Why Big Business loves Big Government: It crushes smaller competitors 

President Obama, together with Banking Committee Chairman Chris Dodd (D-Conn.), like to paint their regulatory push as a battle against the “Titans of Industry,” but it may be more a battle against the Rank-and-File of Industry.

BigGovernment.com reports:

Many of those familiar with the banking industry, overall, say that community banks bore little to no responsibility, on balance, for the financial meltdown that occurred in 2008.  Nonetheless, an analysis of the Dodd bill indicates that if it passes, community banks will be subject to a whopping 27 new regulations that one individual who has worked with banks professionally and is closely tracking the legislation says “could threaten to put many community bankers out of business, thus reducing competition in the banking sector overall, and diminishing consumer choices.”

That individual further asserts that while the bigger, Wall Street banks will likely be able to adapt to the bill (though their efficiency and ability to compete internationally could take a knock), the community banks will not—potentially making the system more risk-prone, also.

Others are reporting on this crucial, fairly intuitive, but largely ignored point — Big Business can adapt to more regulation better than small business can. Politico reported last week that the big banks “have the legal resources to deal with a consumer agency.”

Big business lobbying for more regulations that will crush smaller competitors is fairly common. Wal-Mart has endorsed higher minimum wage and an employer mandate on health-insurance. Mattel, the world’s largest toymaker, lobbied for the draconian Consumer Product Safety Improvement Act. Big food corporations have embraced stricter federal food regulations — both presently, and back in the “Progressive Period.”

It’s a loss for consumers who now have fewer choices and more prices. It’s a win-win-win for Big Business. They get protective regulation, they get credit from the media for being so progressive, and they make friends with the politicians who are pleased at getting more power.

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Timothy P. Carney

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