There was a time when the US Chamber of Commerce could snap its fingers and get the Republican party to dance. The corporate agenda’s almost total collapse on Capitol Hill in the past few weeks shows how much has changed.

Whether it is their failed drive to overhaul US immigration, modernise US infrastructure, or back a nationwide schools curriculum, business groups no longer get what they want. Crudely speaking, the Republican party used to be an alliance between business and the white working class. The latter could indulge their dislike of modern culture as long as they selected from the country club’s economic menu. George W Bush was its chef. Big highway spending bills were its fare.

That pact is now disintegrating. Conventional wisdom says that big business gets what it needs from Washington — corporate titans have rarely had it so good. Taken as a whole, US companies are enjoying a bonanza. Profits as a share of the economy are at a record high — last seen in the 1920s — while labour’s share is at a record low. Moreover, some of the biggest companies, such as Bank of America and General Electric, navigate the tax system to pay in single-digit rates. If their penalty is to lose the reflexive loyalty of the Republican party, nobody will shed any tears.

As any Fortune 500 chief executive will tell you, the US Congress is doing its level best to reduce investment opportunities in the US. The list of anti-corporate stances by the Republican-controlled House of Representatives is remarkably long

But this is to omit the compelling story that US businesses tell. It is true that many big companies, particularly those with big intellectual property earnings, pay low tax rates. The effective corporate tax rate, as opposed to the headline rate, is about 23pc. But many do pay the full 35pc whack, which is the second highest in the industrialised world. It is also true that US companies are indulging in record levels of share buybacks and dividend payouts, as opposed to ploughing their record cash piles into greenfield investments. For many critics on left and right, this is the epitome of short-termist, shareholder-maximising greed.

They may be right about that. But companies are simply responding to the system enacted by Congress — one that imposes a worldwide tax on US companies and gives breaks to those that keep their profits offshore. Moreover, as any Fortune 500 chief executive will tell you, Congress is doing its level best to reduce investment opportunities in the US. The list of anti-corporate stances by the Republican-controlled House of Representatives is remarkably long.

Congress refuses to raise the petrol tax to return the highway trust fund to solvency. That means ever-deteriorating roads and more bottlenecks for freight. The same applies to infrastructure financing more generally. The Republican House refuses to contemplate immigration reform. That means fewer skilled workers in the US and an ever higher compliance cost on businesses.

The House will not even consider restoring funding for public research and development budgets, which in the past have spawned innovations that have underwritten so many successful businesses, not least in Silicon Valley. Republicans are flirting with closing down the Export-Import Bank of the United States on the grounds that it funds ‘corporate welfare’ for big companies such as Boeing. This is in spite of the fact that other governments are stepping up support for their export credit agencies. It amounts to unilateral disarmament. And it is as far as ever from agreeing to corporate tax reform, which would make life simpler for everyone (by eliminating loopholes and reducing the headline rate).

All of which eats away at the future corporate bottom line. If investment is lower than it should be, growth will inevitably fall. That in turn will shrink profit margins. In recent months both the US Federal Reserve and the International Monetary Fund have lowered their estimates of US trend economic growth to well below 3pc — and in the case of the IMF, to 2pc or lower. Even The Economist magazine, which is traditionally gung-ho on the US, now talks of ‘America’s lost oomph’.

Some businesses blame the administration of Barack Obama, US president, for not showing more leadership. They have a point. But Mr Obama agrees with most of their priorities — on immigration, infrastructure, education reform and so on. It is the Republicans who are blocking them. Groups such as the Business Roundtable and the US Chamber of Commerce, which has held joint events with the AFL-CIO, the traditionally reviled labour union, to lobby for infrastructure spending, speak derisively about Republicans. If this is the business party’s record, then who needs populism?

One of their favourite terms of derision for the Tea Party is the ‘Taliban’. The analogy is particularly apt. Not only do conservative radicals speak in theological terms about the economy, they also bite the hand that feeds them. The relationship between big business and the Tea Party is a bit like that between the Pakistan government and the Islamist group. The latter has its uses — it stops tax increases and keeps the bums off the streets. But at some point the true believers become more trouble than they are worth. Just as Pakistan is sending tanks into Taliban strongholds, big business is losing its patience with Republicans.

Last week I asked the head of one big business lobby whom he would prefer to be the next US president: Hillary Clinton or Rand Paul, the Tea Party libertarian. The answer surprised me. “Oh, Hillary definitely — she is a known quantity,” he said. “Businesses value predictability and Rand Paul’s crowd are a law unto themselves.”

Published in Dawn, Economic & Business, July 28th, 2014