or more John Greaney’s. Or more Jack Bogle’s. I want us all to feel free to post honestly re these critically important matters at every discussion board and blog on the internet. Why even train people to become academic researchers in this field if we are not going to permit them to post honestly? We need the Wade Pfau’s of this world doing honest work. Every last one of us needs that. It’s a win/win/win/win/win.
If I commit financial fraud myself, I am making the situation worse rather than better. Each time another person with a desire to do honest work flips to the Goon side out of a fear of the intimidation tactics being used against them, it scares others who are on the edge and trying to work up the courage to post honestly. It takes us down, down, down. It’s because people were afraid to speak back to Bogle back in 1981 that Greaney ended up in the place where he is today. Greaney is a friend of mine. So I very much wish that someone had had the courage to stand up to Bogle back in 1981, So I sure don’t want to make the same mistake by failing to stand up to Greaney in 2017. Selling out my fellow community members would just create more Greaney’s down the line. I want there to be fewer prison sentences and shorter prison sentences, not more, longer prison sentences.
Does all of that not sound at least roughly right to your ears, Anonymous? Do you not think it is better to have shorter prison sentences and fewer of them? In my mind, this is not even a close call. In my mind, there should be no controversy over this one. I only wish that Bogle had come clean back in 1981, and that, if he failed to do so because he was suffering from cognitive dissonance (which is a real phenomenon), that his friends had all encouraged him to come at least partially clean by saying that there was at least a chance that he had made a mistake and that he thus encouraged everyone to post honestly re these matters.