pot my 31. 2013 Publicly owned companies need to invest By Harold Meyerson President Obama took yet another stab Tuesday at boosting the economy, offering congressional Republicans a cut in the corporate tax rate in return for a $50 billion investment in sagging U.S. infrastructure. That the GOP immediately rejected the deal should come as no surprise. But Republicans should at least be made to stipulate where they think investment in the United States is going to come from. Conservatives' stock answer is that if we just lift regulations and cut taxes on business, if we only get rid of unions and the minimum wage, then corporate investment will flow like a mighty stream. There are all kinds of good reasons to dispute this, but a study by three economists provides proof positive that it is sheer hooey. In late April, John Asker and Alexander Ljungqvist of NYU's Stern School of Business and the National Bureau of Economic Research and Joan Farre-Mensa of Harvard Business School published a study looking at one of the U.S. economy's fundamental disconnects: the gap between profits and investment. Profits now constitute the highest share of the nation's overall output since World War II, while wages constitute the lowest share since then. But profits have also been decoupled from investment. Until the late 1980s, according to the asset manager GMO, profits and net investment in the United States each came to roughly 9 percent of gross domestic product. Today, corporate profits account for 12 percent of GDP, while net investment has shrunk to 4 percent. When Asker, Ljungqvist and Farre-Mensa looked into this anomaly, they unearthed a startling fact: While publicly traded firms devote 3.7 percent of their total assets to investment, comparable privately owned firms devote 6.8 percent. Using a new database that provides more information on more privately held firms than had previously been available, the economists discovered a problem at the heart