This week five corporations, including BP and ConocoPhillips, dropped out of the US Climate Action Partnership (a.k.a. USCAP, with an emphasis on the ‘CAP’) an industry lobbyist group that sought to mollify the most aggressive instincts of ‘green’ and government organizations while at the same time advance the environmentalist agenda. USCAP’s membership is chock full of corporations that will not benefit from cap and trade laws, yet they lobbied for them. One might assume that five brave corporations saw that global warming is more political than science based, and they made a principled stand by dropping out of USCAP. The real reason is more pedestrian, and a little sad. Why these companies joined and subsequently left USCAP goes a long way to explain the psyche of corporations.

USCAP is based on the strategy of ‘being at the table so as not to be on the menu.’ Big corporations are easy targets for opportunistic politicians – consider Pres. Obama’s relentless bashing of Wall Street ‘fat cats,’ or the Senate’s grandstanding over cigarette companies’ unhealthy products, or Sen. Hatch’s obsession with punishing Microsoft. Obviously BP has no interest in fossil fuel taxes, and Phillip Morris doesn’t really favor punitive cigarette taxes, but they, and countless other corporations play USCAP’s game because it is better than the alternative – the complete routing and destruction of shareholder value that Microsoft suffered as punishment for standing up to the Government.

Big Corporations ‘sit at the table’ with their enemies for another reason: to stifle competition. The Byzantine red tape that Washington imposes on the free market is easily navigated by multi-billion dollar corporations, but not so by their smaller competitors. The costs of complying with regulations that clog every aspect of the business world disproportionately fall on the shoulders of small businesses and entrepreneurs. For example, Mattel lobbied for a new law that, while imposing some product testing expenses on themselves, effectively outlawed independent toy manufacturers. Mattel even managed to make selling used toys at garage sales practically impossible. The law created and entrenched an oligopoly of big toy manufacturers; not bad for a day’s work in Washington.

Similarly, back when a socialized health care bill seemed inevitable, Wal-Mart came out and supported Obamacare. Why would Wal-Mart, the nation’s largest employer, want the burden of insuring all of its employees? Wal-Mart knew that it had the economies of scale to pay the very least for its insurance, and it owns its own Pharmacies to boot. Of all the employers hit by Obamcare’s mandates, Wal-Mart is best equipped to cope. Wal-Mart didn’t care about people so much as it wanted to suppress its competitors.

Likewise, USCAP’s mission is not to benefit its members by reducing their costs, but to harm smaller competitors more by raising their relative costs. From the formation of AT&T over a century ago, , to blue laws, to the Chamber of Commerce’s statist tolerance of government, regulation always evolves into an incumbent protection racket. The only losers are entrepreneurs and consumers.

Why the USCAP defections? USCAP is falling apart because the Obama agenda is falling apart. Cap and trade is dead with little hope for revival. USCAP’s mission of mitigating cap and trade’s damage to its well-heeled members no longer matters, so its members are dropping off. There was no change of moral compass here, just political calculus.

Similarly, with the implosion of Obamacare, PhRMA recently dumped its CEO, Rep. Billy Tauzin. PhRMA had the same mission as USCAP, but with regard to Obamacare – craft a bill that harms its members less than their competitors. Why continue to pay a Washington big-wig when the issue is comatose and ready for the morgue? Tauzin’s connections and moral flexibility are no longer needed.

Why are companies, especially the larger ones, so spineless on issues that are critical to very existence of the US? Why are corporations so greedy, feckless, and sometimes even evil? Simply because it suits their short term interests. Leftists want to believe that corporations should be good corporate citizens, but it is not in their nature. Corporations will always pursue politics as a way to benefit shareholder value.

Despite the evil corporations sometimes do, there remains no better engine for the betterment of people. The NYSE’s $16.3 trillion market capitalization proves that the corporate structure is the best way to generate wealth and improve everyone’s quality of life. In other words, the corporation is a wonderful source of good, but corporations are sometimes evil. Political opportunists in Washington set up corporate excesses as a straw man to hobble the corporate system and dole out their expensive favors.

Nobody should count on Corporate America to consistently support the cause of capitalism and freedom. The Supreme Court rightly ruled that corporations have the right to political speech, but that does not mean that informed voters should always listen, because corporations are at best a weak ally in the cause of liberty.