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Wednesday, December 30, 2015

The Three Tea Parties And The 2016 Republican Race

The Obama-admiring and allegedly George Soros-financed Occupy Wall Street movement seemed to be efficient, effective and highly centralized when it publicly emerged in 2011.

Occupy quickly accomplished the same effect on the Democratic Party as its perhaps-polar-opposite on the Right, the "Tea Party," is credited (or disparaged) for doing to Republicans: causing its target to lurch sharply from the center towards the political fringe.

The Tea Party movement is different. The movement is largely characterized by its adherents in elected office who advance the causes of fiscal restraint and, to a lesser degree, constitutional and lega restraint. As such it is less a reform movement than a restraint movement. Yet the Occupy comparison is apt. The Tea Party's true target is not its ideological antithesis nor its obvious political opponents, but rather the GOP establishment.

This classic view is somewhat at odds with the activist view, which supports the theory that the movement consists of three competing camps which do not often move in tandem or even in a coherent direction.

The first camp is an establishment co-option of the movement. This camp does not consist of elected officials like Senators Ted Cruz and Mike Lee, who are outsiders on Capitol Hill. It consists of the Washington political, business and media establishment insofar as they see how using the movement to both make money and divert resources (e.g., activist contributions) away from the second or third camps.

The second camp consists of the populists. These are the people who "feel" their positions. This camp is described as more psychological than ideological. They have energy but rarely a coherent strategy that they can execute. Also lacking in tactics and often the barest of campaign materials, this camp can get primary challengers and even the occasional general election challenger like Delaware's Christine O'Donnell, but they cannot win and have not yet won a race of major significance.

The third and smallest camp consists of those intellectuals and professionals who understand both the ideological basis for policy reform and the mechanics of a successful campaign. They are not necessarily activists altogether they work just as hard; they may be described as working smart to make up for the lack of sheer numbers. They are most often found in or around businesses and campaigns and do not need to use the tea party label. They do, however, act as opinion leaders and, crucially, they don't just talk and scream and wave signs. These are the dependable voters who are self-motivated.

They also write checks.

So which camp is dominant? The clues lie not in what is said, but what is done. That is, it's all in the behavior.

Monday, December 21, 2015

What Is A Right?

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There are some self-styled free-market advocates who believe that free markets and liberty require absolute open borders. This is an issue because of the recent Senate bill introduced by Senators Ted Cruz and Jeff Sessions -- to which I link, and which I strongly suggest readers carefully read, and which I further discuss here:

http://www.ericdixonlaw.com/2015/12/examining-h1b-visa-reform-bill-and-its.html

to restrict H1B visas to those workers making at least what comparable American workers made, or $110,000, whichever is greater. The goal is to prevent American companies from firing American workers and replacing them with cheaper foreigners.

Funny how the discussion divides along lines of citizenship more than ideology. There are some "Objectivists" (the Ayn Rand disciples) -- not surprisingly, they consist largely of foreigners who really, really want to come here -- who argue that foreigners have pretty much an absolute right to an H1B visa.

The "right" to come to America is is not a "right." This is a privilege. As for the H1B visa and any other visa granting the right to entry, any such visa is, legally, the equivalent of a conditional license, granted at the discretion of the grantor (here, the United States). That discretion and power is inherent in property rights and the concept of one's dominion (which dates back in human history to the Old Testament). It is inherent in the concept of the property right, the right to sovereignty, of the owner and possessor of the property; here, that means the people who are citizens of the United States. To oppose that concept is to oppose the very notion of the sovereignty of the United States, and at that point, we have a rhetorical invasion of a country that is functionally equivalent to the stated desire for a literal political revolution to overthrow and dissolve the target country.

In this sense, advocating a "right" to open borders, which requires that the host country surrender ITS right to that dominion and control -- i.e., its sovereignty -- imposes a duty, obligation and penalty on others. As such, it fails the definitional test of a true right, which is one that burdens nor affects anyone else.

The Founding Fathers enumerated three basic rights from which all others derive: the rights to life, liberty and the pursuit of happiness. These true rights burden no one else nor require the action, or approval, of anyone else. They are "natural" rights. In that light, under that definition, is the "right" to an H1B visa the same thing?


Sunday, December 20, 2015

Examining The H1B Visa Reform Bill And Its Opposition

Noted Objectivist and Ayn Rand scholar Yaron Brook has taken Republican presidential candidate senator Ted Cruz of Texas to task for his Senate bill that would amend the current H1B visa program to require employers pay visa holders the greater of what American workers (citizen or permanent resident) made two years prior to the petition, or $110,000 annually (adjusted for inflation).

The bill targets American employers seeking to exploit the nonenforcement or lax administration of the visa applicant examination process by bringing in cheap labor, using visa holders to replace higher paid Americans.

(QUICK! - WANT THE FACTS? Senator Cruz's immigration proposals are outlined on this official presidential campaign website, which you can access here. And then, you can donate to Cruz's presidential campaign using this link!)

In so doing, Dr. Brook advances a position with which many self-described conservatives -- and even a good number of liberals and "Reagan Democrats" -- would disagree. The labels actually are irrelevant, but it is those labels and the misguided fealty to them and the principles which some associate with them, which are the true barrier to a real world solution acceptable to Americans. Instead of trying to make our positions and opinions fit a preconceived (and subjective and possibly incorrect) notion of how a certain philosophy is defined, perhaps we should concentrate on looking at an issue and asking whether we agree and what we would change (that is, let's look for a solution) rather than concentrating on whether our position is something that Ronald Reagan would have done, or Ayn Rand would have written, or whatever. But I digress.

It is helpful to explain for starters the program at issue here. An H1B visa is a speciality visa available only to employees engaged in a special occupation whose employer cannot find a citizen or legal resident who can fulfill the requirements of the position. The visa is temporary, and may be obtained only by the petition of the employer, not the employee. Only after the employer is granted the petition can the employee then apply.

Here is the problem. Americans are increasingly unemployed, underemployed and overeducated. The number of Americans not in the labor force is one of only two numerical figures to routinely increase in each new monthly jobs report issued by the Department of Labor (the other being the noncustodial civilian population, that is, people of working age not in jail).

Now, what does the H1B visa program have to do with this? On the surface, at least, it appears to have an admirable and worthwhile goal of helping American business find and keep truly unique talent not available domestically.

Except the reality is different.

Over the years, the program has become abused. The program was intended to help American companies find and keep truly unique and valuable talent which they could not find domestically (e.g., world class athletes, models, computer engineers doing something cutting-edge like blockchain technology, or certain key employees in basically the managerial or ownership classes (think the law firm partner from Hong Kong who comes to New York to build the global practice). 

The Cruz bill (co-sponsored by Sen. Jeff Sessions) sets a floor of $110,000 as an annual salary, which is appropriate for such key talent and essentially says that anyone making less is really not crucial to the enterprise, a supremely uniquely talented worker, or whatever. 

This salary floor is a great prong for the bill. Because those of us in the service economy, who hear a great deal of scuttlebutt, have been hearing about serious abuses.

The result is that junior level white collar professionals, whether they be lawyers, accountants or IT engineers, as well as department store clerks (and the author knows examples of each), are increasingly consisting of H1B visa holders all too willing to undercut Americans of equal or superior talent for a shot at American salaries, generous American government benefits, landing a citizen spouse and maybe de facto permanent American residence if the march towards full nullification of the immigration laws continues at the current ramming speed.

To be fair, the foreigners are not really to blame here. They want to come here. It is the American employers who are willing to undercut Americans' wages and are exploiting the lax or non-existent enforcement of a program that gives lip service to stated regulations. Imagine that: the opposite of the typical government impulse towards overreaching, overregulation and even overcriminalization! (Warning: Violations of regulations, which go unenforced today, can be enforced criminally tomorrow. This is a trap for the unwary.)

American citizens on the ground know the sad truth about the H1B visa operation. They were born and raised here, played by the rules, studied and worked hard, and now find themselves competing at a distinct disadvantage in an economy where skills are commoditized, fraud (including the puffery or outright forgery of credentials) is on the upswing with violators willing to play good odds of Catch Me If You Can, and employers increasingly make hiring decisions on cost instead of quality.

Employers, to whom the program is geared, have long tried -- and largely, very successfully -- to game the system to misrepresent get in supposedly exceptional and unique employees without whom the business would soon perish.

The immigration authorities are supposed to examine the veracity of these applications. These responsibilities are most often honored -- in the breach. If you think Immigration and Customs Enforcement is overburdened (or worse, told to stand down) in its mission to secure the southwest border, think the same with these work visa applications.

The H1B visa program was not meant to recruit foreigners when a suitable American citizen was "not available" at a certain price point (e.g., salary) or willing to travel most of the time domestically because they were single or otherwise without responsibilities or restrictions on their mobility. But that is what it's become: a cost-savings measure.

And the opposition to the Cruz-Sessions bill is curious and misguided. Americans have every right -- indeed, a duty and responsibility to their fellow citizens, their families and especially their children -- to ensure a level playing field economically. Allowing a de facto open borders policy for cheap foreign labor, particularly when it comes from foreign countries which almost universally do not allow Americans to come into their economies, tilts the playing field against Americans. It is inherently unfair, because foreigners who come here, and screw up, or commit crimes, or whatever, have the option to go home. Americans cannot flee abroad -- without serious consequences as well as practical and logistical barriers -- with the same readiness.

An "open borders, open markets" argument does not work, because for Americans, there are no open borders for them nor open markets for them. (This is a perspective not shared by foreigners, who, like it or not, came here from other countries exploiting American mediocrity and who may feel slightly sheepish at displacing the natives.)

A true free market involves reciprocity, a trade between equals. What we have today is a rigged system in which Americans are disfavored in their own country.

The opposition to the Cruz-Sessions bill may be grounded on a misguided and perhaps even inadvertent philosophical foundation. 

First, it tells people that Americans have a duty, except that they don't, to allow and encourage their direct competitors to come in. It is as if Americans must "prove themselves." 

But why? Are Americans uniquely required to prove their merit, in their own country? If so, this is not a reward to Americans. The imposition of a higher standard is not a compliment. It is a penalty.

In addition, no one should be required to prove their worthiness by giving their detractors or potential replacements the tools at which they may meet their own demise. This is the entire point behind the outrage by Disney workers being told to train their replacements. 

And to whom is this standard to be proven? To foreigners? To employers who, to be fair, are entitled to maximize their profit? Again, this reduces to Americans suffering a penalty...for being Americans. This strikes me not as exalting Americans, or America, but rather as exploiting, demeaning and attacking Americans. 

This may be exactly how it feels to the American losers losing their jobs to cheaper foreigners under the current H1B visa system, whether it's articulated properly or not.

Furthermore, as explained above, the playing field is not level. Foreigners who come here, exploit our system, and still lose, are rewarded for their "bite the hand that feeds them" ingratitude: They have the option to go back home.  They risk little or nothing. Their reward-risk ratio is favorable...for them. 

Not so for Americans who "fail" or "lose" on a domestic playing field tilted against them. The fundamental inequality is a preference towards foreigners, and is de facto discrimination against Americans. Their reward-risk ratio is the inverse. But the Cruz-Sessions bill detractors may not care about that -- perhaps because the current system concentrates the rewards among foreign "winners" and socializes the risk and the losses among the domestic American "losers."

To advance this argument, to suggest it is philosophically sound, either argues that Americans are inherently inferior because they are Americans or that Americans must suffer the "luck of the draw" because they are situated here and, well, life is not fair.

Such arguments and motives are the domain of the Gramsci Marxists, the Angry-Left, Hate-America crowd which seek to undermine everything representing American hegemony and indeed Western civilization and capitalism. It should not be part and parcel of the argument or philosophy of those who seek to defend those institutions.



Ted Cruz's Immigration Poison Pill?

Senator Ted Cruz of Texas, a current Republican presidential nomination frontrunner, has a comprehensive immigration reform plan which opposes amnesty and also calls for an end to birthright citizenship.

Ending birthright citizenship poses some interesting, far-reaching and perhaps unforeseen problems, as I pointed out way back in 2010.

Could these problems be part of a Cruz silent-missile (get it? Cruz missile? heh heh) to attack more Washington DC federal bureaucracy? Could the "solution" be a "poison pill" type maneuver, designed really to dissuade the stated object and instead to effect other reforms as part of a negotiating tactic? What do you think?




Thursday, December 17, 2015

Neocons on ISIS, and America's Age of Atonement

Much of advocacy is knowing what values and emotional triggers underlie what is being said. This is sometimes called the unsaid message.

The same is true in what passes for politics -- or theater -- these days. (See this author on presidential puppetry; highly recommended.) 

But what happens when someone you might think (incorrectly?) is an ally, actually lobs a strong moral judgment against you?

Paul Mulshine's NJ.com column appropriately hits on the flaws in "neocon" ideology as most recently and tragically expressed by John Podhoretz. Now, in many quarters, Podhoretz is considered a conservative, a Republican, whatever. But Podhoretz attacks those who raise questions about American intervention in the Mideast, including questions about the method if not the ultimate target.  

And in so doing, Podhoretz actually raises very troubling implications about America's basic role in the universe, and Americans' basic duty, which are indistinguishable from the Marxist world view of "blame Americans first." 

As you'll see in Mulshine's article which links to Podhoretz's New York Post piece, Podhoretz calls the non-interventionists (e.g., Ted Cruz, Rand Paul, even Donald Trump) "repugnant" for simply failing to endorse full-blown war on the ground against a somewhat amorphous enemy in ISIS (also known as ISIL).

This is not merely an error in judgment. It is to use a dog whistle to chide "conservatives" while signaling to the "far left" that there is a shared disdain and moral disapproval of America in its essence, and really of its common people.

You see, Podhoretz has hidden messages. These are the messages which one might not understand, or be able to verbalize. Yet they are the messages that are felt. Physically. This is where and how psychologists and therapists make their money.

The core, unsaid message: Americans have a duty -- an obligation -- to rescue the rest of the world. That is often referred to as American exceptionalism, a term which actually has Marxist origins and is idiotically used by Republicans trying to compliment America. 

But saying Americans must sacrifice their safety, their children's lives, in a war to protect, well, exactly on whose behalf are we fighting now? -- that is not a compliment.

It is a mandate. And it has the same effect as a punishment. That is, Americans must be punished for being in a great country, for having a reasonably free economy, for having a Constitution, for the essence of what they are...you get the picture.

This is an emotional trigger that is no different from an attack, a racial epithet, indeed, directed at a target solely because of the immutable characteristics of his being (e.g., race, height, disability, etc.). Ergo, you are inherently bad because you are an American.  

Or irredeemable. Beyond redemption. What the Orthodox Jews call amalek.

When you decode the message, you see the essence of this name-calling is an absolute disdain for the basic humanity of fellow American citizens. 

It is no different from the core Marxist disdain for achievement and self-esteem, hidden of course under the cloak of human rights and rhetoric exalting the common people too uneducated -- or exhausted -- to know better.

When the neocons call for American intervention, they are calling for average Americans to sacrifice their lives. Because to them, the average American is nothing more than cannon fodder.

Might that explain the Republican Establishment refusal to engage the growing Marxist philosophies infecting and now dominating the Democratic Party, Washington DC and many opinion leaders in big business, the news media and the entertainment and legal industries? 

Because, in fact, on an emotional and hence a visceral basis, the Republican and Marxist establishments share the same core view of Americans -- the "99%"?

This is why the "neocon" message can be decoded and explained very simply to average Americans -- your average jury, that is. And this is where there is political opportunity and also the opportunity for tragedy.
 

Wednesday, December 16, 2015

Bridgegate Revisited: Federal Judge Slams Gibson Dunn For Not Taking Notes

The official law firm for the Office of the Governor of New Jersey was sharply criticized by a New Jersey federal judge today for not taking notes during its many interviews of witnesses in the "Bridgegate" scandal which has led to one guilty plea and two indictments thus far. 

Press coverage tonight is here from the Star-Ledger and the Record of Hackensack.  

Compare the judge's points with my own critique of the report is given in this April 2014 article

It seems the "hide the ball" strategy is consistent with some federal prosecutors' practice of refusing to tape record witness or target interviews -- because that tape would be evidence, and would prevent agents from using their subjective notes as the only evidence of what an interviewee said (allegedly) at any meeting with government agents. I addressed this danger in this May 2014 article. While the FBI is making progress in moving towards a policy of routinely recording interviews where such recording is beneficial to the interviewee, the agency's inclination to hide exculpatory evidence remains.

As such, the threats to the liberty of innocent Americans remain. 


Wednesday, December 2, 2015

Litigation Financing: A Discussion

Some interesting insights into the world, practice and potential ethical pitfalls of litigation financing from this Above The Law post from fellow Yale Law alum David Lat. 

Tuesday, December 1, 2015

How Mark Zuckerberg's 99% Giveaway Is 100% Wrong

The announcement by Mark Zuckerberg -- the founder of the social medium Facebook -- that he and his wife will give away 99% of their company shares to a charity -- has inadvertently sent several unintended and very negative messages. I can think of five.

And none of them are good.

First, he has signified to his and his wife's newborn daughter that she comes second, that at a certain point she has "enough" and that a whole bunch of strangers come ahead of her. Their daughter does not display one ounce of selfishness or materialism if later she questions this decision. Worse, should she encounter unexpected privation, she will be fully entitled to blame her parents' adulation-seeking. The bottom line is that she, and any future siblings, are her parents' primary responsibility. Not some smug strangers.

Second, and worse, he told this to the world, when it's really none of our business, but by doing so he robbed his daughter of her privacy. This point is emphasized by its brevity. This is purely, simply shocking to the conscience. 

Third, he is also signaling to Facebook shareholders that he doesn't believe very strongly in Facebook's current share price. It's hard to spin giving 99% --- or even a far less amount -- of something away as signifying your confidence in the stock. 

Fourth, Zuckerberg is showing that he cares more about chasing and receiving the moral approval of others, more than fulfilling his real duties which are to his family, and secondly to his shareholders. This giveaway is not a virtue. The giveaway is a quick play for applause, from a segment of the opinion leaders who insist on being the gatekeepers to public acclaim, and disdain any achievement which circumvents their traditional role. As for Zuckerberg, his act is selfishness. Worse, it is public. This is narcissism. Call me old-fashioned, call me an iconoclast, call me far worse, but I believe the purest motives are the ones kept hidden. Doing good and looking good are two far different objectives. 

Finally, the fifth unintended message: He is signaling, especially to his envious detractors, that he either is not confident that he has "earned" his wealth, his achievement, or that he can be bullied by his inferiors -- his lessers in every regard -- into paying the protection money racket and giving it away in exchange for avoiding vicious (if entirely unearned) criticism.

His giveaway is totally wrong.

Monday, November 30, 2015

Envy As The Enemy of Conservativism

This article explores the meaning of the adjective "conservative" as it is used to describe people.

While "conservative" is most often used as an adjective to modify a noun in a political / partisan context, it is more appropriately used as a philosophical modifier to describe one's larger values and perspective on life. 

Those values, it seems, are so much more than a mere reduction into narrow, partisan political categories.

It seems that one prime characteristic of the conservative is the principle of respect. By this, I mean a respect, in many regards, and for many other people, principles and beliefs. 

That respect often has a common denominator far from the least. It is a respect for the effort of others -- and the character which that effort demonstrates.

Effort is independent from the concepts of achievement, success or sacrifice, even though effort is often found in the same mix as these other concepts to produce ultimate achievement. One can achieve without being successful; think of the marathon runner who achieves a particular goal (a targeted time or pace) without winning. One may be successful without sacrifice, such as through the receipt of luck like the game-show contestant or lottery ticket winner. Yet it is exceedingly rare to achieve success without either sacrifice or effort, and it is even rarer still for sacrifice not to involve a degree of considerable effort (such as the effort to exercise the discipline to withstand and overcome privation or deprivation).  Hence, effort should be held preeminent as a value. 

Now, effort is no guarantee of success. It is not even predictive of success. Yet the absence of effort is largely predictive, if not of failure, then of one's failure to fulfill one's potential -- what might be called one's potential to achieve. 

Ability is a strong driver towards achievement. Yet many disciplines are full of people with ability. But who are the ones to "make it"? Thus, while ability is most often found prior to achievement, and ability may be an almost-necessary precursor to achievement, it is just not a sufficient precursor; something else is needed. That difference-making element is effort.

I contend that when we write that we respect achievement and success, it is more accurate to write that we respect the effort that led to that achievement. After all, we do not respect one's achievement -- fortune, really -- of holding the winning lottery ticket, an event for which luck is virtually the sole contributor (save for stubborn foolishness deemed as perseverance). 

And while ability and skill contribute to the achievement, those qualities do not illustrate one's personality, one's character traits, in the manner of effort. One may be slothful yet still possess great skill (and the luck and occasional flash of discipline to use it), such that the skill does not speak to character. Yet the reverse is quite different. Mediocre skill combined with great effort can result in great achievement, so much so that one's mediocrity is often (and incorrectly) used as evidence of one's grand character, as if mediocrity itself were a credential and not a mere circumstance or relative handicap.

As such, effort illustrates the character of respecting the traits so often found to produce and foster achievement: discipline, perseverance, dedication, and so on. Therefore, we find ourselves respecting achievement because it serves as the proxy for those traits. 

It follows that conservatives admire and exalt not individual achievement, but rather the traits whose presence so often is necessary to foster the achievement. 

But what of the inverse, the opposite of those traits? How does one view the envy, jealousy and schadenfraude towards those who achieve?

The reasoning outlined here hints at a basic incompatibility. If conservatism at its personal, psychological core exalts the traits that induce and inspire effort, then conservatism must also scorn, dissuade and punish the traits which punish effort. It follows that the emotions of envy and jealousy must be targeted, because those emotions reward non-effort and those who seek to benefit from the effort expended by others. As such, envy induces the redistribution of the fruits of positive behavior away from its possessors (the good actors) and towards its detractors (the bad actors), while localizing, concentrating and restricting the costs of effort to its expenders.

But what is envy -- at its root, at its core, what is it? It is just desiring what another had -- I wish I had that too -- or must it involve the demand to take from another -- I don't only wish I had that, but I must deprive that other person of his achievement, his effort, and keep it away from him?

If envy is really the latter, it supports the inference (really, it requires it) that what another has, his property, his achievements (financial, relationships, etc.), perhaps something totally intangible like self-esteem or confidence, is really rightfully owned by another? And by so doing, envy becomes the antithesis of property rights. It becomes the emotional manifestation of the belief that one person can never claim unfettered, unquestioned possession of his work, his sacrifices or their products, that in fact everything he has is subject to the constant threat of confiscation or destruction, at the hands of another who asserts either greater power (e.g., might makes right) or a moral superiority ad infinitum over the former, lesser person.

Envy rewards those who avoid effort. On that basic level and for that basic reason, envy would appear to be the polar opposite, the mortal enemy, of the effort so often responsible for achievement and the conditions necessary for success. It follows that envy and its associated emotions are incompatible with, and inhospitable to, the positive emotions necessary for effort and therefore for success and achievement in any arena.

Eric Dixon is a New York lawyer, strategist and business advisor. 



Friday, November 27, 2015

Starting Up A Startup

Get real...or get lost. That's what investors and venture capitalists say.

I've consulted with various startups in various industries over the years. Most prospective founders -- who never end up as my clients either for legal services or management services -- are daydreamers. 

They make the mistake of thinking that others will invest their own money, and assume the risk, that the founder himself will not do.

That is the height of stupidity, of arrogance, and of disrespect.

You should have at least $10,000-$25,000 of your own money to invest in your own venture. This is a modest amount and most people can get this amount from credit card balance transfers. This amount is needed to set up the legal structure for a business entity with a separate legal existence, open up a real bank account and have some funds to start development and so on. (This is also why I ask startups for a retainer, because the "real ones" actually come to the meeting with a real check, and leave having written and endorsed a real check.)

Everyone else is either full of nonsense, has no money, or is trying to get advice for free. Someone who claims he or she cannot raise and document having it and contributing it into the business (that is, into a segregated business account) is either a fool or a faker. The investor need not decide which is which; he will simply shake your hand politely, walk away, and toss whatever materials you've given him into the nearest waste basket.

If you cannot obtain and document that you've spent this on your own startup, it is reasonable for a prospective investor, lender or landlord to assume you have no friends who think your venture has potential, you have no money of your own -- which supports the inference that you are an absolute failure, loser or fraud  -- or you're simply too smug to spend your own money first. 

My advice to you is that if you don't have this minimum capital on hand, you (a) have no business starting a business, much less (b) asking for investments from anyone else. In fact, asking others to invest in you, when you are unwilling to invest in yourself, is a sign of disrespect and insults the intelligence of your targets. 

And when you insult the intelligence or integrity of others, you burn credibility and assume a risk of being remembered in the future for all the wrong reasons.

Eric Dixon is a New York-based lawyer and startup manager who has advised numerous young businesses on various matters.


Monday, November 23, 2015

So Lawyers Are The Most Messed-Up?

And in other breaking news, humans breathe a mixture of nitrogen and oxygen. Story at eleven.

There is a somewhat serious report out about the relatively higher prevalence of mental illness, anxiety-related disorders and the like afflicting the legal profession.  As someone with a combined quarter century of experience within the profession, let me decode for you what that means.

First, I write "somewhat serious" because although the issue is serious, the overall message for the general public -- ergo, the customers, that being, many of you as readers -- is what is really important. And that angle is totally ignored!

Second, let's understand something. Customers and clients are looking for solutions. Most often, people want a particular result. Who are we kidding? People want a certain outcome, and the smarter customers realize that they are going through a process involving an opponent, and are trying to achieve the best possible outcome in light of that opposition. It's because of those characteristics that the legal profession can be stressful. 

You see, the legal profession is all about managing an adversarial, contentious process whereby people are trying to assert, or defend, their rights, whether those rights are their civil rights, constitutional rights, privacy rights or property rights. (Most disputes involve those four. You undoubtedly will name others.)

The nature of the business of lawyers, the settlement of disputes, is not pleasant. Most people hate, and in fact cannot, handle their disputes. That's why lawyers are hired. Lawyers are the unarmored gladiators, the mercenaries for hire. 

In short, lawyers get paid to do what most people cannot or will not do for themselves. It can be unpleasant work,  grueling, tiring and exhausting -- and that's when you win. 

As for reputation and status, that is the thinking of the 1980s. It is questionable whether lawyers (or accountants) have the same professional patina they may have enjoyed a generation or two ago. There are undoubtedly those who are in the industry because of its perceived (or so they think) status, and likewise, countless others who despise lawyers for that status. All of that thinking is at least 20-30 years behind the times.

There are some red flags identified in the report. It identifies the prevalence of workplace bullies, the hegemony of white men in the "big firm" ownership structure, and so on. The bully problem is endemic in Western post-industrial society, as bad characters find increasingly fewer outlets for socially-acceptable aggression (or other traits) and therefore resort to exercising these emotions in arenas where there is less resistance.

Are there bullies and bad bosses? Absolutely. Are they more prevalent in the legal profession that in the general population? Not sure. 

Should customers care? No.  Not at all. Unless the bad behavior affects the work product and/or inflates the inefficiencies that get reflected in a higher bill -- which goes to the issue of whether a big organization, a big law firm, is the right solution provider for the customer.

Customers look for solutions, not for some sort of social reordering. Bad bosses are not the customer's problem, they are the employee's problem. But today's employee may be tomorrow's entrepreneur. 

And for every bad boss, for every bad co-worker, there is a corresponding business opportunity for a classy, competent and professional lawyer to capture business or capture that cubicle or windowed office. 

Competence and class still matter. 

What do you think? 


Wednesday, November 18, 2015

When Free Speech, Isn't Free: How Forced Political Speech Subverts Freedom

You have the right to speech and expression.  Free speech and expression.

You also have the right not to speak -- sometimes a much more powerful statement is made with silence.

But what happens when your money is used, without your consent, to fund political campaigns?

And isn't your voice -- including your expression through deliberate non-participation -- diluted or silenced when you are compelled to speak (with your money) even when you don't want to?

There's a new Seattle, WA plan to give each voter $100 in vouchers (four vouchers in $25 denominations) which can be given out to select qualifying candidates for city offices, who can then redeem the vouchers for real cash for their campaigns. The money for these vouchers comes from tax receipts. 

New York City has had a similar plan for years, whereby it gives candidates for city office up to six times the amount of qualifying contributions. The difference in New York City is that the "matching funds" go straight to the candidate. 

This raises the question of whether the public is being forced to engage in political speech, because it is forced to fund it. And a system which issues vouchers is designed to encourage people to "spend" the vouchers, meaning to underwrite candidates to whom they would very likely not give a dollar of their own money.

The movement towards compelled political speech is in line with the cries, from self-styled good-government groups over the years, to address declining voter participation rates. Those rates have declined, largely because the denominator -- the number of people registered -- has increased as it has become increasingly easy to register. (Some would argue that it is way too easy, that it is an invitation to fraud, etc.)  Yet the constant is the numerator, the top number, representing people actually interested in civic affairs and motivated to vote pretty much on their own.

Some good-government groups are run by people who make a decent living creating and then publicizing the problem of "low voter participation" as a way to raise funds for their pet non-profits. (Hey! Who said there wasn't money in politics?!) But that should not be confused with the existence of a real problem, or the absence of one.

Some candidates will complain. But these will be the voices of unearned and frustrated ambition, complaining because government won't clear the path for them to realize -- with as little opposition as possible -- the outcome (i.e., winning) to which they believe they are entitled.

To them, I argue: You have the right to run for office, but not the right to take our money to do so, nor do you have the right to rig the system so you can do the second in order to achieve the first.

And the gentle inducements, meant to play on the guilt which is becoming so common in Western society today, and its associated, manufactured need to receive the approval of others (in turn inducing a mania of efforts to seek and "earn" it), all point to forced speech, forced expression, amounting to squeezing money out of us like toothpaste from the tube, to further the desired outcomes for a few self-promoters. 

When you are compelled to speak because you are paying for it, and the government is trying to induce you (the gentle form, feeling like persuasion when it is really a gentle-feeling form of coercion) to participate by making you feel that your own tax dollars will be wasted - because waste is a bad thing, didn't you know -- if you don't "speak" and use those special-purpose vouchers, is that free speech?

If you're a Seattle taxpayer, aren't you being forced to speak? Aren't you being forced -- er, persuaded -- to give money to some candidate? And worse, it's probably a candidate who cannot or will not work hard enough to raise funds on his own -- that is, the candidate is probably someone with little to no support from neighbors, friends, and thus really has no business running for an elected public office?

And a graver question is this: Isn't your voice diluted when we increase the number of participating voters, and candidates, through this soft form of compulsion?

It's bad enough to drown out the voices and votes of the concerned, self-motivated voters with the voices of the unconcerned, the irresponsible and, in some cases, the outright corrupt who will buy and sell their vouchers. 

That's voter dilution. And that is the antithesis of the First Amendment protections against government encroachment on what the Supreme Court itself has often called a "core constitutional right."

Saturday, November 14, 2015

Injustice: When Sleeping Jurors Cost You Your Liberty

Trials are always a risk. Somewhat with a judge without a jury, in what is called a "bench trial." But much more with our "peers" -- that is, juries.

Juries make decisions as to guilt or innocence, and in some civil trials they determine not only whether someone is liable for a damage, but also the amount of liability and the defendant's share of liability (what in negligence cases is called "contributory negligence.")

There is, however, little to no quality control on jurors.

There is the jury selection process and a certain number of challenges you can use to strike (remove) potential jurors in the jury pool.  

But once selected, you're at the mercy of the selected jurors and you can only hope that juror misconduct is noticed, brought before the judge's attention and acted upon by that judge. 

This high-profile New York City corruption case has drawn reporters who are noticing some jurors sleeping and doodling.

Now, many of these cases are in fact boring from minute to minute. I sat in on part of one riveting criminal case for a time, and while there were brief and very interesting revelations, there were other parts that were excruciatingly boring.  Judges who are bright recognize this, and rarely hold a jury in the courtroom for longer than an hour at a time. (Another reason: bathroom breaks.)

I remember that particular trial, because there were enough interesting exchanges that the attentive reporter sitting next to me and I conferred and said to each other, essentially, "there's no way this guy gets convicted."  (Postscript: You know where this is going. The defendants got convicted and sentenced to eleven and five years, respectively. The reporter friend and I still wonder, years later, what trial the jury was watching.)

Now, there is one "check" on juror misconduct. A judge can always nullify (or put aside) a jury verdict of guilty (but note, not the reverse; if twelve Sleeping Beauties find you not guilty, then you're not guilty, no matter if you have two blood-stained hands, a smoking gun and a videotaped confession). 

As for the Sheldon Silver trial, once you put aside the salacious corruption details and the class envy which is being exploited, there are many other factors that would worry someone who is in fact innocent, or his lawyer. (Author's note: The Silver trial involves very serious allegations and what seems to be very formidable evidence. Nothing here should be read or implied to be defending Silver or criticizing the decision to prosecute him, and is based merely on press reports.)

The nature of any defendant today -- you're a business owner, you're a rich guy, you're a lawyer or, never mind the trial, just throw away the key, you're an elected public official -- means jurors who survive the voir dire (juror weeding out selection process) are often quite judgmental starting the trial, or fairly ignorant and ill-informed people. 

And those judgments can often mean an entirely innocent person enters the courtroom guilty on arrival.

The best advice? Stay out of trouble. Anything else becomes a crapshoot with increasingly difficult odds, and the odds are against you.

Eric Dixon is a New York investigative lawyer. 



Friday, October 30, 2015

My Choice: Ted Cruz 2016.

Senator Ted Cruz has a combination of superior academic intelligence, emotional intelligence (what Rush might call, "grace under pressure"), judgment (a different skill set altogether) and integrity.

He is my preference and choice for the 2016 Republican presidential nomination.

As one of the very few conservative-libertarian lawyers in the New York City metropolitan area, I urge my readers, clients, fellow activists and colleagues in the various industries I engage in (like the legal industry and blockchain technology industry) to strongly consider supporting Ted Cruz with their votes, their energy and, yes, their money.

Money counts in American elections. Here is a secure link for you to make a donation right now.

Saturday, October 17, 2015

Bitcoin Regulation in New York and Elsewhere

Some thoughts on the recently-enacted "Bitlicense" in New York State. These comments are applicable to other jurisdictions. 

https://www.youtube.com/watch?v=zt3CwPrvqoc


Sunday, October 11, 2015

Real Clear Voting: A Real Electronic Voting Solution

Do you want your vote to count?

Do you want your vote safe from the prying eyes -- and hands -- of corrupt election officials, political hacks and other miscreants?

If you're thinking that "electronic voting machines" were the solution, think again.

The blockchain voting apparatus is your solution for safe, secure and anonymous voting where every vote counts.

UPDATE October 2016: A patent application for this voting system, for which I am a co-inventor, has been approved for allowance by the United States Patent and Trademark Office and the patent should be granted by the end of calendar year 2016.

You've been told that electronic voting machines were supposed to stop political corruption, election fraud and hanging chads.

Think again.

The typical electronic voting machine is merely an electronic version of the old, manual (and highly reliable) switch/lever voting booth.  The electronic machine offers one improvement on the manual booth: it produces a record of each vote. But that's it. And even that feature has some huge risks.

The reason? Both the electronic and manual machines are utterly dependent on people to maintain them...and most dangerously, to retrieve and report their vote tallies. The current machines and systems require that we trust people to get their jobs right, to do their jobs, to pay attention, to be honest.

It is that human involvement which is the serious drawback -- no, the fatal flaw -- in electronic voting.  And really, do you trust election officials to get all those factors right?

You've been told that electronic voting is the cure-all. That's because no one wants to point the blame where it belongs.

Dishonest election officials. 

Avoiding real accountability requires the creation of a straw scapegoat to blame. Here, it's the machine. 

But a blockchain-based apparatus removes the role of people. It moves the collection of votes to a decentralized system totally removed and independent from an individual machine. It removes people from any involvement in the counting of votes, because the tallying occurs on a public ledger called the blockchain. 

One feature of blockchain technology: Every component block carries a record of the preceding blocks in the chain. This forms a historical record. With voting, it means there is a constant record of the running count. This forms a strong protection: To change the count, to affect the tally, one would have to change not only the targeted block, but also every other block which followed the targeted block. This is nearly impossible as well as impractical.  

The reason is that the blockchain works on a consensus among participating computers that requires those computers to solve a complex mathematical algorithm. This provides an element of security totally new and totally absent from the so-called "secure" electronic machines you were promised would solve election fraud.

The reason why this security exists is the absence of people from the process. People cannot affect the process. The process is controlled entirely by the network participants, each acting independently (hence the "decentralized" nature) to reach the mathematical consensus.

It is this people-free process which offers the impartiality that is critical in any election.

Eric Dixon is a New York-based attorney and the co-inventor of a patent-pending, blockchain-based voting system. Send him a message to inquire further about the uses of blockchain. 

Friday, September 25, 2015

Boehner Special Election: What Election Law Requires

Breaking: John Boehner, Speaker of the House, to resign effective end of October.

An open seat is to be filled in accordance with state law. Ohio's election law requires the Governor to issue a writ (or order) of election to direct a special election "when a vacancy...occurs." (See Ohio Rev. Code 3521.03). But the law does not require this be performed within a specified time frame.

This means observers will have to wait until Boehner officially vacates his seat for the process to begin, and for the Governor -- who is current presidential candidate John Kasich --to exercise his discretion.

Friday, September 18, 2015

Bitcoin Is A Commodity? How Digital Currency Will Be Treated

The question of how to define Bitcoin has troubled its inventors, developers and certainly regulators and lawyers. Here's the latest conclusion. Don't be surprised, but regulators who regulate commodities have opined that Bitcoin and other "digital currencies" are, in fact, commodities.

What a surprise!

Here is an interesting administrative ruling from the Commodity Futures Trading Commission just issued Thursday, September 17th.  An online exchange of Bitcoin options contracts is now subject to registration and regulation as a swap execution facility and designated contract market under the Commodity Exchange Act.

Buried in a footnote of the CFTC ruling is a definition of bitcoin as a "digital representation of value that functions as a medium of exchange, a unit of account and/or a store of value." 

In regular font, the CFTC ruled that bitcoin was a commodity, relying on the expansive definition of the term in a 7th Circuit Court of Appeals case "all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in." As such, the ruling means, at least for the moment, that bitcoin exchanges are subject to registration requirements of and regulation as commodity swap exchanges.

However, unlike some industry observers and legal experts, I believe that Bitcoin may also be defined by regulators as a security, and that Bitcoin may simultaneously be considered a security and commodity. The basis for this opinion is the likewise broad definition of "security" derived from the four-part test from the seminal security-definition case from the United States Supreme Court, United States v. W.J. Howey. The so-called Howey test found that "investment contracts" were any "contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party."

In this commenter's view, one regulator's treatment of Bitcoin as a commodity does not mean, and surely does not preclude, any other regulator (or court) from determining that Bitcoin is also a security. The definition of commodity is broad, but so is the definition of security. So Bitcoin can be both a commodity and a security -- the terms are not mutually exclusive.

Among the first official attempts to define the nature of digital currency was the first introduced congressional bill on Bitcoin (H.R. 5777, 113th Cong., 2d. session, introduced by now-former Rep. Steve Stockman (R-TX) (and drafted entirely by yours truly!) sought to achieve "cryptocurrency protocol protection" from unfavorable and unfair tax treatment by having "virtual currency" be treated for tax purposes as currency, instead of property. The bill held that Bitcoin and other altcoins could be illiquid and hard to value, factors making its treatment as property as proposed by the IRS in its 2014 guidance (referenced in the congressional bill, and which helped prompt the bill's conception) unfair because its "basis" for calculating taxable value could end up increasing taxable value well over Bitcoin's real value which arguably should be discounted on account of both volatility and illiquidity. 

More to come on this issue....

Eric Dixon is a New York lawyer who works extensively with blockchain and cryptocurrency innovators and startups.


Saturday, September 5, 2015

Matt Harvey, Negotiating And Leverage

Matt Harvey? Or Machiavelli Matt Harvey?

The emerging controversy over the star New York Mets baseball pitcher Matt Harvey demonstrates lessons valuable for those of us who negotiate, investigate or resolve disputes for a living. 

The controversy involves (for those of you who do not follow baseball), on the surface level, the health of a star pitcher continuing to perform, some 23 months after the "Tommy John" ligament replacement surgery on his right elbow, as he approaches a rather arbitrary number of 180 innings pitched.  The number of innings pitched, over a six-month period, is assumed to be a proxy for the point beyond which Harvey's risk of injury is unacceptable to Harvey. (The reason for why that is unacceptable, the risk versus future-financial-reward for Harvey, is quite relevant for different issues which I detail later.)

The real controversy involves stuff below the surface.

What is that, you ask?

Here's one. The team, the New York Mets -- and for what it's worth, all of their fans -- want to be able to have certainty about the availability of their pitcher, Harvey, for the season's "stretch run" and the playoffs for however long the Mets compete in them should they qualify. The frustration is not borne by fear, fear of not having a star pitcher available for the playoffs, for example, but rather out of an exasperation that after nearly two years of constant monitoring and coddling precisely to ensure Harvey's optimal performance at precisely this time, the pitcher himself is about to pull the plug on his season.

The player's attitude stands in stark contrast to that of some of his teammates, of whom one cried during a game after learning he was about to be traded. 

At this writing, it is highly uncertain that Harvey will choose to pitch in the 2015 playoffs unless he is held out of the rest of the regular season.

Going back to certainty, because its presence or absence is the element needed for the baseball team to be able to plan using its other resources (players) for the rest of the baseball season: Harvey's statements, both directly to the media and earlier, through his agent Scott Boras, have diminished that certainty in the immediate future -- the rest of the 2015 season. But they have also reduced that certainty for the future, perhaps for the rest of Harvey's career.

Why? Because raising this issue now, after the planning and caution I referenced earlier, is a strong indication that the pitcher's "story" has changed, or his priorities are now surfacing. 

Those of us who resolve disputes for a living welcome this development, because it is an information breakthrough. It may frustrate clients, but it is always helpful to know your adversary's real intentions. That is how you come to an agreement, that is where you find the middle ground.

SO WHAT IS HARVEY'S MISTAKE HERE 

This is where the pitcher, Matt Harvey, gets a clear E-1. Error on the pitcher.

It's the second point to take away from this story was alluded to earlier. The inability to plan, and especially after the monitoring and attempts at cooperation, leads to two theories (not conclusions). First, the Mets now know there is no ability to plan with or around Harvey...not this year, not for the future...and secondly, that is so because his honesty, his forthrightness, is now and must now (plus the future) be suspect. 

It is painfully obvious and the conclusion is inescapable that Harvey could have expressed this concern earlier, his concern about approaching the arbitrary 180 innings limit, just so the Mets could have reduced his workload, and accommodated Harvey.

Matt Harvey is not a young man anymore. He is 26, not 18. He could and should have been more forthright about his concerns much earlier, because that would have allowed his team to plan accordingly.

Matt Harvey denied his team, his employer, that opportunity to plan, and by doing so, he has comprised -- if not willingly damaged -- his team's ability to win. Read that again: that is a serious charge, but the behavior and implicit messages from Harvey (or his agent Scott Boras) warrant it.

Why he did it is actually irrelevant. Here's why. The cover story is health. But that is the front put up, the position concocted to knock down criticism -- how can you make me pitch when I'm concerned about injury? Just know it's a rhetorical trick. Many skilled judges and lawyers see through it (almost no jurors do, however). 

If Matt Harvey were a witness in court, he would now be considered damaged goods, someone whose credibility would be suspect. He might make a bad witness, might not even make it to the witness stand. 

So what is this really all about?

This is a negotiating ploy by Harvey's agent Scott Boras. Harvey wants a contract, wants more money, and feels he has proven his value. His recent performance indicates he is a top-level pitcher, so it is possible or arguable that he has nothing more to prove and hence has maximized his value and leverage right now, by throwing out the 180-inning bar as the excuse to take no more risk of injury if he is not compensated. And all this is within their rights. Boras also wants to maximize value for Matt Harvey. The Mets franchise, the fans, are irrelevant. 

Now, value maximization means the most dollars. 

Here's how this is going to unfold.

Any controversy which weakens the bond implicit between player and team -- and especially when the player is a once-in-a-generation star like Harvey -- is assumed to be an opportunity to be exploited. That means that it is assumed it can be patched up, and that means patched up with a lot of money. 

If my theory is correct, this controversy becomes very intentional, very much by design.

It also tells the New York Mets franchise and their fan base that Matt Harvey does not care about the team winning. That is the conclusion supported by the fact of Harvey not expressing his current "concern" earlier, much earlier, or at any point in the season, when the concern could have been accommodated in a way mutually beneficial to the team and player.

Instead, the Matt Harvey strategy is to deliberately weaken his employer, the team, in order to exploit a crisis. And to be sure, the attack from within would not only involve his playing or not playing. These actions require a response from the team, against which every other player will measure how they are treated. This is how corporate morale, team morale, can be affected and even destroyed by special treatment, by special privileges and by the allowance of double standards.

Matt Harvey has a contract. Yet the suggestion by his agent Boras -- as to whom observers are entitled to assume speaks with the authority and permission of Harvey -- is that Harvey will withhold his services, not directly refusing but rather by using a hard-to-argue-with fear of injury excuse. But his prior history, his own prior statements, raise serious credibility questions that are value-damaging, credibility-damaging, relationship-damaging and constitute breaches of duty.

In business, in corporate America, a star employee often has an employment contract requiring duties such as the duties of care, of candor and of loyalty.  Harvey would be considered to be jeopardizing himself, at least his reputation, by giving support to claims that his words and actions are breaching them. And he is not a free agent, he is not without a contract in spring training or training camp, for example.

Others would use stronger terms, stronger words and stronger consequences. Diplomats and prosecutors have words to describe this: Sabotage. And treason. And...felony.




Friday, September 4, 2015

Tourist Trap Alert: New York City Using Bathroom Scam At Staten Island Ferry Terminal?

videoWho says the socialists don't know capitalism?

It seems the New York City Department of Transportation might be pulling a fast one of three card monte on hapless tourists taking a round trip ride on the Staten Island Ferry.

The video below (click the link) shows that each of the restrooms in the ferry terminal on the Staten Island side are closed.

Weak August Jobs Data: How To Read The Numbers

Legal cases and investigative jobs tend to heavily use and depend on statistical analysis. The closest many people get to this analysis is reliance on government data, so let's look at this morning's just released jobs data from the Bureau of Labor Statistics.

Look at summary chart A first. This is summary information and is seasonally adjusted (meaning the government does not have the excuse of seasonal fluctuations yet, as with all data, reserves the right to correct the data later. This is very common.)

I advise people to look at any percentages by looking at the denominator. Employment statistics including the headline "unemployment rate" (of which the main rate reported by everyone is the "U-3" rate, and is down to 5.1%) involves the numerator (the top number in the fraction), but the denominator determines what the percentage is. The easiest way to affect the quotient (the result), to get the percentage you want, is to affect the calculation of the bottom number (denominator).  And what is the denominator? It's the labor force!  Reduce the labor force number, and you can get a lower unemployment rate, even when real employment may be declining (that is a separate issue entirely involving hours, wages and so on -- that gets to real income.) simply because the labor force denominator is getting smaller, either in real terms or in relative terms (such as when it grows less than the numerator).

Go eight lines down to the line item "Not in labor force."  Then look to your right for the first column (August 2014) and the next to last column (August 2015). Comparing these two columns' data will show a year over year change so you are getting the truest (we think) comparison whereas month to month comparisons (i.e., August 2015 versus July 2015) are always prone to seasonal fluctuations.

You'll see that the 12-month change (August 2015 vs. August 2014) shows the people not in the labor force is about two million greater than this time last year.

Then go to "civilian labor force" which is the second line. Look at the columns again. The increase year over year is barely one million.

This means the growth, seasonally adjusted, of the population not in the labor force is about double what the growth of the labor force is.


Sunday, August 30, 2015

Blockchain Technology: Media Late To The Party

Talk about being behind the curve.

This recent New York Times article on how major financial institutions are exploring the technology underlying Bitcoin -- what's called blockchain technology -- is following the recent trend in the past few weeks of the financial media looking into the growing attention at a technology whose applications could change the way these institutions do business and how they keep their profit centers and margins. 

This may be the latest in a series of signs that while Bitcoin-as-currency stays relatively stable in a $220-260 price range, where it's been for about ten months now, the real value may lie in the technology and its uses. 

The article explores what the institutions are revealing as to what they're doing.

The real value and the real activity may be behind the scenes and avoiding both leaks to the news media and inquiries from either the media or competitors.

Eric Dixon is a New York lawyer who works extensively with blockchain and cryptocurrency innovators and startups.

Friday, August 21, 2015

Ashley Madison, Bitcoin And The Blockchain Of Evidence

In an emerging story that shows the perils of being too clever by half, it seems some accountholders at the notorious hookup-on-the-side website Ashley Madison are being given a choice: Pay us in bitcoin, or face being outed as a user -- and implicitly, an adulterer -- of the site.

Aside from the threat to its recipient, bitcoin is giving its naysayers another reason to hate its existence. Yet this threat shows the promise of the blockchain technology which underlies bitcoin, and which arguably holds more value than that of bitcoin-as-medium-of-exchange.

The threat also helps illustrate the myth of anonymity.

Some bitcoin users believe that bitcoin is untraceable and therefore the perfect medium to engage in crime without the crime or its proceeds being traced. The professional bitcoin opponents who wish to monopolize the technology (by driving out others with claims of illegitimacy) adopt and repeat this argument for the nefarious and strategically competitive reasons. This does not make sense, however. Cash works just fine for that purpose -- go ask any veteran merchant in the illicit goods or service of your choosing. (Tip: Don't talk to anyone with the "street cred" of a criminal record. These are the idiots who get caught. I'll explain, keep reading. Go to the ones without a criminal record. They're the smart ones.)

The essence of bitcoin is the blockchain. That is a chain where each transaction can be stored in a block, and the blocks are arranged in a sequential, one-dimensional chain that grows in a linear fashion. But here's the key: The hash which comprises part of the "DNA" of each block contains a record of each and every preceding transaction. 

That means there's a record, a "footprint" or "fingerprint," of prior activity. That's evidence. That's a chain of evidence. And given the nature of bitcoin as a medium of exchange where transactions are verified (so there's no double-spending of a bitcoin) on a distributed public ledger relying on consensus among all participating network members (represented by individual computer nodes) to vote on the legitimacy of a transaction, you have a systemic protection against hacking, corruption or other malfeasance that can occur in any centralized system where information can be corrupted once anyone with access either gets in, or decides to go rogue.

This "trust issue" is both the core of the bitcoin solution (and the main tenet behind the blockchain technology's promise) 

I've had prosecutors and investigators ask me -- in all seriousness -- about bitcoin's anonymity, and they've literally not been joking; they've believed the myth of bitcoin's anonymity and bought into the lie that bitcoin is a criminal tool. 

The exact opposite is true. Bitcoin's blockchain basis gives you a historical, sequential record. That is a chain of evidence. 

Now, how good is that chain? There are limitations in any human system. But at a minimum you can trace the beginning transaction (the holdup of the schmuck with an Ashley Madison account) and the liquidating transaction (the getaway) and that gives investigators a good lead. No system is perfect, and I won't inadvertently help prospective criminals by revealing the holes in any human-based system. But here is one principle to hold constant: Any human-based system can be flawed, either in its design or in its implementation. Why? Because humans are imperfect, they make mistakes, and they are also susceptible to all sorts of impulses, temptations and distractions which compromise performance. 

So the entire issue of trust is based on one or more of a set of assumptions, in which one incorrect assumption, error, mistake or accident results in a "breakdown" where something goes awry. Trust makes you more vulnerable to human nature. Computer software makes you equally vulnerable; worse, its centralized design means that anyone with control over the information flow can corrupt your output.

Think about that the very next time you do a Google search, or make any transaction over the Internet.

Other Applications Of Blockchain Technology:  Here's one. See this article from June 2014. 

About the author: Eric Dixon is a veteran New York corporate lawyer, investigator and strategic consultant to businesses, individuals, elected officials and several emerging bitcoin and blockchain industry companies. Mr. Dixon is the author of the first bitcoin protection bill to be submitted to the United States Congress. Mr. Dixon is the co-inventor to multiple blockchain-related systems which are the subject of patents pending before the United States Patent and Trademark Office. He can be reached at EDixon@NYBusinessCounsel.com.


Wednesday, July 8, 2015

Moving The Docs?: Bridgegate Report Vanishes

Are Chris Christie's lawyers running Bridgegate interference on opposition researchers and the news media, now that:
       (a) he's running for President, and
       (b) one of his appointees (David Wildstein) has pleaded guilty to a connected felony and two others (Bridget Kelly, Bill Baroni) were indicted in May of this year?

The special website established by Gibson, Dunn & Crutcher in March 2014 to contain all of its Bridgegate-related investigative reports, exhibits, appendices and updates has apparently been taken down.
Don't fear. Here's a different link to the report. (WSJ) But the updates and appendices are not there. There's a lot of stuff not there, when you really sift through everything.  The errors and omissions in the report were roundly criticized by a few legal analysts including myself
And more... Here are the firm's memoranda summarizing all the interviews of numerous Christie Administration personnel. These are not the actual notes, however. 
Gibson, Dunn, you may recall, is the major international law firm which officially represents The Office of the Governor of the State of New Jersey. The Governor, Chris Christie, is now running for President.  Gibson, Dunn has billed the State of New Jersey -- i.e., the taxpayers -- at least $6.5 million and some reports peg the accumulated amount now in excess of $8 million. This amount was largely to produce its main Bridgegate report, issued in March 2014. 







Monday, July 6, 2015

Investigating The Port Authority

Behind the scenes of the various investigations into the Port Authority of New York and New Jersey, certain appointees to the PANYNJ by Governors Cuomo of New York and Christie of New Jersey, and perhaps even cabinet officials of the Governors and the Governors themselves, is the possibility that various investigations by various agencies may be looking at a curious $2.875 million grant by the PANYNJ to a New Jersey city which has no apparent connection to the PANYNJ, its facilities or to the port (it has no access to any harbor or river).

The current investigations are reportedly looking into possible fraud -- possible criminal fraud -- in connection with sales of more than $1 billion in bonds by the PANYNJ. More than one year ago, I speculated on the extensive criminal penalties that could be in store for participants in the fraud. 

Some of my work back in 2012 for a client got the attention of the local media back then, and has been remembered by some of those reporters. That work is the genesis behind this Sunday report.

If you scroll down to the comments section you will see a reference to a different press report which has video of a press conference I did in early December 2012. 

This is the product of my investigative analyses and illustrates what I bring to the table.


Thursday, July 2, 2015

After Obergefell: Can You Be Forced To Marry?

This recent Supreme Court case may illustrate the prime characteristic of bad law: unintended consequences that can really go haywire.

The headline value of the Obergefell v. Hodges decision issued June 26th is that same sex couples may get married in any state and be recognized as a legal married unit.

But what exactly is a right to marriage?  And what is a "right"?

The classic meaning of a right is something which is inherent in one's existence and - and this is crucial - imposes no burden or duty on another.  

That means in simplest terms that anything which is a right is something which does not require a cost, obligation or action imposed on or by anyone else.

But the Supreme Court's declared right to marry is precisely that. This is so because a marriage involves more than one person. (Warning: Polygamy is coming.)  That means that marriage requires an act by another to trigger and fulfill the "right" of the first person. 

That is not a right. That is a contingent achievement, insofar as a person has successfully found another person who agrees to marry.

A marriage requires a unit. There may be a right to marry by a unit, of more than one person, but then the right is held and exercisable only by the couple. The individual cannot exercise the right without first achieving the membership in or admission to a couple. So how is there an individual right to marry when the ability to marry requires becoming a couple and finding a willing partner?

Nor can marriage be an entitlement. Not unless we wish to declare that some of us are obligated to get married.

That is because an entitlement by one person involves, and requires, an obligation to act by another. It involves a duty and a compulsion to act. 

This is how the right to marry can result in legal shotgun marriages where people are forced to couple up. This is not merely a return to the custom of arranged marriages in many societies; it is in effect a return to slavery where the owner could create and destroy familial relations through his entirely illegitimate property right.

The right to marry goes hand in hand with an imagined right to be fulfilled. We all have the right to try to achieve marriage, but we do not have the right, nor the guarantee, to achieve it.  This is what is meant by "the right of...the pursuit of happiness." You have the right to the pursuit, the chase, if you will. That requires no one else's cooperation, no compulsion, no coercion, just your own effort. 

We all want opportunities. But no one is simply entitled to have the outcome they want. Not even if we dress it up and play games with the meanings of words and call it a right. 






Sunday, June 28, 2015

Obergefell And The Supreme Court's Warning To Finance, Business Communities

The Supreme Court rulings in two cases involving statutory interpretation of the Affordable Care Act and constitutional interpretation of the Equal Protection Clause's treatment of states' recognition of same sex marriage show contradictory reasoning. By so doing, the high court has raised troubling questions about a new era of legal uncertainty about how any plain language document, from laws to regulations to contracts, can and will be interpreted and enforced.

In an era where the legal establishment is increasingly openly hostile to and contemptuous of asset holders and business owners in general, what does this mean for the average homeowner, the average small business owner and even the regular investor?

Last week's momentous Supreme Court rulings hit many people in the finance and business communities hard in the gut, for reasons having nothing to do with partisan politics or one’s personal beliefs regarding same-sex marriage. The rulings sparked feelings, probably very hard to express, define or articulate, all owing to a sense that something is about to go very, very wrong.

That's because the decisions – King v. Burwell,[1] the ruling reaffirming the Affordable Care Act (the "ACA") released Thursday, and Obergefell v. Hodges,[2] the ruling extending same-sex marriage recognition nationally released Friday -- reaffirm the growing unpredictability of legal interpretations from the nation's highest court. That means that when the law becomes uncertain, when its enforcement becomes dependent on hope instead of the law, the power of the law diminishes and the power of its enforcers grows in inverse and perverse proportion.

The message is implied, and it is chilling.  It is, must be, that laws, and certainly the contracts that govern relations among honest people in commerce, are far more open to reinterpretation that they once would have been.

Whereas not too long ago contracts and statutes would have been interpreted, and enforced, according to the "four corners" of the document (that is, what's contained on the paper and nothing more), rulings from the Supreme Court invite a new level of sophistry from people determined to argue that words are to be accorded meanings that are something different, if not something completely opposite, from those intended by their writers.

Consider Chief Justice John Roberts’ majority opinion in King, where he criticizes the quality of the statutory drafting of the ACA.  He wrote, in relevant part:

“The Affordable Care Act contains more than a few examples of inartful drafting. (To cite just one, the Act creates three separate Section 1563s. See 124 Stat. 270, 911, 912.) Several features of the Act’s passage contributed to that unfortunate reality. Congress wrote key parts of the Act behind closed doors, rather than through “the traditional legislative process.” Cannan, A Legislative History of the Affordable Care Act: How Legislative Procedure Shapes Legislative History, 105 L. Lib. J. 131, 163 (2013). And Congress passed much of the Act using a complicated budgetary procedure known as “reconciliation,” which limited opportunities for debate and amendment, and bypassed the Senate’s normal 60-vote filibuster requirement. Id., at 159–167. As a result, the Act does not reflect the type of care and deliberation that one might expect of such significant legislation. Cf. Frankfurter, Some Reflections on the Reading of Statutes, 47 Colum. L. Rev. 527, 545 (1947) (describing a cartoon “in which a senator tells his colleagues ‘I admit this new bill is too complicated to understand. We’ll just have to pass it to find out what it means.’”).
King v. Burwell, pp. 14-15 (emphasis added in bold).

As our legal jurisprudence respects and relies on the precedential value of prior court opinions, you can just imagine the fear of the potential for abuse of the precedent this ruling, and this specific passage, carries for the future. Indeed, for Roberts further wrote:

“In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.
King v. Burwell, p. 20 (emphasis added in bold).

But then consider that the same Justice Roberts, evaluating Obergefell at the same time as King, reached the opposite conclusion. Consider from his dissent:

“Today, however, the Court takes the extraordinary step of ordering every State to license and recognize same-sex marriage. Many people will rejoice at this decision, and I begrudge none their celebration. But for those who believe in a government of laws, not of men, the majority’s approach is deeply disheartening.”
Obergefell v. Hodges, p. 2 (Roberts, C.J., dissenting)

Roberts continued:

“The majority’s decision is an act of will, not legal judgment. The right it announces has no basis in the Constitution or this Court’s precedent. The majority expressly disclaims judicial “caution” and omits even a pretense of humility, openly relying on its desire to remake society according to its own “new insight” into the “nature of injustice.” Ante, at 11, 23. As a result, the Court invalidates the marriage laws of more than half the States and orders the transformation of a social institution that has formed the basis of human society for millennia, for the Kalahari Bushmen and the Han Chinese, the Carthaginians and the Aztecs. Just who do we think we are? “It can be tempting for judges to confuse our own preferences with the requirements of the law. But as this Court has been reminded throughout our history, the Constitution “is made for people of fundamentally differing views.” Lochner v. New York,198 U. S. 45, 76 (1905) (Holmes, J., dissenting). Accordingly, “courts are not concerned with the wisdom or policy of legislation.” Id., at 69 (Harlan, J., dissenting). The majority today neglects that restrained conception of the judicial role.”
Obergefell v. Hodges, p. 3 (Roberts, C.J., dissenting)

Justice Roberts flips the coin, taking one side in King and another in Obergefell.  But such is the nature of decisions made arbitrarily. In so doing, he conveys the alarming implication that no lesser an authority than the Supreme Court shall decide questions of our law by first choosing the outcome, and then working backwards to reach the appropriate patina of legal legitimacy. This is the type of reason which provides ammunition to future would-be abusers of the government’s often-fearsome arsenal of powers.  

In reality, last week's decisions have implications going far beyond the “headline” subject matter of their decisions. They have far more impact on future legal jurisprudence. That is because our legal system is based on and often accords high respect to precedent, meaning prior court rulings.

So when the court rules that a law will be rewritten so it may "work," the finance community should be alarmed. Not because it agrees or doesn't agree with the Affordable Care Act. Rather, because now the confidence that one is obeying the law and can enforce legal rights has been greatly upset.

Think this is an overreaction? Consider that the legal profession is dominated -- run by -- activists who increasingly believe in "economic justice." Such phrases should alarm readers. Simple concepts require no adjectives to modify them, not unless the purpose is to convey the opposite meaning, and so it is with "economic justice." The reality is a legal establishment, now firmly ensconced in the judiciary and among regulators and prosecutors, which is not merely overtly hostile to business in general and "the rich" (read: anyone with assets) in particular, but believes it is now emboldened -- no, empowered -- to go after these sectors with an impunity borne by the delusion that their end justifies any means, and the confidence that their allies will allow them to act unimpeded and their targets have neither the will nor the power to resist. 

In such an environment where hostile actors now have the Supreme Court's green light to erase the plain language of laws, certainly those in contracts will be next.

How far are we from a legal system where the likelihood of getting a contract enforced depends, for all intents and purposes, on one's industry, political contributions or "most favored nation" status. In other words, when does your legal status depend on who you are?

The new sense of the nation being a nation of men, instead of a nation of laws, explains why the public proclamations commending Friday's ruling on same-sex marriage may be more obligatory than sincere, as it is accompanied by a new uncertainty for business. 

Indeed, it is as if the capitalist class consciousness has been raised, to recognize The Dawn Of The End Of Law. And the public celebrations on social media may well be masking a silent dread that dares not be spoken, not in these politically correct times where departure from a shifting, almost undefinable political correctness may mean being targeted with boycotts, or the loss of tenure, or one's contract, or one's job.

The questions now are how the capitalist class will respond. It -- those of us with assets, even if modest amounts -- is mobile, certainly more than the average citizen who is largely tethered to his job, his home, his community, more by immobility from fear of the loss of job, insurance and familiarity than anything else. 

Will this class simply retreat from public life, determined more than ever to make profits and showing its defiance through indifference?

Will the capitalist class publicly wink at the new trends, the new legal paradigm, while privately resolving to avoid any and all encounters with the legal system, the political system and those who would make economic threats at the slightest hint of unorthodoxy?

Legal certainty and the rule of law have always set America's economy apart from the rest of the world's. The new era of unpredictability, save for the predictable animus towards business and asset-holders, simply won't help encourage capital to come here, stay here or be invested here. 

Last week's Supreme Court ruling may make this nation more equal -- that is, more equal with the rest of the world. For Americans, that means several steps backwards. This hidden message is being felt, even if many still find it hard to believe, accept or articulate. 


[1] King v. Burwell, 576 U.S. _____ (2015), available at http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf.
[2] Obergefell v. Hodges, 576 U.S. ______ (2015), available at http://www.supremecourt.gov/opinions/14pdf/14-556_3204.pdf.