Economic cycles are by definition impossible to flatten. This is particularly true after a recession where conventional patterns have been unceremoniously dumped, as David Smith points out in The Ins and Outs of Ups and Downs (p72). But the spectacular weakness of corporate investment during the last recession is particularly worrying. It was left to the timid and naive consumer to pull the economy out of recession - small wonder that the recovery was so patchy for so long.
Apologists for the corporate sector can cite many reasons: the investment boom of the late '80s meant that there was little need to create extra capacity as the recession began to relent; indebted companies rightly preferred repayment of borrowings to capital investment; the banks signally failed to attempt to discriminate between rescue funding and genuine investment opportunities.
The suspicion nevertheless remains that business leaders haven't been leading. The downside of investing too early is substantially less than that of investing too late. Market share can most easily be captured in a weak market. The opportunities to export products manufactured at marginal cost as the UK economy recovered ahead of our European neighbours were ignored.
Part of the job of management is to try to get the timing right. This is not achieved by focusing exclusively on the present, nor by always looking to others for a lead. Economic cycles will never be flattened, but good managers must attempt to take advantage of the opportunities that cycles generate as well as managing the problems they create.