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Wednesday, December 27, 2017

Why Americans Don't "Get" Blockchain

It is said that a main appeal of "cryptocurrencies" like Bitcoin, and ethereum, is their ability to replace the need to "trust" intermediaries in transactions with a cryptographic, mathematic-based consensus that does away with the requirement that one trust a third party.

Major institutions in the post-industrial, information-age Western world are still considered to be trustworthy by customers and the general public. This is despite the huge data breaches sustained by customers of the credit bureau agency Equifax, the internet company Yahoo!, and even some government agencies.

The institutional advantage in selling "peace of mind" to consumers should have been eroded by these events, unless consumers and the general public have become resigned to the inevitability of data breaches and other malfeasance by bad actors, lumped into a catch-all category referred most often to as "hackers."

Nonetheless, the Western world's consumer markets still hold faith in large companies. This may explain some (but not all) of the skepticism about the overall value of digital protocols which are traded, on one exchange or another, and used as alternative, non-government-issued stores of value. The cryptographic nature of some of the protocols has given rise to the term "cryptocurrency."

This skepticism persists, despite and perhaps even because of the recent rise in most cryptocurrencies' trading prices. Bitcoin has risen from $3,000 to $16,000 in little more than three months, and from $1,000 just twelve months ago. 

However, this skepticism may illustrate the huge difference between the post-industrial West and the "rest of the world," and hint at why cryptos are being valued the way they are.

Modern economies' naysayers say that Bitcoin and similar protocols should have no value because they are intangible and represent "nothing."

These theories mistakenly project Western experiences over the rest of the world. In the process, they reveal a thorough misunderstanding of the cultural, economic and government systems most prevalent in the rest of the world.

In most of the world, institutions are simply not trusted. The Western paradigm is flipped on its head; banks, governments and even churches are often overtly distrusted and assumed to be corrupt, untrustworthy or incompetent.

In those societies, an electronic form of value transmission is a needed, essential avenue to safeguard and transfer data. In the absence of trusted repositories for portable assets, or for intangible assets such as electronic data, access to cryptographically secure systems for ensuring an "original state" of data deposits, or a non-corruptible transaction ledger, may have a value of ... infinity.

In short, the value of Bitcoin and its blockchain technology foundation can only be appreciated by those who understand the value of a system of economic transfer which does not require its users to "trust" (or more accurately, to "hope" in the honesty of) institutions or other intermediaries whose past performance or behavior has often demonstrated their untrustworthiness.

Westerners from nations with relatively developed economic and legal systems most often do not have (or don't realize they haven't had) the experience of institutional betrayal from once-trusted institutions. 
Until Westerners at large and the financial community in general realize they cannot trust the institutions in their societies to safeguard their assets, their data or their rights, they will not fully appreciate the value, potential and utility of blockchain technology. In the interim, those from non-Western cultures will have a big head-start in developing and implementing this groundbreaking technology.

Eric Dixon is a New York-based lawyer and strategic advisor who got involved in the cryptocurrency space in 2013. He has two blockchain technology inventions, was an influential commentator on the New York State "Bitlicense" upon its proposal and revision in 2014, drafted the first United States Congressional bill on blockchain technology regulation (111th Cong., H.R. 5777), and has met with state regulators on related industry issues. He advises several blockchain startups including Synapse Foundation's smart contract data "oracle" technology initiative called the Zap Project, and Blockchain Technologies Corporation.  

Tuesday, December 5, 2017

The Mike Flynn Lesson: The Less You Say, The More Free You Stay

More recent news cycles have moved from the guilty plea by former Trump Administration national security adviser Michael Flynn, to the Democratic Party drumbeat for a Trump impeachment, to the Trumpian attempt to discredit the special counsel's Russian-collusion investigation by alleging improper (and material) political bias by one of the federal agents who interviewed General Flynn this past January. 

I am ignoring the partisan noise surrounding this issue, or even the larger legal issues about the propriety of the investigation. The subsequent removal of the agent from Special Counsel Robert Mueller's investigative team, ostensibly due to some partisan political messages on social media, has not quelled that distraction. We don't know yet, and we might never know, whether those political posts indicated a bias or otherwise improper animus towards Flynn.

We do know there was an interview, that Flynn answered questions, and that those responses were summarized in a report on the FBI's Form 302. The "302" is a summary, often compiled soon after an interview, of the responses and findings from the question and answer session. It is based on notes and recollections of the agents present. It is not based on a recording, none at all.

In an era where police officers routinely work with "dash cams" and other recording devices which record their activities and encounters, it's certainly possible and feasible to have investigators record their question and answer sessions. Particularly when what was actually said doesn't just possibly indicate whether a crime occurred, or answer the "who," "what," "when," "where" or "how" questions. Rather, a recording can establish exactly what was said, when the response is (as with Flynn) the very core of the alleged felony.

But did you know the FBI has had a policy against recording witnesses in interviews?!  Yes it has. Check out this internal FBI memo, obtained by the New York Times back in 2006, on establishing procedures for when to record interviews.

Without a recording, we can have competing claims as to what was really said. In the Flynn case, this means we can have doubt about what was said, and whether it was "materially false" enough to warrant a criminal felony charge.

One would think that an agency committed to upholding the law and fighting (and deterring) serious federal crime would have the institutional confidence to allow interviews to be tape-recorded or video-recorded.  After all, if the subject of the interview is willing to be recorded, what's the problem, right?  A recording ensures accuracy and minimizes the potential for misunderstanding, misrepresentation and outright misconduct, doesn't it?

Therein may lie the problem. Perhaps the government very much wants to avoid recordings of interviews. That way, it can induce and compel reliance on written reports, produced by none other than the FBI, as the best -- and only -- documentary evidence of what was and was not said in that interview.

The message one must recognize is this:  Trust any government official to accurately portray anything you say, and you do so at the risk of losing your freedom due to the credibility automatically imputed by many if not most jurors towards anyone wearing a uniform or badge. 

For civilians, of course, not talking, or insisting on a recorded interview and declining to talk under any other circumstances, is a safer, more prudent and, in all fairness, essential course of action.  This approach, which should only be considered by those who sincerely believe in both their innocence and the open-mindedness of the investigators to consider the possibility of one's actual, factual innocence (and furthermore, still believe such after relying on the advice of trusted, experienced counsel).

The bottom line:  Any conversation you have with any federal employee -- FBI agent or not -- places you at risk of criminal prosecution.  (You need refer only to the small print sentence about Section 1001 of the United States Code, Title 42 on most federal agency forms and applications; the false statements felony is set forth in a different Section 1001, in Title 18 of the United States Code.)  Your risk may depend considerably, if not entirely, on the honesty and integrity of the agent or employee you encounter.  If you have someone who's tired, doesn't remember accurately, or is willing to embellish, misrepresent or flat-out lie, you could risk going to jail without in fact having done anything wrong.

In his excellent article from 2011, noted criminal defense lawyer (and campus free speech advocate) Harvey Silverglate (author of an equally excellent 2008 book, "Three Felonies a Day: How The Feds Target The Innocent") warned of the false statements risk, and the danger of coercing false testimony from witnesses. He wrote: 
So what happens when the sole arbiter of what a witness says in an FBI interview is the 302 Report written by an FBI agent? If that witness should later be compelled to testify at a grand jury proceeding (leading to an indictment of the target of the investigation) or at the trial itself, he is under tremendous pressure to testify consistently with what the 302 report claims he told the agents when interviewed. Should a witness give testimony that is in conflict with the 302 report, he opens himself up to a felony conviction –either he had lied to the FBI in his initial interview, or he is lying to the grand jury or the court (or the congressional committee) in his testimony. Either way, he remains stuck between the Scylla of perjury and the Charybdis of a false-statements charge. Few question the veracity of the 302 report; after all, who will a jury more likely believe, a single witness or two upstanding FBI agents swearing that what they wrote in their 302 report accurately represents what the witness said when interviewed? 
Without a tape-recording of what you actually said, it's much easier for the FBI to prosecute you by simply using its 302 to claim you said something -- that you never said. It's your word against theirs. 

Why would the government do this? 

Maybe prosecutors cannot prove you've done anything wrong -- or when you're totally innocent -- but your testimony or "cooperation" is thought useful, and the leverage of an unfavorable sentencing recommendation (think: jail versus probation as the prosecutors' recommendation) may help a reluctant (or scrupulously honest) witness say what is considered the truth.  Of course, this notion collides with some bedrock presumptions, such as that truth and guilt are objective values which matter, or that the government has responsibilities to its citizens and not vice versa. 

Think about these risks when a government official wants to ask questions. The friendly interview you have, when you think you are doing the right thing, may actually be a spider web designed to trap and catch the unwary in arguably false or contradictory statements or omissions.  You walk in innocent and leave guilty.  

Often, the difference between someone ultimately being guilty of something, or never being charged, is as simple as having the emotional maturity to resist outside pressures to conform one's actions or statements to please someone else. When we were younger, this was called by its simple name: peer pressure. Human nature doesn't change, temptations and vulnerabilities rarely change. 

Now, had General Flynn's interview with the feds been recorded, perhaps there might be much more "reasonable doubt" about whether he lied. 

Best of all, had General Flynn literally not cared about public opinion, what his peers or the Washington, D.C. / Northern Virginia cocktail circuit  thought about him, he might have exercised the judgment to (1) consult a lawyer before speaking with investigators, and (2) in all likelihood, to have followed the advice he likely would have received to decline to speak at all. 

Almost certainly, had he followed the advice in (2), he might be thought crooked or shady or whatever, but would he be a felon today?

Better to be silent, and be thought a crook, than to talk, and give the government all the opportunity to make you one.

Friday, December 1, 2017

The Michael Flynn False Statements Charge (Expected)

Multiple sources are reporting that former National Security Advisor Michael Flynn will enter a guilty plea to at least one false statements federal criminal charge when he appears in Washington, DC federal district court later this morning.

Stay tuned, because more information will come out. But this much is certain: Flynn is making an appearance in federal court this morning and that means he is either being arraigned (and entering a not guilty plea) or pleading guilty to at least one charge.

One federal criminal charge will reportedly be for lying to Federal Bureau of Investigations agents. This is a good reminder what people who are innocent (or think they are innocent) should do

A lying-to-federal-agents charge can be brought under Title 18, Section 1001 of the United States Code, a criminal section which provides that someone who:

"...knowingly and willfully--

 -- falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

 -- makes any materially false, fictitious, or fraudulent statement or representation;  or

 -- makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;

shall be fined under this title, [or] imprisoned not more than 5 years..." (Emphasis in bold)

It isn't enough to lie; the lie has to be "material." It also has to be "knowingly and willfully" made.

In a 1995 ruling (opinion written by the late, great Associate Justice Antonin Scalia), the Supreme Court ruled that a material false statement must have  "a natural tendency to influence, or [be] capable of influencing, the decision of the decisionmaking body to which it was addressed."

Now, where did this false statement get made? It might have been very early this year. Flynn reportedly spoke with FBI agents about Russian involvement in last year's presidential election, just days after President Trump was inaugurated. 

Thursday, November 30, 2017

Workplace Sexual Harassment Epidemic Misses Chance To Address Larger Issues

The current news "wave" of sexual harassment allegations against high-profile elected officials and media celebrities is not about redress for the victims.

It should be about creating safer workplaces for women -- and also, for men. This is a stated goal from some corners, but it is unlikely to occur. That's because, unfortunately, the true objective from many other corners is quite different and one which overlooks and ignores victims as mere individuals, little more than collateral damage, but they are useful for the role they play here. Arguably, it's double victimization.

Without the victims, who will soon be forgotten (although their already-sustained consequences will linger), and without the appalling (and in at least one case, likely criminally indictable) sexual misbehavior of these predators (some of whom have admitted indirectly to some allegations), the larger but hidden agenda at work cannot be advanced and achieved. 

The indefensible nature of the behavior is necessary. It supports the horrible accusations, so often made with full knowledge of their falsity but nonetheless useful for intimidation, that anyone raising questions about evidence, the credibility of accusers (years if not decades after the fact) or the cultural standards for defining sanctionable, punishable offenses, never mind actual culpability, is essentially condoning, approving or even participating in the even more horrible behavior.  

The conflation between just highly-inappropriate (and flatly boorish) behavior, which behavior often crosses into the illegal in the workplace and can easily turn into criminal, is also with a purpose. Confusing the population as to what behavior is "allowed" is useful fosters apprehension, insecurity and indecisiveness, weakening any sense of a universally-accepted (and respected) "bright line" standard (whether legal or cultural) for behavior. As legal and cultural uncertainty grows, the "accepted" standard becomes that which is set by the loudest and boldest voices.

Unfortunately, the risk of undermining general respect for the law, and for authority, in our society will be stoked by such passions.

When that respect is diminished, respect for standards of behavior gets reduced as well. This is true, whether the standards are "set" by generally-shared cultural norms or by state law.

The real tragedy here is that we have seen the powerful exercise abuses of power. These abuses involve much more than misconduct which contains a sensational, sexual component, and they involve much more than celebrity wrongdoers whose actions would not generate media attention if they were not celebrity names.

The shame and missed opportunity is that the general topics of abuse of power in the workplace, and of outrageously abusive behavior in general across society, will be ignored.

Perhaps that's because there are too many other people who are benefiting from those abuses.

Who will speak for their victims?

Wednesday, November 29, 2017

Legal Concerns After The Sudden Firing Of Today Show Icon

The long-term host of The Today Show on NBC, Matt Lauer, was fired today barely 24 hours after the first complaint about his behavior during his 25 years at the network, according to a memo circulated by Andrew Lack, the network's president for news.

The stated reason was "inappropriate workplace conduct."

But there might be 28 million other reasons: Lauer's reported salary was $28 million. That's a lot of bread, for any broadcast network, in an industry plagued by declining ratings amid systemic audience shifts away from traditional broadcast television and towards alternative technologies and media.

Lack's memorandum stated the network received a "detailed complaint" this past Monday night about the 59-year-old Lauer's behavior. He acknowledged it was the first complaint ever received, then continued by claiming the network "was presented with reason to believe [the alleged incident] not have been an isolated incident."

As the purge -- or is it, the putsch -- of Men (Allegedly) Behaving Badly continues, of concern should be the apparent Star Chamber treatment of some of the biggest "stars" in show business, politics and, likely, other arenas in public life, celebrities or "big names" all. It is not certain -- and from a mathematical perspective, unlikely -- that everyone named in a complaint is guilty. 

What does this all mean?

The incredible pace with which the network moved after receiving, it claims, the first and only complaint this past Monday night must raise questions about the strength of the evidence, the credibility of the network's response and investigation and the network's true motives. For now, without knowing more or having the access to the critical documentation, the incredible speed with which this decision was apparently made suggests haste, at the very least.

Should the NBC documents be accurate, this means that a major employer went from 0 to red zone termination territory, from receipt of complaint through the stages of investigation, inquiry, collection of evidence and likely some review by internal (and external) legal counsel, to decision, in less than 36 hours.

(Quick questions here for the audience: Could your job be in jeopardy from a vengeful, envious or devious co-worker, angling for that promotion or your very job, and now armed with a convenient way to eliminate the competition? In the current environment where it may be more possible than ever to achieve competition-eliminating results through allegations which might be easier than ever to make, and be believed, without going through the traditional scrutiny, do not discount the temptation of false allegations by people without scruples.  As for employers, if you act in haste without proper procedures, could you be at risk of wrongful termination lawsuits?)

Such speed could -- and emphasis needs to be placed on that word, "could," because there are so many actual hard facts not available right now -- mean the "evidence" was really strong. As in damning, no-explanation-necessary, this-is-unacceptable behavior.

We don't know the behavior, the context in which it allegedly occurred or the validity of the evidence. The focus here is on hard, legal facts, not the potentially salacious details of any allegation. 

We also don't know Lauer's side of the story. Stay tuned, as that's sure to be coming sooner than later.

Quick question: Was 24 hours (and likely, far less time) enough time for anyone to determine that whatever "evidence" may have been presented was indeed genuine evidence, i.e., not fabricated, distorted or otherwise manufactured to support whatever allegation was made?

The speed alone will give rise to suspicions (and conspiracy theories, any second now) that the firing is either a cover-up of something else (misconduct by someone else?), perhaps an intentional distraction, or that it was a pre-ordained move instigated by someone in upper management with either a strong grudge or other motive.

One thing to remember: Such a move might be grounds for "termination with cause" and could be motivated by a desire to get out of the high salary Lauer was commanding. You don't think saving $28 million wouldn't motivate a network, plagued by declining market share (which is affecting all old-guard media), to look for every possible way to get from under that burden?

Something else to remember: We have not heard from Lauer or his representatives. They surely will be very busy today. Lauer's employment is reportedly governed by an employment or personal services contract, and the terms of that will surely be hotly contested.

A third thing to remember: We don't know the details of the allegations. But what will now be the "bar" or "standard" for what is merely "inappropriate workplace" behavior, or "fireable" offenses?

Celebrities generally are plagued by opportunists, scam artists and the like. They now may be under career-threatening danger from anyone in their pasts with a grudge, real or imagined, who has access to questionable evidence (which is more available in the age of smartphone cameras, etc.).

And those statements are applicable -- to the celebrities who are innocent.

The current fever pitch of scandal is encouraging virtue-signaling-by-firing, perhaps with due process being discarded. But we should also pause to think whether this "trend" might ruin -- permanently, irreversibly -- careers, reputations and even lives.
Lauer started his broadcasting career in 1980 and began his NBC stint in 1992 with dual gigs co-hosting studio programs at the network-owned New York flagship station WNBC. 

Wednesday, November 1, 2017

Surprising Support For Free Speech Restrictions, Hate Speech Bans: Cato Survey

The First Amendment we know and love would be under serious attack if most Americans had their way, according to some shocking, underlying findings from a Cato Institute survey.

The Institute's Free Speech and Tolerance Survey was conducted in conjunction with YouGov, collected responses from over 2,500 Americans in late August, just days after the infamous Charlottesville, VA protests. 

A substantial portion of the population, and strong majorities of both African-Americans and Latinos, believe that supporting someone's legal right to say something racist is as bad as saying it yourself. Over six in ten Latinos (61%) and nearly two-thirds of African-Americans (65%) believe that "supporting someone's right to say racist things is as bad as holding racist views yourself." Over one-third of whites (34%) of whites and 43% of all respondents agree with that view. 

Survey results indicate many Americans have often-contradictory opinions but nonetheless favor some draconian remedies which might be considered "content based restrictions" on free speech. Such "content based restrictions" serve as a "fault line" which our federal courts have used in recent decades to strike down laws, regulations and practices of federal, state and local governments found to be unconstitutional restrictions on free speech. 

While that suggests our judiciary might be counted on to protect government overreach or popular abuses (its traditional role in checking the other branches), the other risk must also be considered: that popular sea changes in attitudes could lead to massive future shifts in what the courts consider protected free speech.

More than half of respondents -- 56% -- believe it is possible to have free speech, while simultaneously banning hate speech. 

The difficulty of defining hate speech was recognized by most survey respondents.  

Most Americans -- 59% -- believe people should be "allowed" to express unpopular opinions in public, even if they are "deeply offensive to other people." On the other hand, four in ten agree that government "should prevent people from engaging in hate speech against certain groups in public." While that opinion is still a minority, 40% support for what amounts to criminalizing "hate speech" should set off alarm bells.

There are also significant racial, ethnic and political-party-identification divides. While two-thirds of white respondents oppose government bans on "public hate speech," nearly three in five African-Americans (56%) and Latinos (58%) support such bans. Among self-identified Republicans, 72% oppose such bans, while more than half of self-identified Democrats (52%), 59% of African-American Democrats and 65% of Latino Democrats support them. 

Interestingly, over five in nine (55%) white Democrats oppose the bans, indicating that on matters of free speech, white Democrats are more in line with average Republicans than with minority members of their party. 

Self-described libertarians (82%) oppose these bans, while nearly two-thirds of "populists" (defined in the report as "social conservatives who also support bigger government") support them.

Attitudes among current college students may be most worrisome. The survey found that current college students are split (49-49%) in favor and opposition to government bans on hate speech. 

Most respondents (79%) find hate speech "morally unacceptable." The Cato Institute's conclusion is that many respondents do distinguish between "allowing" and "endorsing" speech they find unacceptable. However, this finding, when taken in conjunction with the primary finding that 40% agree that government "should prevent...hate speech," shows that roughly one-half of respondents support banning speech which they find unacceptable. 

Finally, a surprising finding: 24% -- one in four -- think hate speech is currently illegal. 

The takeaways? 

A substantial portion of the American population is currently willing to impose their own moral judgments on "hate speech" -- however arbitrary -- on others.

What does this mean for the future of the country?

Current racial and ethnic disparities in the propriety of government restriction on speech indicate that future demographic trends could put free speech at risk or at least result in changing legal standards as to what is constitutionally-permitted free speech. These trends may be accelerated if the nation continues to experience significant immigration from parts of the world without robust traditions of civil rights and cultural tolerance for differences in opinion, and assumes newcomers do not readily adopt traditional American attitudes towards free speech and constitutional rights. These trends may be further supported by the significant support among current college students for hate speech restrictions, assuming both that this segment of the population does not as a group experience a significant attitudinal shift and that it is responsible for producing the next generation of judges, legislators, government regulators and other opinion leaders most likely to influence or impose their values on the society at large.



Tuesday, October 31, 2017

Senator on Trial: Bitcoin "Ideal" For Crooks

It's disturbing and revolting to the justice system when suspects on trial, and especially elected public officials, "find ethics" when they're about to be indicted, convicted or sentenced.

These courthouse confessions are efforts to evade the consequences of bad acts. As such, they're consistent with prior behavior.

Such is the case with Senator Robert Menendez (D-Hoboken), who's currently on trial for numerous bribery charges. His trial is about to go to the jury. Today, Menendez said

"Because of the anonymous nature of bitcoin transactions, the digital currency is an ideal choice for criminals..."

On the contrary. The blockchain, the foundational technology underlying bitcoin (which is a protocol), acts as a public ledger. As such, it is an immutable library, a data warehouse or marketplace where information is preserved in its original state.

That makes it an immutable evidentiary chain. Ideal for criminals? More likely? Ideal for investigators.

Sounds like the Senator has regret.

Regret, because he doesn't understand distributed ledger technology and thinks he could have used it to avoid detection.

Saturday, October 28, 2017

How Warren Buffett Is Dead Wrong On Bitcoin

The Oracle of Omaha, legendary investor Warren Buffett, recently said about bitcoin:

"You can't value bitcoin because it's not a value-producing asset."

Buffett is undervaluing, or entirely discounting, the value of information which has been passed on, or verified, by an algorithmic-based consensus reached among users as to items or events listed in a public ledger in a decentralized network.

The value of verified information, or data, should be increasingly apparent to followers of current events who have become increasingly accustomed to "fake news" or other, more subtle forms of data degradation. 

The utility of the best data is apparent to market participants in virtually every industry, in virtually every marketplace whether an international, borderless marketplace or a local or regional market.

The value of that data is demonstrated time and time again, because the savviest market players compete to get that information first before their competitors. 

The savviest market players. Men and women, like Warren Buffett.

Buffett may be making the mistake many casual observers have committed, in viewing bitcoin and other "cryptocurrency" protocols solely as media for exchange and for commerce.   

That outlook would tend to focus on the protocol's utility and convenience for clearing transactions, and the most common application would be to verify transactions the same way as credit card transactions are cleared. Bitcoin and other protocols have yet to solve the transaction processing bottleneck problem while preserving the framework for data integrity. 

If that is indeed the impetus for Buffett's remarks, he would not be entirely wrong in that regard. However, he appears to sharply understate and underappreciate the value of correct, verified data. 

When the protocol governing bitcoin is numerically limited such that scarcity is the primary driver of the larger value of data integrity, the ability to verify your data becomes subject to the limited supply of the bitcoin. The growth in an information-driven world economy may outlive Buffett, but the trends should already be apparent to most observers. 

Saturday, October 14, 2017

Investigations and Secrecy

Why are investigations -- some investigations, that is -- so open, so widely reported on?

I am troubled by this.

Not because of the targets of the investigations, and it doesn't matter whether it's a government investigation, an internal investigation (e.g., by a company of an employee) or in connection with possible lawsuits.

It's because the more "open" and "known" an investigation is, the less likely it is that real useful information will be retrieved. 

I also suspect another result: The more likely it is that real useful information will get hidden, obscured or outright destroyed.

So if you're worried about getting to the real truth, the whole truth and nothing but the truth, remember Dixon's Thirteenth* Law: 

The more you hear about an investigation, the less likely you'll hear the truth; the less you hear about an investigation (and maybe you'll hear speculation that an investigation has "stalled"), the more likely it is that the investigation will be effective!

( * - This means you've missed out on the first 12.) 

Effectiveness, of course, is measured as getting to provable conclusions, not in an outcome that's desired (e.g., someone's indictment). 

Unfortunately, many investigations involving people in the public eye -- politicians, or entertainment figures like Harvey Weinstein -- spur observers to take sides and root for an outcome. 

It's very hard to keep an open mind as a neutral factfinder, which is the appropriate approach for an investigator. 

However, that's the mature approach. No matter whether the sides battling each other in courts of law or the courts of public opinion like it. 

Wednesday, October 4, 2017

Name Confusion On Suspected New York Bomber

In all legal matters but most especially in criminal trials -- and extra especially in trials involving suspected terrorists -- the name of the accused matters.

The alleged terrorist behind several bombings in New Jersey and midtown Manhattan over a two day span last September is now on trial in Manhattan federal court. 

One of the bombs was placed in front of a Manhattan art gallery called King David Gallery. Draw your own conclusion regarding the intent. 

However, in exclusive proprietary research I did last September (and posted hours before CNN), the bomber's name (now reported everywhere as Ahmad Khan Rahimi) was found to be: Ahmad Khan Rahami

That's R-A-H-A-M-I. Not Rahimi, the name he currently goes by and which was first reported three weeks after he was apprehended.

And Rahami has family in Elizabeth, New Jersey with -- you guessed it -- the spelling that I reported. 

Not the entirely bogus spelling which the defendant now claims (probably in a bid to spare his family trouble) and which is, in an appalling deception on the public, being indulged by both the courts, the authorities and the complicit news media. 

Want proof? Look at the defendant's name in the caption on the front page of the federal criminal indictment, which I found and post here

(Counterpoint: How different is this from the case of the convicted spy once known as Private First Class Bradley Manning, who "transitioned" to Chelsea while in the brig and got released after doing less than four years for espionage for WikiLeaks?)

Monday, August 14, 2017

Charlottesville's Collateral Damage By Association

The disgusting and nefarious events of this past weekend are too important, too significant and indeed, too dangerous to be seen through a simple prism of "our side versus their side." 

A young woman was killed. Killed for being in the wrong place at the wrong time. Killed for participating in civil discourse, for exercising her constitutional rights. 

We can rebuild civic society, restore respect for individual rights. But that young woman is gone. 

There are other victims on a broader, yet less tragic scale. 

The entire weekend represents another unfortunate success for fringe political elements to take advantage of our constitutional rights and exploit the attention they get from news coverage to make themselves look important, look bigger than they are, look more respectable than they are. These elements have no redeeming features, and make no mistake about it, they respect nothing and no one else. Everyone else is fair game, so they claim association with other groups, with elected officials, and even with sports teams. (One famous team's iconic logo was spotted on protest flags, with the team promptly denouncing the link.). 

This collateral reputational damage to the legitimate, to the respectable, is not an accident. It is on purpose. The fringe seeks to destroy the institutions and societal conventions which exclude, repudiate and reject them. 

When you see that strategy at work, you'll realize that the common political spectrum labels of "left" or "right" or "center" don't really apply.

Of course, the other serious downside to this weekend is the exploitation of tragedy by the Far Left to further shift the political demarcation lines. The Left now has the relative high moral ground -- that's not a hard accomplishment, not right now -- and is framing the debate to say, essentially, that anyone not standing with Antifa, with the most radical Left elements out there, is by default standing with the white supremacists, the fascists and, yes, the murderers.

Even worse, the exercise of First Amendment rights of free speech, of assembly, will be associated with the vilest elements as a means of attacking those rights, chilling their exercise and slandering the reputations of those who exercise them. 

Sadly, this weekend will give ammo to the totalitarian elements who are ready to accuse anyone supporting these core constitutional rights of standing with and supporting white supremacist murderers. 

For the Far Left, which rationalizes individual suffering as the necessary "broken eggs" in the progress towards Revolution, this weekend was a tremendous victory. 

For the rest of us, we've moved several minutes closer to midnight on the Lost Constitutional Rights Clock. 

Friday, July 28, 2017

BREAKING: Trump Made Us Jump! New York Couple Jumps To Death, Blames Health Care Costs

This article really requires the subheadline: Why Suicide Is A Sin.

Early Friday morning, a Manhattan couple committed suicide by jumping to their deaths from the upper floors of an apartment building off tony Park Avenue.

According to New York police, both the man and woman left suicide notes referencing their children who were still in the apartment, and asking they be cared for. The man's note reportedly contained the statement, "We both have medical issues, we just can't afford the health care." 

Yet they could afford to live one block off Park Avenue, and two blocks away from the iconic Empire State Building?

And, no doubt, their multiple children can afford to be without both their parents.

Maybe the parents felt relieved of their divine responsibilities by that horrible recent English court ruling (in the Charlie Gard case) that "children do not belong to their parents." And, after all, children are little more than evolved blastocysts, so their welfare is of little regard.

One has to wonder -- and the authorities really ought to investigate -- whether the parents' "issues" included being impressionable enough (and certainly, narcissistic enough) to be induced to "jump because of Trump" as a way to make a political statement.  Because in the progressive Petri dish of Northeastern cities, this might just be the way to "win the competition" for the greatest event of virtual signaling. 

Throw in the tendency of many adults now to be overmedicated, or out of balance, and you have a truly vulnerable segment of the population, ripe prey for predatory activists eager for a news event or "false flag." Anything for revolution!

What happened this morning is horrible. Can we be so sure it isn't an accident?

Thursday, July 20, 2017

BREAKING -- OJ Simpson Wins Parole; Release Scheduled For October 2017

The former football star O.J. Simpson was just granted parole in Nevada and will be scheduled for release this October.

Simpson, serving 33 years for armed robbery, was granted parole by a four-member parole board panel unanimously ruling just minutes after hearing testimony from Simpson himself as well as his primary victim, who spoke and argued in support of Simpson's release.

One of the board members called Simpson a "low risk" to re-offend.

Simpson was convicted of 10 criminal counts in 2008 and sentenced to 33 years, with his first eligibility for release on parole being this October. Simpson has claimed that he was not robbing sports memorabilia in 2007 when he broke into a hotel room and seized signed goods, but retaking items he claimed were previously taken from him. Simpson maintained those claims at today's hearing.

Simpson's victim in the 2007 break-in to a Nevada hotel room, memorabilia dealer Bruce Fromong, said Simpson "never held a gun to me" and "never laid a hand on me," and said Simpson's sentence was "way too long." 

Simpson testified on his behalf in the hearing, saying: "I've made no excuses...I take full responsibility...I had no intent to commit a inmate has represented this prison better than I."

Simpson apologized to the state of Nevada and then expressed regret for his actions trying to said "nine years away from my's just not worth it."

Fromong, the sports memorabilia dealer, called Simpson "a good man who's made a mistake." He said he never stole from O.J. Simpson, and said, "O.J. never held a gun to me," instead identifying someone else. "He [O.J. Simpson] never laid a hand on me." 

Simpson was acquitted in 1995 of charges in the murder of ex-wife Nicole Brown Simpson, who was killed in June 1994. That was after Simpson was infamously chased in a Ford Bronco by police in a highway chase captured by helicopter video on nationwide live television during one of the championship games in the 1994 National Basketball Association finals.

Thursday, June 29, 2017

Horizon Bill Echoes Christie's Arm-Twisting As Prosecutor

New Jersey governor Chris Christie is ready to shut down state government because he and legislators cannot agree on a state budget, and a sticking point is a horrible Christie proposal to raid the reserves of the state's dominant health insurer, Horizon Blue Cross Blue Shield, under certain conditions (such as the reserve being too high) to shift funds to his new pet project of combating opioid addiction.

The problem is that those reserves represent customer payments, and not one penny would go back to them. It's the functional equivalent of the IRS keeping your tax refund and giving it to a tax commissioner's favorite charity.

Now, if the Horizon proposal doesn't pass Friday, Christie and some Democratic allies have threatened to shut down state government. That's because Friday is the last day of the preceding fiscal year and a budget for the new year starting July 1 has not been passed by the legislature.

Some Democrats are going so far as to reportedly seek to remove current Assembly Speaker Vincent Prieto from that role, because Prieto, a strong opponent of the Horizon reserves proposal, refuses to allow that proposal to come up for a vote in the State Assembly.

How bad is this attempt to seize over $300 million in excess Horizon premiums? What's the effect of this?

If there are reserves, it is because either customers have paid too much or Horizon has not provided enough care. The proposal would not fix either problem. Customer premiums get shifted under Christe's proposal, not to their own healthcare, but to drug addicts.

Or as a cynic might point out, into the pockets of those few and connected health care providers who are in the drug treatment industry.

If you have health insurance through Horizon and that company has excessive reserves -- which come entirely from what you pay in premiums -- you won't get a refund or credit. Not one dime.

You won't get an expanded network.

You won't get more choice. Remember, if you're on an exchange (and Horizon is one of only two insurers participating on the Obamacare exchange!) you have no choice but to get covered on these exchanges, at whatever cost the insurer sets.

Again, if you pay too much, Christie's proposal would mean your overpayment gets shifted elsewhere.

Not refunded.

Christie has done this arm twisting of businesses to benefit friends and cronies before, however. When he was United States Attorney in the last decade, he prosecuted some companies and secured settlements that called for the companies to hire special monitors (law firms of friends of his) or make large contributions to pet causes such as to Seton Hall Law School. That is, Christie's alma mater.

This is how elected officials score brownie points.

You get the bill.

Saturday, June 24, 2017

Winning In Business, Politics and Relationships With Just These Five Words

Five Words To Run Your Life By

By Eric Dixon

A business campaign, a political campaign and personal relationship all have something in common.

They are successful when they accept that human nature matters most of all. 

It's not about products, services, issues or what you say on social media. That all obscures the core point: Cater to your base and treat it like a tomato plant. Water it. Cultivate it. Make it feel special. 

Business, politics, philanthropy, when they are successful it is always because they recognize the importance of feelings, of psychology. There is nothing more important than making your base feel like it is the most important thing. Or the only thing!

A quick point: Most people will disagree with me. Just watch the comments section here. They will argue on facts. They will invoke morality.

My quicker responses: First, they are forgetting and ignoring the role of feelings. And second, most of those who disagree with me, are failures! Most people fail! Success is not common! Keep reading!

Since some of you actually care about politics -- the rest of us have, um, real lives -- here is a political twist to the advice above. 

Most candidates lose because they make one central error, and never realize it. They chase the base of their opponents. Why is that? 

Because in going after other segments of the voters, you are sending messages to your base which will ensure your defeat!

The messages? 

Our opposition matters more than we do.

We're being taken for granted.

He (or she) really doesn't care about us.

We don't matter. 

Whether these messages are true or not, that's not the point. When appealing to potential customers, facts don't matter; feelings do. 

That's what your base will feel. Issues, social media statements, none of that matters. Real attention matters. 

Give your precious time to other constituencies, and the one word message you send to your core is indifference. That will be returned, on Election Day. 

Make the people most important to your campaign, feel the most important. (Just like in real life.) Nothing means more than giving attention to people. 

This will sound harsh, but it is true in all relationships: personal, business, political. Give your attention to the people who matter. 

When you have a scarce resource -- your time -- your decisions make a big difference. Be very discerning and uncompromising with your time.

Donald Trump learned these lessons a long time ago in the real estate world. What did he do when he ran for President? He ignored convention, he ignored (and disparaged) his opponents. He made his base feel special, like they were the only thing that mattered. 

Trump won, by mastering five words: The carrot and the stick.

The carrot? In his presidential election it was playing to his base and deliberately ignoring his opponent's base. Why did this work? Because to his base, their reward was his attention. And part of that reward was a second, related, unspoken message -- the stick -- that his (and their) opponents did not deserve his attention. The effect of that, the subtle punishment of withholding attention, is to enhance the reward to those receiving his attention.

Manipulative? Yes. Cunning? Yes. Shrewd? Yes. Nasty, even? Probably.

But this is done in retail all the time! Customer affinity points, rewards plans, frequent flyer plans, points back on your credit card. These are all rewards systems which push your buttons with messages about loyalty, rewards and punishments.

You need to do the same. Reward your constituency with attention and you maximize your shot to win.

Thursday, June 1, 2017

BREAKING NEWS: Convicted Terrorist Steps Down As Puerto Rican Parade Grand Marshal

First Kathy Griffin, now convicted Puerto Rican terrorist (aka nationalist freedom fighter) Oscar Lopez Rivera. Conservatives and common sense terror opponents are unleashing the power and fury of boycotts, and scoring victories. 

One of the largest street parades in the nation, New York City's Puerto Rican Day Parade, faced evisceration from its own community over its award of "National Freedom Hero" to convicted terrorist Oscar Lopez Rivera.

Some of the biggest companies serving the Hispanic market worldwide pulled out from the parade in recent days, including the two top Spanish-language television networks Univision and Telemundo, Coca-Cola, the Spanish food empire Goya Foods and even the New York Yankees. Many elected officials, even in a Far Left safe space like New York City, also announced they would not march in the parade. 

Rivera, a leader of the notorious FALN terrorist group which sought Puerto Rican independence from the United States, announced he would decline the parade's award as a "National Freedom Hero" but would still march in the Puerto Rican Day Parade in New York City on June 11th. 

In this column published in the New York Daily News, Rivera expressed no contrition for his prior association with the FALN, which claimed responsibility for over 100 bombings in the United States in the 1970s and 1980s. FALN attacks killed six people, including four in one 1975 bombing in New York's storied Fraunces Tavern which dates back to the American Revolution. 

Rivera was released from federal prison just last month after serving 35 years in federal prison after his 1981 convictions for weapons manufacturing and seditious conspiracy. The remainder of his sentence was commuted in January by former President Barack Obama. 

Friday, May 26, 2017

Target! The Possible Legal Trouble of Jared Kushner

Jared Kushner (whom if you haven't been under a rock, is President Trump's son-in-law) is reportedly under federal investigation for his possible involvement in suspected illicit Russian meddling or interference (whatever those terms mean) in last year's election.

One wonders if envy of a rich kid with family connections and an uber-attractive young wife isn't a real motive here, to say to someone: 

Ha! Serves you right.

It is easier to focus just on what the ramifications of such a probe are, in a fact-agnostic way without regard for whether anything has actually been criminal, or who is involved, or who won the election. The technical details of such an investigation, and the protocols which might govern its conduct, are extensive and obtuse. To simplify matters, there should be no assumption that Kushner (or anyone else) is under criminal investigation in the sense of being a "subject" or "target" of a probe. 

I put the words "subject" and "target" in quotes, because each term has a specific meaning according to a very thick guide put out for use by the United States Attorneys and their respective offices. Those men and women are the ones who actually have to decide whether, and whom, to prosecute, not the FBI. That's the mistake everyone has made with former FBI Director James Comey, who did not and never had the authority to decide whom or even if to prosecute. (Comey's agency investigates and recommends, but the Justice Department and district United States Attorneys decide that question.)

Both terms involve a requirement that the person, whether subject or target (and one's status can change, incidentally), be notified of his or her rights to appear before the investigating grand jury, as well as to assert Fifth Amendment rights if requested to appear.

As for the meaning of a "target," that generally means the government is operating on the assumption the target is a "putative defendant" against whom there is "substantial evidence" linking the person to a crime, and is more likely than not to be charged for some criminal offense. Anyone who is a "target" is likely to be charged and indicted, but not always. 

The term "subject" means that the subject's conduct falls within the scope of what the grand jury is investigating, and that "conduct" may not necessarily be criminal, only that it means the subject is involved in the focus of the probe. 

Anyone who is notified that he or she is either a subject or a target should hire a qualified criminal defense lawyer, promptly.

As for Kushner, there is no indication he is either a subject or target. At least not yet and perhaps never. 

What we do know is he has a high-enough profile to make him, at least in the colloquial sense, a target of the ambitious. In addition, his family connections have been a double-edged sword, presumed to give him a head start in life. 

Consider Charles Kushner, Jared's father. The elder Kushner pleaded guilty to various tax crimes after an investigation during which some rather sordid details of Kushner's retribution against family members came out, causing the sentencing judge to call Jared's father a "revengeful, hateful man." (And the prosecutor? Then United States Attorney Chris Christie.)

Yet it is that Kushner family fortune which (presumably) helped the younger Kushner acquire the Manhattan elite-class weekly New York Observer ten years ago, and that plus the real estate industry connections likely positioned Kushner to enter into and move about circles where he would meet . . . Donald and Ivanka Trump.

Now consider the legal troubles of Donald Trump, trickling . . . no, pouring . . . down on Jared. 

This is a still young man whose elders, his father and father-in-law, have acted in ways and he has been made to pay a price. 

I seriously question whether this is a circumstance anyone should celebrate. 

Friday, May 19, 2017

Anthony Weiner Pleads Guilty To One Federal Sex Crime, Faces Jail; Huma Abedin Files For Divorce

Disgraced six-term former New York congressman Anthony Weiner will lose both his freedom, his marriage and perhaps even parental rights after he pleaded guilty in a Manhattan federal courtroom to one federal charge of transmitting sexual material to a minor.

Weiner took responsibility for his crime, stating that while he had what he characterized as a sickness, he does "not have an excuse."

Weiner's guilty plea concerns his transmission of sexual material to a minor, and in this case, to a 15-year-old girl.

Weiner agreed not to appeal a sentence which falls within the range of 21 to 27 months. This means that, absent leniency from the judge, Weiner likely faces federal prison time. Weiner likely will also have to register as a sex offender and that may impact his future custody and visitation rights with his young son with wife Huma Abedin.

While defendants and prosecutors can negotiate such deals in order to secure a guilty plea and ensure certain charges are not filed, sentencing decisions remain exclusively those of the judge who may disregard both sentencing guidelines and prosecutors' recommendations for leniency.

In addition, parole does not exist in the federal prison system. Incarcerated defendants must serve at least 85 percent of their sentence.

On the heels of his guilty plea, Abedin reportedly filed on Friday for divorce in Manhattan state Supreme Court.

Weiner's latest perverted exploits came to light after a camera shot of Weiner apparently amusing himself, with their son in the background, surfaced. Weiner was then connected to a federal inquiry into whether he received classified material from his wife Abedin while she was chief of staff to former Secretary of State Hillary Clinton.

Weiner's sexting problems first surfaced in 2011 and led to his resignation that year from the House of Representatives after he became one of that body's foremost authorities on health care insurance reform. It was at that time that Weiner's

Later, Weiner ran for the Democratic nomination for New York City Mayor in 2013 and was leading the polls until new sexting activity emerged. Those new revelations included the news that Weiner used an alias "Carlos Danger" for his escapades. Revelations in federal court today included Weiner also adopting an alias for his new pursuits.

Saturday, April 15, 2017

Jesus of Nazareth: His Likely Medical Trauma

While Christians worldwide prepare to celebrate (or more properly, to revere) the crucifixion of Jesus of Nazareth (and subsequent resurrection, as held by faith) upon the holy day of Easter, some earthly research into the extreme barbarity visited upon the Nazarene carpenter-by-trade named Jesus may give a new appreciation for the actual and virtually unimaginable suffering He sustained.

A central tenet of Christianity is that Jesus endured this suffering to save humanity and to "wash away the sins of the world." The suffering is associated most often, and with good reason, with His being literally nailed to wooden posts arranged as a cross. Yet the physical trauma -- which has been depicted in excruciatingly brutal fashion in some cinematic works including The Passion of the Christ  -- may have been more extensive, and his treatment even more brutal, than the "mere" fact of His being impaled.

Perhaps there is no greater (or more widely cited) medical authority on the severe physical trauma suffered by Jesus of Nazareth before and during his crucifixion than a 1986 Journal of the American Medical Association paper by Drs. William D. Edwards, Wesley J. Gabel and Floyd E. Hosmer. 

The full paper can be accessed in PDF form through this link

Whether for the devout Christian or just the historically curious, the paper is worthwhile and compelling reading and remarkably relatively brief. It may give readers a new sense of the gravity of the pain and the duration of what today would undoubtedly be referred to as "torture." 

Thursday, April 13, 2017

Judge On New York's Highest Court Found Dead in Hudson River

A sitting judge on the highest New York State court, the Court of Appeals, was found dead in the Hudson River between New York and New Jersey on Wednesday, in what authorities suspect is a suicide. 

Sheila Abdus-Salaam was reported missing earlier on Wednesday, and her body was found by passersby Wednesday afternoon. 

See this full report

Thursday, April 6, 2017

Client Information Is Never Totally Safe: Why We Need A "Know Your Lawyer" Rule

When you, or your company, hires a large law firm, you are assuming your information, your sensitive trade secrets, even sensitive personal information, is safe.

Far from it.

Your sensitive data could be at risk. Not from technology, not from breaches, technology failures or the ready-made-scapegoat-excuse of "hacking."

The risk is from the people who work at the law firm or corporation. 

The risk gets larger, and is harder to control, the bigger the organization is, simply because the biggest "X factor" is human nature and human integrity. That means that the more people with potential or actual access, the less safe your information is. Period. Even if there are "controls." 

That means that confidential client information is often only as safe as the integrity of the least-obedient person working in that firm or company. 

Consider this breaking news from the middle of the State of New Jersey, where a young lawyer got busted for accessing confidential files while a law student working for a county prosecutor's office. 

Could the same wrongful access happen to your files?

Financial institutions have had to obey the anti-money laundering and 'know your customer' rules largely implemented after the 9/11 attacks.

Far too many legal clients don't enjoy the same protections when they use a large law firm. The controls on who has access to information can be unevenly applied, hard to enforce, and susceptible to circumvention.

Most commentary on this topic focuses on the "ethical rules" which are in place in just about every state which govern the practice of law. I don't focus on these rules at all, because those rules are good at shifting the blame from the "leaker" to the lawyer. I think lawyers get blamed for enough things which are not their own doing, and the blame-shifting is only good for other lawyers to find a deep pocket (read: money) to go after in court.

That does nothing -- nothing at all -- to keep your data safe. Preventing your loss is my focus here. So-called deterrence is useless Monday-morning-quarterbacking that others can engage in to try to sound smart. But that does you no good at all, not before your loss and certainly not afterwards.

Risk managers will talk about how to "mitigate" risk. This is a smart distinction. The honest manager knows the risk can never be eliminated, but it can be reduced. 

In a "cover your ass" corporate world, decisionmakers are often rewarded for taking steps which, in hindsight, can be explained or rationalized or defended. But that is different from actual risk management. 

Often, the best risk management starts with the initial decision about which law firm or outside service provider or information technology vendor to use. Those decisions are commonly made in favor of "brand name" or "known" (and so often, larger) institutions, which always carry the integrity risk because of the sheer volume of people who are either working on a matter or have incidental access to sensitive data. (The list goes from top partners and executives down to janitors and copy-room workers.)

A solution may be to use select smaller institutions or even solo practitioners. Those are options which allow for direct accountability and the ability to "know" 100 percent of the personnel involved. There may be a loss of convenience, but as those whose information has been stolen or secrets revealed can attest, there is nothing more damaging or "inconvenient" than a busted deal or lost case because data got into the wrong hands.

Friday, March 31, 2017

How To Screw Renters and Homeowners

Homeowners want to preserve their home value.

Renters, or at least some of them, want to be homeowners one day.

But the so-called experts (including many politicians) on "the foreclosure crisis" have a way to hurt both groups. Even worse, they will make the real problem even worse, because our elected leaders and politicians either can't figure out the real problem, or they're too busy trying to buy support by giving more stuff away.

I've been writing about the "foreclosure crisis" ever since mortgage-backed securities starting going bad and home prices began to tumble, That was in the bad old days -- in other words, 2006 and 2007.

Foreclosures are -- wait for this -- a good thing!

Even for the family in foreclosure, it's a good thing. That family gets to "move on." What doesn't happen for that family is this: It doesn't get to live, rent-free, in a home it can't afford, not yesterday, not today and not tomorrow.

Why Do Foreclosures Occur?

Foreclosures usually happen for two reasons. 

The first is the obvious one: The family can't meet its monthly payment, falls behind and eventually "gives up" on paying. But the family isn't evicted right away, and not even for a few years! Foreclosure proceedings only start when the bank or investor holding the mortgage gets fed up with a nonpaying borrower (in legal terms, this is a "nonperforming asset"). In many states, including New York and New Jersey (both states in which I practice law), foreclosures go through the courts. In New Jersey, the average foreclosure period (that means the time from when foreclosure actions start in the courts, to the date of auction at the courthouse) is close to four years! (That's the longest period in the nation during which a borrower can avoid paying anything and stay in the house!) 

What happens during that time? Often, the borrower is pocketing the money he or she would otherwise be paying. That means some families in foreclosure are better off than they were before! 

How is that? I'll tell you! Because now they have cash.

And if you have been pocketing your monthly mortgage payment for three, four, even five years, that's a lot of money!

Meanwhile, those of you stuck in apartments, even subsidized Section 8 housing, can't move out and move up. Why? Because you're too busy working to pay your bills. And that is why you don't have the pot of gold these other people have. You're paying your bills; the people in foreclosure most often are not. 

The common wisdom in foreclosure relief is to "keep people in their homes." However, when you have an income problem and can't pay your bills, that relief is only delaying the inevitable and denying the obvious: The owner who can't afford the home and who needs to move out, ideally as soon as possible.

But the common wisdom, the politicians, and the people who run nonprofits to do "foreclosure assistance," either don't understand this, or those who do, turn a blind eye to it because they're too scared to lose votes!

As for the second reason for foreclosures, it comes from the lack of value of the underlying property. In the simplest terms, this is expressed by the phrase: The debt on the home is greater than the home's value. These mortgages are often called "underwater" and represent negative equity. These homes are often unmoveable, and fall into disrepair, but the primary reasons for that are either the refusal by the homeowner in foreclosure to sell (or dump) the property at a loss, or the bank's refusal to allow a "short sale" (where the home is sold for less than the outstanding mortgage) because then the bank has to recognize a loss on the asset.

The very opposite happens when a family defaults on its mortgage but still has plenty of equity in its home. That family may not be able to stay in that home, i.e., they can no longer afford the monthly payments, but here's what they can do and what they should do: They can sell the home. For a profit! And then turn around and have money, maybe enough for a down payment, on a less expensive place!

None of this should be taken to mean that expensive homes are immune to foreclosure. There will always be bull-headed homeowners who refuse to accept the inevitable, that they cannot afford to stay in their home. There are also plenty of expensive homes which are overleveraged. But more expensive homes are found in more desirable areas, are much more likely to be bought before falling into foreclosure, and therefore account for many fewer foreclosures than homes in lower-income areas with far less demand.  

A real solution to the "foreclosure crisis" recognizes that the neighbors and neighborhood are the victims, not the owner in foreclosure. A real solution incentivizes troubled borrowers to sell and move on, or for banks to do short sales and recoup part (but not all) of their loss. (The reason not to absorb all the banks' losses is to avoid encouraging banks to make more "bad" or "risky" mortgages to poor credit risks.)

The real foreclosure problem can be identified only when you figure out the real victim. The family in foreclosure, while sometimes a victim of circumstance, is not the victim of the foreclosure. The foreclosure victims are the neighbors, whose property values are threatened by a foreclosure and risk of an abandoned home becoming an eyesore, magnet for crime, or safety or health hazard.

This last point is recognized by some elected officials, because that is their impetus to help those in foreclosure on the hope that those "homeowners" will stay in their homes and maintain them. 

That approach is wrong. It is bad policy. It is also bad politics! 

A homeowner, who already has allowed his property to fall into foreclosure, or disrepair, or both, and who has been pocketing the money that would otherwise go to the loan payment, is not going to be any more responsible with someone else's money when he is getting it for free! 

If that home is an eyesore now, the government or a nonprofit throwing money at the old homeowner won't do anything to keep up the neighbors' home values, won't keep the rundown house from becoming more rundown. (Of course, you'll hear promises to the contrary, because people will do and say just about anything to get their hands on free money.) 

Our neighborhoods will be better off, they will be made more stable, and there will be fewer abandoned or dilapidated properties, if we stop trying to keep people in foreclosure "in their homes" and instead start using our scarce resources to move them out!

As for the elected officials terrified about losing political support, consider some points. 

First, people in foreclosure are few and far between. 

Second, people who are not reliable payers of their bills a hardly reliable voters. 

Third, as the self-styled affordable-housing activists are saying they won't support you unless you take their position of the day, you need to realize you are in an extortionate death spiral in which you will be induced to take ever more damaging positions as you seek to avoid the inevitable, which is to "lose" their support (which you likely never had and never will get) and ultimately an election. 

Fourth, you need to realize that for each voter in foreclosure you seek to appease with these foreclosure-victim appeals, you are alienating many more average voters. 

Voters who pay their bills and own homes are much more incentivized to be active in elections, to contribute to campaigns and to vote their pocketbooks. 

So if you're a politician torn between these two camps, can you figure out who can help you more, and who can hurt you more?

How you answer that question might decide your political future -- and if your town is lucky, its ability to have safe, stable neighborhoods and rising property values for its residents in the future. 

Sunday, March 26, 2017

Facts Versus What You Think Is A Fact: Prosecutions and "Fake News"

The judicial system (that is, our courts) have to parse out the facts of a case.

Both sides (and sometimes cases have more than two sides!) present their version of the facts, their arguments about the law and how the two work, and introduce items into evidence where permitted.

Many people do not truly understand the limits on a fact.

Even worse, and much worse, is this: Those people then compound the first error by imprecisely describing what is it that they claim to have seen, or know. 

This is where the vast majority of people get it wrong. Whether they're in the legal profession, or judges, or journalists, and definitely many corporate officials making decisions, they almost always get it wrong.

Just imagine, those are the people with above average mental intelligence, if not necessarily the emotional intelligence. For those of "average" or even "below average" intelligence, the subtle nuances between "impressions" and "opinions" and actual "facts" are often lost. This is a huge risk factor for people going before a jury, I tell you.

Someone having a feeling about something being wrong? Where's the fact in that question?

It is not that "something" is "wrong." The fact there is the observation about the underlying information that supports the feeling. The fact is the observation, that is, "I saw something." The problems arise when the "something" gets described incorrectly, inaccurately or embellished. 

Facts are objective. 

Opinions are not objective, but it is a fact to say that you have an opinion. The opinion, however, is not fact. 

A particular person who is quoted in some article saying blah blah blah?  The blah blah is not the fact, but the act of it being said becomes the fact. No matter how false the actual subject of what's said might be, the truth of it being said creates a fact no matter how false the subject matter claim might be. 

This brings me to my final points: Facts are objective, but impressions are subjective. Most people hear only part of what you will say (or write). Listening comprehension is a lost skill, particularly as we "multitask" more and get more "plugged in" to competing sources for information.

In other words, we hear, but we do not necessarily listen. And it's much rarer that we actually understand what gets through. 

The same can be said for the skill of reading comprehension. Trust me, as the skill in today's journalism has generally declined from two decades ago, although the dropoff in skill has also affected legal writing. 

Saturday, March 25, 2017

Former Goldman Sachs Executive Would Turn Foreclosures Into Mini-Ghettoes

Whenever you hear people talk about this so-called "foreclosure crisis" or "housing crisis" or whatever these Leftist opinion leaders call it, remember that good policy requires speaking the real truth about public housing. 

Because if we don't, we soon are going to all end up in public housing, that is, in housing where the actual quality of life is indistinguishable from a housing project! Let me explain how.

First of all, there could be an impetus, stemming from this year's New Jersey election for Governor.

The very wealthy former Ambassador to Germany under former President Obama, Phil Murphy, is running for Governor of New Jersey and he is currently battling for the Democratic nomination. The common wisdom and press coverage right now indicates he's a heavy favorite to get the Democratic nomination. As registered Democrats outnumber registered Republicans statewide by nearly two to one (over two million registered Democrats to about 1.2 million Republicans, but over 2.4 million voters haven't picked a party, according to these new figures), and also seeing that Hillary Clinton ran strongly in New Jersey (beating now-President Trump by 14 percentage points), it's a very good bet that Murphy will be New Jersey's next Governor. 

Here is what is troubling. Ambassador Murphy, perhaps being made to feel he should be ashamed of his own accomplishments in life, senses he must atone for his success by "giving back."

I've met Murphy and spoken to him at length personally. He is a decent man, perhaps too decent for retail politics. I sense it is in that spirit that Murphy wants to turn foreclosures, in the midst of thriving working, middle and upper class neighborhoods, wants to solve the "foreclosure crisis" or "lack of affordable housing crisis" but his "plan" would risk turning any foreclosed property into a mini-ghetto.

Murphy puts forth his "housing rescue" plan (actually a rehash of a twice-vetoed "foreclosure residential transformation" bill passed by New Jersey's Legislature earlier this decade) on his campaign website. It reads:

Murphy said he would aggressively pursue the state's fair share of Wall Street mortgage settlement funds to launch a program in which the state would purchase foreclosed homes and partner with qualified nonprofits to repurpose them as affordable housing.

"Affordable housing"? 

In plain English, folks, that means a little housing project, for a whole bunch of people who otherwise can't afford (or do what it takes to earn a living sufficient) to live in your neighborhood.

As for your home values, they're likely to crash. Moving people "who can't afford 'affordable housing' " may be great to get the approval of the brie-cheese-and-caviar intelligensia, but it isn't good for the property values of the neighbors of the new mini-project.

That's because people who can move out of the ghetto, get the hell out of them and they do not ever look back. There's no conga line of people lining up to buy homes right next to housing projects -- er, sorry, "affordable housing." Why is that? It's because public housing contains some of the worst people you would ever want to have as neighbors. The mentally ill, the drug-addled, and plenty of criminal elements.

Turn a foreclosed mini-mansion into "affordable housing," and you'll have more "for sale" signs than dandelions very quickly. 
FLASHBACK: How "Foreclosure Relief" Hurts The Poor. Eric Dixon's 2012 analysis on a disastrous foreclosure relief plan which passed New Jersey's legislature, not once but twice!
It's also because public housing was originally sold to the electorate as an absolute last housing option for those with no other choice except homeless shelters or a cardboard box outside. It was not intended to become permanent low-income housing, which is precisely what it's become across America. (Ask yourself whether its original proponents knew all along what would happen, and purposely stayed silent.)

Some very good houses in upper and middle-class areas fall into foreclosure when disaster strikes their owners. It could be a medical emergency of which the cost outstrips the insurance coverage. 

Under the Murphy plan, those homes would become a great opportunity to turn a big house into a multi-unit "affordable housing" development, or a drug rehab center, or a property for some other "noble purpose."  

If the home equity you've built over decades of responsible ownership gets wiped out, well, you're a homeowner so you are one of the "rich." It might be more intellectually honest to simply come out and say the following: It serves you right. 

Why would any politician advance such a plan? Maybe it's because the politician doesn't understand basic economics. Some of our elected leaders do not understand basic supply and demand. Many others are disdainful of economic cause and effect. But why would Murphy, who is clearly a smart guy -- a former Goldman Sachs executive who actually omits any reference to this on his campaign website -- push this plan?

He understands the economic forces at work. He also understands the political forces which make him make a choice between the Leftist or "progressive" votes he thinks he needs, and the homeowners whose votes he believes he can take for granted. 

In making such a choice, politicians like Murphy are pandering to the mob of Gramsci (i.e., cultural) Marxists who envy, hate and want to hurt anyone else who's "got more." To these real deplorables who believe in political or cultural Marxism, anyone with a home may be branded as morally inferior, evil incarnate, and thus the ends justify the means.

If they cannot confiscate your property -- which I believe will be the end goal -- they can try to reduce its value. 

Confiscation and destruction of private property has often been among the first actions of totalitarian regimes upon seizing power. This attitudinal shift is laying the groundwork for future generations to come to believe those actions would be totally reasonable, acceptable and legitimate. 

Private property, after all, is the crime in their eyes. So these "foreclosure relief" measures are really just an attack on private property. The strategy is to attack the value, your value, your wealth, and by extension, your work, effort and sacrifice for all these years.