And as I have pointed out, given our portfolio needs we can not attain the 100 bps premium that you can and we have no ready access to CD's paying the high yields that you often site.
Perhaps it would be useful to discuss what we mean by "access".
Clearly someone with most of their portfolio in a typical 401k/403b cannot hold CDs, and may not even be able to hold Treasuries. The only choice may be a crappy, high-cost, actively-managed bond fund. Someone in this situation simply isn't going to be able to use Treasuries or CDs, and may have to hold a lot of the types of bonds that Larry recommends against. This is a clear case of "no access".
Others have mentioned a brokerage option of some sort in their 401k/403b, which may give them access to Treasuries and even brokered CDs. Although my preference is direct CDs, Larry probably thinks more in terms of brokered CDs, since that's what his firm probably uses for its clients. As Larry has mentioned, the yield premium for brokered CDs can be quite rich at times. Sometimes it's even as rich as competitive direct CDs, and by extending maturity beyond five years and going to the secondary market, you can sometimes get even richer premiums with brokered CDs than with direct CDs.
Moving to someone who has significant assets in IRAs (traditional or Roth), which is the case for me and I think for you, and can be the case for anyone who is retired (so they can roll their 401k/403b to an IRA), access is not really the issue, but simplicity is a factor. I have no problem doing direct IRA transfers out of Vanguard or Fidelity to banks and credit unions that offer good IRA CD deals, but some people either aren't aware how easy this is or just don't want to mess around with it. So I guess we can define "access" differently, but I think it's more an issue of willingness to accept a little additional complexity for much higher risk-adjusted yields (as opposed to higher yields due to higher risk).
And of course anyone with an IRA at Vanguard, Fidelity, Schwab, or any other broker, also has the option of buying brokered CDs, which is mostly what Larry is talking about. Again, there is a complexity factor that may be an impediment for some, but it's not really an access issue.
Finally, in a taxable account, access as a non-issue, but again, simplicity vs. complexity can continue to be a dominant factor for some. Aside from that, it comes down to a comparison of taxable-equivalent, risk-adjusted yields, which anyone can calculate for themselves (remembering that if bond markets are efficient, one should probably be comparing to Treasuries in the 25% federal tax bracket, since munis probably are priced to be competitive here, then make additional adjustments for higher federal tax bracket, state taxes, and the state tax exemption for Treasuries).
It makes more sense for us to use Treasuries and 3 year average duration high quality corporates then to use all CD's instead, which is in keeping with Larry's recommendation of only short Corps and CD's if you have ready access. All CD's of course would negate any liquid or flight to quality advantages that the Treasury have over CD's.
Why keep raising the strawman argument of "all CDs"? I don't hold all CDs, nor do I recommend it, nor do I hear Larry recommending it.
I've already confessed my sin of holding a bit less than 20% of my fixed income in investment-grade and muni bond funds, so not all CDs. If I were more of a Larry-purist, I probably would hold Treasuries instead of investment-grade, and only AA or higher munis instead of my Vanguard CA tax-exempt bond funds.
This brings to mind a question for Larry: what does your firm recommend in taxable accounts for its high net-worth clients in California? I seem to recall you advising against CA munis at some point in the past, but the state tax exemption seems pretty significant. I would guess you would be OK with some CA munis as long as AA or above and only certain types, but probably should diversify with some in other states and even some in CDs. I do the latter, and therefore not the former, since my CA munis are a very small portion of my portfolio.