Only in it for themselves

Now might be a great time for a reminder as to what corporate Canada has actually done in the face of economic weakness:

Although we have a Conservative government, low deficits and tax cuts, corporations are hoarding cash rather than investing in Canada. So, maybe the Obama administration is not to blame for corporations behaving the same way in the US.

Four months ago, I suggested that low capacity utilization explains sluggish investment. If corporations already have a lot of idle capacity, why invest in adding more capacity? A week ago, Paul Krugman presented the same interpretation for the US.

Corporate tax cuts will be especially ineffective at promoting investment given the overhang of excess capacity. As I argued, it would be better for the government to retain the money and invest it directly.

Which, needless to say, says a lot about what the Canadian Chamber of Commerce is really after in its ad campaign to try to lock in even more corporate tax cuts. Never mind the well-being of the economy, it's all about handing big businesses more cash to hoard - and there's no reason at all why the country at large should agree with that set of priorities.