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Sunday, October 27, 2013

New York City: Back To The 1980s (Part 2)

For several years I have intermittently reported on a gradual deterioration in New York City street conditions.  The major media is catching on. Today's New York Post reports on an increase in subway panhandling as well as growing public disgust.

One side point: The popular perception is that the crime increase (or crime wave, if you will) is attributable to the recent federal court ruling holding that the City must revise its procedures on the controversial (and effective) stop-and-frisk technique.  I strongly disagree; see my post from earlier this year which pre-dated the court ruling by months. The trend is not months in the making; it is years and it began to show during (but was hidden by) Bloomberg's second term.

The fault line in New York politics is this: Were you here (that is, in New York City itself and not its suburbs) before Rudolph Giuliani's election as Mayor in November 1993?  

I'll bet that question would yield an interesting break in the two-to-one support predicted for Sandinista candidate Bill de Blasio (D-Managua) over insipid Republican candidate and typical ex-bureaucrat Joe Lhota.


The full text of my report from this past spring is below:
If recent crime statistics are an indication (and they are), New York City may be returning to the ugly, pre-Giuliani years of rampant violent crime, when Gotham was less Sex and the City and more The Warriors.  Many Manhattan neighborhoods are seeing alarming spikes in crime, but my reporting will tell you that quality of life crimes or degradations are on an upswing, stats or no stats.
Anecdotal evidence of this retrograde transformation (or deformation) is widespread throughout "good" neighborhoods, in Central Park, City Hall Park, virtually every subway line and every transportation terminal (the exception is the new PATH station downtown).  Belligerent street people -- smelly or evidently deranged (or acting that way on purpose to effect the "pay me to go away" shakedown) -- have returned with a vengeance.  However, this trend has been developing for several years.  For example, the midtown Port Authority bus terminal has had a permanent homeless class since at least 2009 but which has steadily worsened over the last six to nine months.

Eric Dixon is a New York and New Jersey lawyer who grew up in New York City during the Koch and Dinkins Administrations (1978-89; 1990-93). You can guess his preference now.

Friday, October 25, 2013

The Audacity of Failure

My new article, just published by the New York economic think tank Financial Policy Council.  Comments are welcome. 

Friday, October 18, 2013

The Pain of Denying Citizenship By Virtue of Birth

Some American commentators have suggested solving the illegal immigration crisis by outlawing birthright citizenship, i.e., that being born here automatically confers citizenship upon you, because it encourages illegal immigration by allowing "anchor babies" to subsequently sponsor their illegally-entering or visa-overstaying parents and other family members.  These commentators (who are across the political spectrum) should note the injustice (as opposed to the inconvenience) voiced by protestors decrying a new Dominican Republic policy denying citizenship by birthright to Haitians (who share the island of Hispanola).

Readers should consider these major flaws with doing away with birthright citizenship that I explained in 2010.  Unlike other commentators whose focus is on the illegal immigrants, I focus on the risk that longtime Americans would bear under a citizenship-by-government-decree regime. The danger of scrapping birthright citizenship is not in being unfair or dispassionate towards illegal immigrations (as some will charge); rather, the immense risk is jeopardizing the citizenship rights of Americans who have always been here but who may later, tragically, be without an independent means of verifying their own identity and hence their citizenship. 

Monday, October 14, 2013

Cory Booker and Federal Campaign Finance Laws

For anyone watching the special election for Senate in New Jersey, it is NOT news that Newark mayor Cory Booker has completely overwhelmed Republican opponent Steve Lonegan on fundraising.  Booker is a national brand name, a nationally-known rock star who is a viable contender for the 2016 Democratic presidential nomination on name recognition alone.  Add that factor to his fundraising prowess and you'll see why he could be a national contender.

But as for this year, now I will explain why (1) the fundraising advantage is neither as large nor as significant as you think, (2) New York mayor Mike Bloomberg HAD to drop $1 million on a special TV ad buy (and quick, raise your hands if you've seen it -- nah, me neither) -- and (3) Lonegan has a real chance to win despite numerous obstacles

(1) Booker's been raising funds all year. In fact, he started raising funds in 2012 even when the late former Senator Frank Lautenberg was still making public appearances, rather indelicately nudging Lautenberg towards retirement. But note that some of his fundraising solicitations asked for $10,400 instead of $2,600. The smaller figure is the individual maximum limit by law for one election. The reason is that it is a combination contribution for the 2013 primary (past), 2013 general (now), 2014 primary for regular US Senate election and 2014 general election. The effect is to push forward contributions to the present by collecting them now, but the presumed impact is not what you think.  One can only spend funds on an election for which funds have been allocated. Contributions for 2014 cannot be used in 2013 (although contributions raised in 2013 and unspent in 2013 can be carried over to future years). Therefore, the significance is considerable: Booker can only spend ONE-QUARTER of what he's raised right now. 

So, what do you think of that fundraising advantage now?

(2) Mayor Michael Bloomberg's ad buy -- see reason (1) above. Bloomberg doesn't waste money on anything. In fact, he gave $1 million to New York's Independence Party for his last mayoral race (2009) for get out the vote operations, because he knew it was a much tighter race than indicated by polls which predicted a double-digit victory. (Fact: Bloomberg outspent opponent widely but won by...three points! Look it up!)  The Democratic interest groups in New York City are the public employee unions and they turned out their vote, almost resulting in an under-the-radar upset victory.

(3) Democratic operatives are saying they doubt that anyone knows about the special election -- or is motivated to vote -- except for "movement conservatives" and Lonegan diehards. Well, consider this fact: Running a primary against the most popular Republican in the country (Chris Christie), Lonegan got outspent...and got 43% of the primary vote in June 2009.  The fact is that Steve Lonegan has a motivated core group of voters.  Cory Booker's base is out of state and the Democratic organizations in New Jersey are fully aware that Cory Booker has never done anything to help them, financially or otherwise, and they're now likely to return the favor.

If observers remember how turnout was suddenly lower than expected for former New Jersey Governor Jon Corzine in November 2009 (against Christie) in major urban centers in Essex, Hudson and Union Counties, that phenomenon may repeat itself this week.

This is an "elbow grease" election. As in sports, the side that works harder often can and does win. 

Saturday, October 5, 2013

Washington Redskins: More Than A Name

The longtime nickname "Redskins" of Washington, DC's National Football League franchise has in recent years become the target of activists claiming the name is racist and derogatory towards Native Americans and should be changed.  Now the President of the United States has opined that the team's "attachment" to the name "Redskins" is not enough to overcome the sentiments of many that such names are offensive.

One main problem: the name represents --- no, it is -- a brand.  And that brand has value. More to my point, that brand came at a substantial cost: $750 million in the reported purchase price in 1999 by current owner Daniel Snyder. 

Nickname and logo changes can have subtle and sometimes adverse effects on team valuation. When you are an 80-year-old franchise you have a fan attachment that translates strongly to attendance, merchandising and licensing revenues and so on.  Daniel Snyder did not merely buy the right to operate an NFL team in our nation's capital; he bought a historic, established franchise with an equally established fan base. 

The brand matters.  

Should the forces asserting a group offense prevail, and the name is eventually changed, there is a real risk that the team's value will decline. Usually, teams change names for reasons related to wanting to enhance the value.  Logos age and sometimes get outdated; sometimes management wants to revitalize the brand and a logo or name change may do the trick, especially if the brand is considered undervalued.  There's actually precedent there: the National Basketball Association has had a few teams change names: the Washington Bullets became the Wizards in 1997 and the New Orleans Hornets just adopted the name Pelicans this summer.  However, those name changes probably increased those team's values from fairly low baselines, so there is no ready analogy for use with the Redskins.  (Another problem is that sports clubs, other than the Green Bay Packers and Boston Celtics, are private enterprises and are thus always hard to value except when "marked to market" when sold or refinanced.)

I can think of one collegiate sports program where the value may have declined since the change.  The St. John's University (N.Y.) called its teams the "Redmen" and its college basketball program was among the very best in the nation in the 1980s (the heyday of Coach Lou Carneseca and players like Chris Mullin).  In 1994, the University succumbed to the same pressure now being applied to the Redskins, and changed "Redmen" to "Red Storm."  Arguably, neither the program (by any metric you pick) nor its profile in the Northeast / New York City metropolitan area has recovered to its prior heights.

But consider what would happen if the most indisputably iconic sports brands, teams like the Dallas Cowboys or the New York Yankees, were changed. 

If the Cowboys became, say, the Dallas Texans (ironically, an unsuccessful predecessor to the Cowboys, lasting only the 1952 season), and changed their Big Blue Star to a "T," what would you think would happen to the value?

More to my point, how much of your money would you bet on the value even staying constant? Right, me neither.

Former President George W. Bush was a minority owner and managing partner of the Texas Rangers in the 1980s. Can you imagine Bush ever suggesting to an owner of a pro sports club -- or any private enterprise -- that they consider changing the brand name because some group of people (which likely includes just a few token Native Americans as "fronts" for the group) asserts that they are offended?

I ask: Who does Daniel Snyder go to for compensation for the name change?  Will the government bail him out? Will any Native American "tribe" come to his aid? Or will Snyder get a condescending lecture on his duty to society to suffer hundreds of millions of dollars in evaporated value, quite possibly never to be regained, in the name of some sort of justice?

President Obama is out of bounds on this issue. 
 

An ObamaCare website safety tip

The main government website (healthcare.gov) seems to be designed more to collect information on prospective customers than on allowing access to rudimentary information such as plan details. This is why the site forces users to enter personal information, including answers to "trigger" questions, before bringing you to state web pages. None of this is accidental.  

This is exactly what many private companies do if you want to access information.  After all, information is not free.  The difference with the Government's site is that exchange participation is now legally required -- and the only option for millions -- so many people are essentially forced to enter personal information in order to access basic information.

Want to avoid the risk of data breaches because of the carelessness -- or mendacity -- of the most careless government worker?  Here's a perfectly legal way to circumvent the government website: go directly to the websites of the companies participating in the exchanges in your state. Better yet, call those companies. (Yes, minions, that smartphone thingy is useful for actually making phone calls with, you know, real people!)

This is the "old way" of doing things but it will allow you to be free from data security problems. It's a little more legwork and, admittedly, takes some effort.  The payoff, however, is a lot more security and privacy.