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Friday, April 30, 2010

Body Organ Harvesting in the Vampire State


In New York, driving may really cost you an arm and a leg.
New York State moved closer to becoming the Vampire State this past week when Assemblyman Richard Brodsky (D-The Island) sponsored a bill mandating that drivers in New York become organ and tissue donors automatically once they get a driver's license.  Brodsky's bill would reverse the current system which allows for drivers to check a box to volunteer to donate organs; his bill would automatically enroll all drivers regardless of their health or religious or sentimental objections, and non-participation must be requested by checking a box to "opt out." 
The bill provides -- in capital letters -- that "IF THE APPLICANT DOES NOT DECLINE TO BE REGISTERED IN THE NEW YORK STATE ORGAN AND TISSUE DONOR REGISTRY THEY WILL BE AUTOMATICALLY ENROLLED."  (Click here to read the actual bill.)  This means that if you do not "opt out," because you don't know or for whatever reason, the state can come in and harvest your body after you die to salvage any and all "useful" organs.
There are numerous problems here.   First, the sanctity of the human body becomes subject to bureaucratic "mistakes."  It is easy to imagine records of the check-off being "lost" so as to facilitate a desired organ harvesting.  Secondly, there is a thriving black market for body organs.   Just a few years ago a major criminal case broke in the New York / New Jersey region involving funeral home workers desecrating the deceased to harvest and sell human tissue; even in the legendary Bid Rig corruption investigation in New Jersey, at least one rabbi was arrested in connection with the sale of a human kidney.  There is no reason to believe that greed will not induce future desecrations, particularly when the deceased pass alone or with no friends and family capable of defending their rights.  Those who have been vulnerable while alive and relatively healthy will be especially susceptible to abuse when in poor health or on death's door.   Remember, when the ends justify the means, little things like personal sensitivities and family wishes will be ignored in order to serve some high-falutin' purpose -- and someone's private profit. 
But the third and most serious potential danger lies in the temptation to withhold medical care from the living in order to hasten their death (or cause it to happen in the first place while arranging for a plausible "cover" or explanation for the death) and create the opportunity to salvage organs.  Again, we must not make the mistake of thinking about the benevolent purposes, about the people who will be helped; for policy reasons, we must also anticipate the nefarious purposes and the dark side of human nature, those elements in our society which are immoral or entirely atavistic.   There are people who would today kill others to salvage organs; this bill will facilitate their actions tomorrow, cloaked in the apparent legitimacy of a doctor's white coat.  
Today, all sorts of rationalizations are offered to justify harming one person for the private benefit (monetary or physical) of another.   Two generations of Americans have grown up being taught that in utero infanticide via abortion is permissible "in order to spare the baby the suffering" of being born to an unfit, impoverished, immature or overwhelmed mother.  We have outright murder dressed up as euthanasia and lionized in a recent HBO movie about Dr. Jack Kevorkian.  If Brodsky's bill passes, what will prevent the unscrupulous from killing others for their organs?  Cover-ups in violent crimes are attempted all the time; why encourage this cottage industry within our hospitals and medical schools?
"New York -- it's a terrible place to die."
-- Former United States Ambassador to France Evan Galbraith, quoted on the campaign stump while running for the Republican nomination for New York Governor in 1994.
The Crime, Politics and Policy blog hereby asks all readers to contact Assemblyman Brodsky -- and all other New York State legislators -- and voice their strong legal and moral opposition to this bill.
Eric Dixon is an attorney in New York who engages in strategic analysis of a diverse mix of legislative, economic and other policy matters, and handles certain civil rights and civil liberties matters.  Mr. Dixon may be reached at edixon@NYBusinessCounsel.com and by phone at 917-696-2442.

Thursday, April 29, 2010

Privacy Rights vs. Actual Privacy


People should understand the difference between legal privacy, the degree of privacy which they are entitled to under the law, and actual privacy.   Legal privacy means that certain things such as personal e-mails sent on an employer's computer cannot be used as evidence in litigation (as covered by Crime, Politics and Policy earlier this month, see here for my analysis of New Jersey Supreme Court's Stengart case).   It does not mean that those things, such as those e-mails, are actually private.   People should understand that  "legal privacy" is not privacy at all, in the traditional sense.
The best protection against an invasion of privacy is not some fancy technology or some super-strong firewall.   It is, and always has been, your discretion and judgment.   We are afforded a liberal freedom of expression under our Constitution.   That freedom comes with a consequence.   In our common zeal to "express ourselves," we often forget that our control is limited to what we say and do.   We cannot control who observes us, or judges us.   Our rights to express ourselves, to be free, stop when they infringe upon another's rights.   We do not have the right to restrict what others say or think or do.  To the extent we want to control others' opinions of us, we are limited to controlling what we say and do.   In short, our Constitution and our concepts of individual liberties put a premium on individual responsibility.   This means that people ought to act with a sense of judgment and decorum. 
Eric Dixon is a New York lawyer who advises certain political candidates and organizations on sensitive reputational issues which may involve certain Constitutional rights.   He can be reached at 917-696-2442.

Give Even The Tiniest A Chance


A recent report out of Italy provides additional anecdotal evidence of the viability of very tiny, young fetuses who can survive abortion procedures performed as late as the fifth month of pregnancy.  See this report from England's Daily Telegraph.
It is the hallmark of a civilized society to care for its most defenseless.   When a mother ceases to protect her child, a civilized society should step in to protect the child -- in some cases, from his/her own mother's narcissism.   Although many mothers find pregnancy incredibly traumatic and unbearable, our society has the resources, capacity and sensitivity to help mothers cope with the burden of continuing with a pregnancy so that, at the very least, the baby has the maximum chance to survive independently.   Questions as to the baby's care afterwards should not interfere with the efforts to maximize the baby's chances to live. 
The author of this blog was born prior to 28 weeks' gestation, weighed less than two pounds for a time after birth, and according to the medical practices of the time when he was born, should not have survived.

Sunday, April 25, 2010

Arizona Immigration Police Watch: Government Abusing The Innocent

The latest example of individual rights being threatened because of the federal government's abject dereliction of duty is a new Arizona law that requires state police to ask for identification and proof of "legal status" (as to being in the country legally) from anyone whom they suspect is an illegal immigrant or alien.  (See this Washington Post report)   This law is a reaction and response to the lack of federal border control.   And the people of Arizona -- of all skin colors -- will now pay the price. 

There is a huge danger from unintended consequences.   State troopers and local police will now be required, as a practical matter, to stop all sorts of people inside the state.   This will not be done out of racial profiling (although some will engage in precisely that, not that it is always improper).   Rather, the police will be stopping people primarily to ensure that they are "complying" with the law; in other words, they will feel pressure to hassle all sorts of people in order to safeguard their own jobs.   Arizona police will now be pressured to take actions which may violate the rights of -- or at least strongly inconvenience and induce discomfort among -- United States citizens as well as legal aliens (green card holders) for no other reason than their own entirely rational, personal risk-aversity with respect to their own career.

The prevalence of illegal immigration (or more accurately, the relative ease of entry across the border from Mexico by migrant workers and transients -- because many are not "immigrants" in the classic sense of the word) is undoubtedly a big problem and security risk.  However, the real problem with this state law is that it is the product of the federal government's utter failure to secure the borders.   As a result, citizens and legal residents in Arizona will now face grave inconvenience, intrusion, discomfort, intimidation and possible deprivation of their Constitutional rights (see both the First and Fourth Amendments).   And all because the federal government has failed to do its job.

Do Not Plagiarize A Lawyer's Work

A recent development from New Jersey Superior Court, Hudson County.   Two lawyers, a husband-wife team of former county prosecutors (of which the wife was also briefly a former federal assistant prosecutor and is currently on a lawyer ethics committee!!), were sued by another lawyer for nonpayment of subcontracted legal services.   The husband-wife team were alleged to have accepted the work, referring to it as "great," and then refusing to pay for the work and threatening the other lawyer when he confronted them about the nonpayment.

After seven court dates, four last-minute adjournments at the defendants' request (all of which violated the county Superior Court's own rules) and additional threats and allegations made by defendants against the plaintiff to induce him to discontinue the case, the case was finally docketed for trial this past week.   The case was first on the docket beginning at around 8:30 am, but was heard at 2:30 pm.

Verdict:  For the plaintiff.

Lesson:  Lawyers -- even former county prosecutors -- are not above the law.  Lawyers who use or steal another lawyer's work without paying for it, and then engage in various threats and other actions in order to avoid responsibility, can still be made to face the music with enough effort and tenacity.   Even in New Jersey.

Wednesday, April 21, 2010

Fabrice Tourre Should Stay Quiet

Reports today that Goldman Sachs vice president Fabrice Tourre, the one individual charged so far by the Securities and Exchange Commission in its civil suit against Goldman, will testify before the Senate Finance Committee next week. Tourre reportedly was "invited" to testify prior to the civil suit, but surely knew he was a target of the investigation (as Goldman received its "Wells Notice" back in 2009).

Why would Tourre say anything? He undoubtedly has the risk of civil and potential criminal liability. This is compounded by the political climate and a climate in which the S.E.C. wants to redeem its reputation. Tourre's head will fit nicely on someone's mantle; indeed, any head will do. Moreover, as one report indicates, Goldman is already trying to portray its young executive as a "lone wolf" investment banker, indicating to Tourre that he is being thrown under the bus.

Perhaps -- just perhaps -- Tourre may be thinking about "cooperating" in the civil probe, or any unannounced criminal probe. (There can be no certainty either way; the uncertainty should not be used to point to Tourre's theoretical and as yet totally speculative criminal culpability in any way.). But then why testify? Why give the other side (in any action) any advantage of knowing what you will say? Plus, there is a record, as testimony would be on the record.

If Tourre is testifying because he is worried about his reputation, I would think this is a situation where he has to bite his tongue and bide his time. There will be a calmer time during which he can tell his side, and the current witch hunt madness may not be optimal.

If Tourre does testify, I think it may show great confidence in his story. Nevertheless, when someone is out to get you, it may be prudent to be quiet and lay low. It's not as if he won't have further opportunities to talk, just that now is not optimal in my opinion.

For conspiracy theorists who think his testifying is a Machiavellian way to generate legal fees (by exposing him to trouble in order to then bill time on the rescue), be advised that I think his lawyer is definitely not among that subspecies of unethical lawyers who put personal interests ahead of clients.  Reportedly, Tourre is being represented by prominent white collar defense lawyer Pam Chepiga, of Sullivan & Cromwell. Chepiga and her firm are among the best reputationally.   Nonetheless, Tourre -- and others similarly situated -- would do well to make sure that they are the ones paying the legal fees and choosing their counsel, not their employers and certainly not the D&O insurance carriers, so they can be more assured that their counsel is in fact putting their interests first and not the interests of the entity actually writing the check.

Eric Dixon is a New York attorney with a background in securities regulation.  He investigates complex matters in a variety of fields.   For further comments or inquiries, he can be reached at 917-696-2442 or at edixon@NYBusinessCounsel.com.

Tuesday, April 20, 2010

Feds Crush New Jersey Election Lawyer, Ex-Hoboken Mayor

Hudson County, New Jersey, a place where former Governor Brendan Byrne remarked he wanted to die in, so he could stay active in politics. A place where politicians march in parades one day and march into prison the next (see Guy Catrillo).

Another Hudson County politician will get ground into powder today (according to early reports); former Hoboken kid mayor Peter Cammarano, who was on tape accepting a bribe from David Esenbach (real name: Solomon Dwek), will plead guilty today in Newark federal court.

Peter Cammarano III was elected mayor of Hoboken just weeks before being busted in the Bid Rig takedown of dozens of New Jersey politicians (including the aforementioned Guy Catrillo) and a few rabbis.

Cammarano practiced election law under the wing of noted Democratic lawyer Angelo Genova.

So far, all guilty pleas except for Leona Beldini who was convicted of two counts and acquitted on four counts at trial.

Cammarano's plea is no surprise as prior pleadings on the docket supported the inference that there were plea negotiations with the government.

Saturday, April 17, 2010

Goldman Case: Regulation Through Litigation?


The congruence of the Obama Administration's eagerness for financial system regulatory reform and the announcement Friday of the Securities and Exchange Commission's civil lawsuit against Goldman Sachs Group Inc. and a mid-level vice president, Fabrice Tourre, makes one wonder whether this enforcement action is an effort to use litigation to achieve what cannot at this moment be accomplished through regulation.  
Surely there are many cases -- civil as well as criminal -- brought by the authorities despite a clear basis in law, leading to frustration and a drive to go to the edges of the law (or beyond) to build a legally justifiable case against someone for conduct which is disfavored and sought to be deterred (unethical conduct falls in this category), but which is not illegal.   In short, these cases illustrate the use of civil litigation  (and in the criminal context, investigation with the threat of prosecution and incarceration) to meet the objectives of regulations which do not exist.
It remains to be seen where the Goldman case falls.   The facts of this case are undeniably very complex, and far more complex than what was spelled out in the civil complaint.  Remember this admonition when you hear so-called experts opining on this case.
There are claims that Goldman breached some sort of fiduciary duty to some supposedly very sophisticated investors.   However, a breach of a fiduciary duty, without more and in isolation, is not a crime.  At least, not yet.  That doesn't mean there won't be efforts to use some other theory to disguise the effort to criminalize fiduciary breaches.   But beware of "theory shopping."  Last week I reported that the Third Circuit Court of Appeals rejected a Justice Department effort to essentially transform a claimed breach of fiduciary duty (which is generally a state law claim under state corporate law) by two Bristol Myers Squibb executives into a federal criminal act -- a felony. 
One other point:  Nothing in this article should be read to infer that I defend, condone or encourage any of the challenged behavior.   (This is the business/economics world equivalent of what the Star-Ledger's Paul Mulshine aptly calls the "moron perspective.")  Here, the fact that I refuse to automatically jump on the Let's-Hang-Goldman-Sachs bandwagon does not mean that I agree with, defend or condone anything that any of these banks or their affiliates have done.   For now, perhaps it is best to view this case through the prism of the simple phrase "failure to disclose."
Eric Dixon is a New York attorney who has significant experience in securities regulation and related litigation.   He understands that these cases and controversies are typically very complex both factually and legally.   For inquiries, please call 917-696-2442.

Friday, April 16, 2010

Goldman Sachs Sued by SEC on Subprime Fraud

Quick hit: civil suit against Goldman Sachs and a mid-level VP for selling subprime-mortgage related product and essentially betting against its customers. Seems like a major issue is a failure to disclose.
Notably, SEC Enforcement chief Robert Khuzami declined to answer question whether a referral for criminal investigation has been made.
Who else is involved? What are the potential liabilities?
What will happen with financial reform?

(Updates/analysis to follow this weekend.)

Sunday, April 11, 2010

Court Rejects Christie's Omission Liability Theory


This past week, the Third Circuit Court of Appeals upheld a lower federal court ruling which rejected the Justice Department's use of an apparently made-up theory of "omission liability" in connection with criminal charges against two high-ranking Bristol Myers-Squibb executives.   The case is U.S. v. Schiff and a PDF version of the opinion is provided here.   The appellate court upheld earlier criticisms of the government case made by the district court judge, Faith Hochberg, herself a former United States Attorney for the District of New Jersey.
The criminal case against the executives was brought in 2005 and is still pending because there are several charges against the two men.  This case attracted a lot of attention several years ago because it involved a very promin It is interesting to read the Third Circuit's strong criticisms of the case, in no small part because of the apparent expansion of criminal liability, in ways that Congress did not intend, by federal prosecutors working in the United States Attorney's Office in Newark, NJ under the then-stewardship of now-New Jersey Governor Chris Christie.   Interestingly, the related shareholders' civil lawsuit (a federal class action) against Bristol Myers and others was thrown out of Manhattan federal court in 2004 (as noted by the appellate court in its footnote, see page 12 of the opinion).
The Third Circuit upheld the District Court's March 2008 ruling that there would be no further "legal theory morphs" in the Schiff case and criticized the government's "shifting and adding to its theories" of the criminal liability of the defendants (see p. 16), chiding it for playing "musical chairs" both in pretrial proceedings and during the appeal process "with their pursuit of changing legal theories" under the standard securities anti-fraud rule known as Rule 10b-5, and further criticized the government for its "introduction of new legal theories [which] appear[] designed to find new creative ways to hold [the defendants] liable" for certain of Bristol Myers' SEC filings (see pp. 17-18).   Then the court noted that the government had stipulated (meaning it agreed or admitted) that there were no "affirmative misstatements" in those SEC filings, yet its lawyers tried to use their new theories in order to bring back into play those filings, so they could argue that the defendants were criminally liable for misstatements in SEC filings which the government itself had admitted contained no such misstatements.  (See pp. 17-18.)  Get it?  
The appellate court ruled that either the federal government waived its right to use those theories (by agreeing to the stipulation admitting there were no misstatements), or that the omission liability theories "were not legally viable as federal crimes."  (See page 19.)   Furthermore, as much of the rest of the opinion makes clear, the government case seems to be an attempt to convert what is arguably a civil case involving an alleged breach of fiduciary duty, by means of failing to correct an earlier omission, into a criminal act, despite the fact that some time-honored court cases involving the securities laws have recognized that silence is not fraudulent or misleading under Rule 10b-5 (analogous to the main antifraud statute) in the absence of a duty to disclose. 
The government's use of these theories -- if not its approach in the Schiff case -- is troublesome.   First, there is the practical problem that corporate executives have in trying to comply with not only the law, but also with an as-yet-unimagined interpretation by some anonymous prosecutor (who may well be trying to impress either a superior or prospective employer by engaging in what they might euphemistically call creative lawyering and what some others might call sophistry).  In such a scenario, a hapless and totally innocent executive or manager may be totally blameless, and certainly free from any type of nefarious or criminal intent, yet his freedom could be in jeopardy because of some twisted, untested and possibly wholly-illegitimate theory.   This just does not seem right and just, on principle.   But this theory was blessed and pushed, under the stewardship of now-New Jersey Governor Chris Christie. 
The second problem with the government's approach is that it indicates a mentality which approves of prosecuting people even when their actual wrongdoing may be very speculative or highly uncertain, or when such an investigation may be unsupported (or just plain wrong) by the facts or improper or wrong as a matter of law.   What can one conclude about people who would "go after" someone but having to resort to a new theory to do so?   It seems like actual wrongdoing became irrelevant, because the "chase" after a prominent business executive had the allure (or potential to generate career-enhancing headlines) to justify changing theories.  By extension, this would mean that a local federal prosecutor's office employing such theories and tactics would imperil any business executive whose activities raised their ire.  You can see that such a mentality brings us far from our classically held notions of justice and fair play, and quite near to a system where prosecutorial power stops being a check on wrongdoing and instead becomes a tool of the state, a means for political repression and, in this case, economic control. 
Another problem is that the pursuit of these defendants using multiple, changing and evolving theories strongly suggests that someone, instead of being "man enough" to admit to a mistake or error in professional judgment, chose to pursue all sorts of theories -- even if that would mean violating an earlier stipulation -- in order to chase professional achievement (the notch on the belt) and in order to cover up the earlier mistake in judgment.   Where is the professional confidence, not to mention personal integrity and moral character, to stand up and say, we made a judgment, we tried our best, but the facts don't justify this investigation continuing or the law doesn't support it?  The game of musical chairs with these theories suggests clearly that the facts did not warrant a prosecution on such an evidently-flawed basis.
Read this opinion, and consider that fact, the next time you hear Gov. Christie mentioned as a "pro-business" or "conservative" governor, or even as presidential timber.  In the Bristol Myers investigation, you can see that federal prosecutor Christie had no problem pursuing certain defendants, even when the facts were so weak that his office had to violate a stipulation and repeatedly shift around various theories of wrongdoing.   It should be of grave concern for the business community when its ability to operate lawfully, and for its executives and managers to avoid having their freedom threatened and lives ruined, becomes unpredictable due to prosecutorial overreaching or some young lawyer's "creativity."  

A functioning capitalist economy requires predictability in its laws; indeed, that feature is a requirement for the rule of law to exist.   However, when "the law" is defined not by its lawmakers (i.e., Congress) but by unelected, faceless prosecutors (i.e., bureaucrats who passed the bar exam), you have an environment hardly conducive to any free enterprise.  People complain about an activist judiciary, but the Schiff case indicates that under Chris Christie, the New Jersey U.S. Attorney's Office was a very activist bureaucracy...but one with the power to ruin people.  (For more on this concept of how prosecutors have the power to ruin people, buy and read Harvey Silverglate's fine 2009 book Three Felonies a Day, which I have previously mentioned and recommended to all of you.  Don't go to the library; buy the book -- it's worth it because it's worth reading, keeping and using as a reference.)   
The Schiff investigation was launched and pursued during Christie's long tenure as New Jersey's United States Attorney.   This puts him in the unenviable -- if not untenable -- position of having to explain to that state's business community how it can feel comfortable when investigations and prosecutions can be started, brought and pursued even despite the absence of facts supporting a valid theory of liability.   Oddly enough, the very same criticism was leveled at the Manhattan U.S. Attorney's Office several years ago when it brought a series of cases, also on an untested and spurious legal theory.   Among the people investigated -- and in one peculiar instance, someone who was not criminally charged despite having been found by the Securities Exchange Commission  to have had a substantial role in the challenged activities -- was a man named Todd Christie. 


Tuesday, April 6, 2010

In Politics, Beware of Labels

Most brand marketing uses labels, and some of it is misleading. Other labels are designed to mean one thing while taking advantage of a popularly-held misconception. Just consider the term "organic" which should not be considered synonymous with "healthy."

Here's something that's organic: anthrax. I can hear it now:

The miracle weight loss drug, Anthrax.
Side effects may include breathing difficulty, respiratory failure and sudden death.
Ask your doctor if Anthrax is right for you.

So it is with political labels. The term "Constitution" and phrase "defending the Constitution" are being thrown around much, much more than they were two years ago. I doubt it's because our President is a former constitutional law professor.  (Indeed, President Obama was a con-law professor at the University of Chicago law school.)

The terms "Constitution" and "defending the Constitution" and other like phrases convey legitimacy and an adherence and obedience to a legitimate-sounding set of beliefs. Many of the terms are used by people whose views can be described as, "don't know much about it, but it sounds good."   But beware that this cloak of legitimacy may conceal the true meaning, purpose and motives of its wearers.  After all, the veneer of legitimacy -- the facade, if you will -- is no substitute for honest substance.

Other oft-abused terms: independent, reform and conservative. For some reason, the term "progressive" seems to be much more carefully used.

Saturday, April 3, 2010

Privacy Rights Upheld in Workplace, But Privacy Still At Risk

This past week the New Jersey Supreme Court (the state's highest court) held that an employee had a right to privacy and enjoyed the attorney-client privilege as to e-mails she sent to her attorney from her workplace computer.   The case is Stengart v. Loving Care Agency, Inc..

I cannot help but think that the underlying conduct shows a dearth of common sense.   The employee was contemplating suing her employer, hired the attorney for the purpose of that litigation, and actually followed through with a lawsuit.   This means that the employee should have known that her employer could have accessed or monitored her computer and any e-mails she sent (even if through a personal e-mail account).  

The questions of whether the employee should have known, or whether the employer should have been able to monitor that e-mail in the first place, are irrelevant to the common sense fact that the employee left herself vulnerable to the practical, strategic error of allowing her adversary the opportunity to peek into and learn about her strategy, approach and arguments. 

Some litigation is won -- or lost -- well before the case ever hits the courtroom.   Strategic errors can make or break a case.  A smart investigative lawyer can piece together a lot of disparate facts, which in isolation may make no sense or seem entirely useless, to uncover a pattern.   In other instances, that same lawyer may be able to use reverse engineering to protect a client.

Employers will be able to snoop in on employees, through various means -- legal or otherwise.   True protection of privacy requires that people never assume that their potential overseers or adversaries cannot or will not take a particular course of action.   I fear this case will give a false sense of security to many innocent and perhaps overly trusting people.  

There is a difference between being able to do something (whether you can do it) and whether you should do it.   As I have said before, if you want to discover your best protection against your privacy being invaded, just look in the mirror. 


Friday, April 2, 2010

Real Unemployment Increases!

The Department of Labor announced Friday (with the stock market closed) that payrolls rose by about 162,000 in March, a figure which includes about 48,000 census workers and likely more seasonal accountants and tax preparers.

Before you believe any spin about this being good news (such as White House chief economist Christina Romer saying this shows "gradual labor market healing"), consider that the total "underemployment" rate (including part time workers who wish they were full time, and others who want work but are considered to have given up) went UP from 16.8 to 16.9 percent.

On a related economic note -- expect to see more overt signs of economic distress such as unemployment actually rising, more business failures, more foreclosures and more business space vacant.   Even if there is a "recovery," that simply means that conditions are improving when compared to an earlier period.   The shock experienced in the credit markets was severe in 2008-09 (and is not over by any means, just not as grave).   An improvement still means that conditions are serious.   Therefore, many businesses may continue to suffer and experience negative cash flow (accounting for debt service) or liquidity crises (both of which can kill a going enterprise even if it is profitable on an operating basis).   A recovery may mean conditions are improving -- but do not assume that such improvement will be enough to stop the bleeding.   The rate of deterioration may lessen -- but it may not stop.   Business failures (which are a lagging indicator) will continue to pile up.

Eric Dixon is a lawyer in New York and New Jersey who also engages in strategic and economic analysis for clients.   He can be reached at edixon@NYBusinessCounsel.com.

Thursday, April 1, 2010

The Lost Art of Crossing The Street in Jersey

The newest example of passing a law to compensate for stupidity comes from...New Jersey.

A new law going into effect today requires motorists to come to a complete stop for pedestrians who enter a crosswalk.

In most of New Jersey, where sidewalks are uncommon, this will require risk-averse drivers to stop for any person on the curb in order to be reasonably assured of not getting a ticket. In more urban areas, drivers should just assume a stop sign exists at every intersection to avoid the risk of a $200 ticket and two points on the license. In all areas, traffic will slow down...in some places, considerably. This will deter speeding, but also impede necessary traffic. It won't be a good day to be a patient in an ambulance. On balance, let's see how many lives are lost now.

It would have been easier to teach people how to cross the street. But that doesn't raise revenue, nor does it placate the police, some of whom have little to do (other than in Trenton and Newark) besides scratch the itch to wield their authority while collecting their six-figure above-market salaries and taxpayer-underwritten benefits

And that's no joke!