Krugman on Barro
The problem that Paul glosses over is that correlation does not imply causation. Paul appears to jump to the conclusion that this correlation establishes that the the business cycle is the driving force behind investment spending. But it could just as easily be the opposite (or a third factor driving both). I am completely confused as to why Paul thinks this graph establishes much of anything at all.
I should note, as an aside, that Robert is the second most cited living economist. That fact does not imply that everything he says is correct. (And indeed Robert and I disagree often in Harvard seminars.) But it does suggest that one should not be so glib in summarily rejecting his point of view.