Since my moral and ethical compass (Tom) has chimed in, I'll stick with the dissent. However, the dissent does not say that we "have to have" (or even "should have") criminal laws against every falsehood.

It strikes me as largely a truism that we should not have criminal laws against most of the "strawmen examples" cited by the majority:

...lying about one’s height, weight, age, or financial status on Match.com or Facebook, or falsely representing to one’s mother that one does not smoke, drink alcoholic beverages, is a virgin, or has not exceeded the speed limit while driving on the freeway.
However, what I (as something of a small "l" libertarian) think we "should have" is not necessarily what a majority in this country believe we "should have" (and what the governments elected by them enact).

I envision the spectrum of "speech regulation" as involving one end zone where a consensus exists that the regulation is totally wise (clearly constitutional), and another end zone where a consensus exists that the regulation is totally unwise (clearly unconstitutional).

In between those consensus end zones, is a very large playing field where the issue is what regulation can be applied even though it is "unwise" (though not, by consensus, "totally unwise"). Remember that there should be a presumption in favor of legislation, unless you wish to have some sort of unlimited judicial review (a concept rejected by the Founders).

What is the First Amendment really about ? For that, look to the majority and its citation of the Alien and Sedition Act:

Hence the historical rejection of the validity of the Alien and Sedition Act, which “made it a crime, punishable by a $5,000 fine and five years in prison, ‘if any person shall write, print, utter or publish . . . any false, scandalous and malicious writing or writings against the government of the United States, or either house of the Congress . . . , or the President . . . with intent to defame . . . or to bring them, or either of them, into contempt or disrepute; or to excite against them, or either or any of them, the hatred of the good people of the United States.’ ” Id. at 273-34 (quoting Sedition Act of 1798, 1 Stat. 596).
The "Alien" portion of the Act held up fairly well; but the "Sedition" portion ran against the US colonial tradition adverse to the British criminal libel (sedition) laws.

Why ? After all, the Sedition part (applicable to US nationals) required a triple whammy proof: falsehood, scandal and malice - as well as an intent to excite "the hatred of the good people of the United States" as one alternative.

If you go back to the political football that the Sedition clauses generated in the Adams and Jefferson administrations, you will find that folks on both sides were playing hardball, verging on insurrection; and that harm was certainly intended (and sometimes effected).

IMO: The reason the Sedition clauses were disfavored was that the speech prohibited struck to the heart of our political system - but without crossing that line where that speech became a "clear and present danger" as part of an insurrection. As such, mostly unregulated speech in this vital political area provided a safety valve against a transition to actual insurrection.

To the 9th Circuit majority, harm, intent and malice are all critical factors. Presumably to them, the greater the harm, intent and malice, the more that legislation can regulate speech. Yet, that is not the history of our First Amendment going back to Zenger. Certainly, the First Amendment looks to "freedom of the press" (not unlimited); but also looks to political freedom and assembly, religious freedom and also, though not expressed in the amendment, economic freedom. Those are the speech areas in which regulation is most suspect; and those are the areas that "matter" (as Jay Bybee writes).

In the 9th Circuit case, the interference of the Stolen Valor Act with politics, religion and economics is not apparent to me; except in one respect. Alvarez made his false statement in a political context. Some politicians enhance their service records (or invent them) - just as the anti-Adams and anti-Jefferson folks libelled those office holders (and probably lied about their own credentials). So, lying is part of US political advancement - and is best met by counter-facts telling the truth.

So, I can't totally agree with Jay Bybee that:

The principles in New York Times do not extend to false self-promotion. Nor do these principles extend to false self promotion by public officials - that is, to officials who portray themselves in a false but positive light. Public discourse requires that citizens are equally free to praise or to condemn their government and its officials, but I can see no value in false, self-aggrandizing statements by public servants. Indeed, the harm from public officials outright lying to the public on matters of public record should be obvious. If the Stolen Valor Act “chills” false autobiographical claims by public officials such as Alvarez, our public discourse will not be the worse for the loss.
I also "see no value in false, self-aggrandizing statements by public servants." But, I also cannot see where those statements should be made criminal - especially in our present "era of absolutism" where "I gotcha" is the prevalent mantra.

So, perhaps, we should have a limited, qualified constitutional privilege for lying, venal politicians - and simply rely on outing them as both Entropy and Global Scout have suggested.

Regards

Mike