The U.S. economy may be hitting another "spring swoon," the same way it has for the past several years.
A slowdown from the economy's already slow rate of growth would not be surprising given the impact of the "sequester" and tax increases that went into effect earlier this year. These moves trimmed government spending across the board and increased taxes on most Americans
Not surprisingly, the sluggish economy has led to increased pessimism among American consumers. According to a new Associated Press-GfK poll, only one in four Americans expects their financial situation to improve over the next year. And only 46% of Americans now approve of President Barack Obama's handling of the economy.
The government certainly bears some responsibility for the state of the economy. The sequester, especially, was widely viewed as bad policy, and many economists thought it was not only unnecessary but would hurt the economy.
But much of the blame for our weak economy also lies with the private sector.
The profit margins of big American corporations now have hit all-time highs. Meanwhile, when measured as a percent of the economy, the employee wages paid by these corporations have hit an all-time low. Unemployment, meanwhile, remains depressingly high.
In other words, when it comes to squeezing out as much profit as possible from every dollar of revenue, American corporations are doing spectacularly well.
But in terms of paying their employees generous wages, and, thereby, contributing to the financial health of the middle class and increasing consumer spending capacity, corporations are falling down on the job.
When it comes to putting Americans back to work, the private sector has more ability to help the economy than the government does. To get the economy cranking again, America's big corporations need to start investing and hiring aggressively and paying employees more. This might lead to temporary profit-margin declines. But by putting more Americans back to work (and paying more money in their pockets), it should also create additional consumer spending power. As a result, it should eventually translate into revenue growth and more rapid economic expansion.