Juggling Dynamite

As China’s manufacturing contracted for the 4th consecutive month in April, the OECD has lowered its global growth forecasts yet again for 2014, and major investment banks are now slashing their Q1 US GDP growth forecasts into negative numbers. Although creative accounting and share-buybacks on debt (longer-term suicidal) have managed to keep profit growth advancing in the short term, earnings growth is still slowing and sales trends are looking bleaker still.

Sure there are now about 1645 billionaires in the world (double the number from 2006), but magic accounting aside, companies and economies still do need customers from the other 99.9% of the world, it turns out. Who would have thunk that was necessary?

Meanwhile cash strapped Americans (who are still the wealthiest households in the world don’t forget) are busily redeeming funds from their incredibly meager retirement savings to make ends meet.  See: Early tap of 401(k) replaces homes as American piggy-bank.

The Internal Revenue Service collected $5.7 billion in 2011 from 401(k) early redemption penalties, meaning that Americans took out about $57 billion from retirement funds before retirement.  This is not a sustainable solution though as funds are extremely limited and spending now simply means less spending capacity later:

“The median size of a 401(k) is $24,400 as of March 31, with people older than 55 having $65,300, according to Fidelity Investments. Those funds can disappear quickly in retirement, and the early withdrawals indicate that the coming retirement crisis could be even more acute than expected.”

The tolerance and forbearance on corporate criminals the past 7 years has been shocking, brazen and completely indefensible. This period will be recorded in history as an epic failure of justice and the Rule of Law. Figure heads like Holder, mouthing empty words about principles, are hypocritical and incendiary as corporate criminals continue to stand protected behind their companies and “cost of doing business” settlement cheques. No society or individual who values democracy, fairness and merit can afford to accept this pattern of empty words and corporate impunity.

Attorney General Eric Holder discusses the Department of Justice’s belief that no company, no matter how big, is above the law, including the big banks. “No individual or company,” he says, “is above the law. Here is a direct video link.

CNBC’s first-ever Millionaire Survey reveals that 51 percent of American millionaires believe inequality is a “major problem” for the U.S., and nearly two-thirds support higher taxes on the wealthy and a higher minimum wage as ways to narrow the wealth gap. Those who identified themselves as Republicans however, were less interested in paying more than Democrats. Here is a direct video link.