Democrats are the best friends big business every had.

Posted: Oct 13, 2015

contenders at Tuesday's Democratic presidential debate will say they're the toughest on big business. What they won't say is their own policies favor big business, big time. Bernie Sanders, the self-described socialist who's been attracting big crowds and gaining ground on Hillary Clinton in polls, gave a glimpse of this over the weekend, telling "Meet the Press" how he plans to compare "my consistency and my willingness to stand up to Wall Street corporations, big corporations, with the Secretary." Clinton, meanwhile, has been moving rapidly leftward to shore up support among the party's increasingly hard-left base, opposing the Trans-Pacific Partnership trade deal and the Keystone XL pipeline and proposing to break up Wall Street banks, raise the minimum wage, etc. Despite all this anti-corporate rhetoric, the fact is that Sanders and Clinton will be the best friends big business could ever hope for, since their regulatory agenda will invariably help big, established businesses at the expense of small, entrepreneurial competitors. That, after all, is their legacy in the banking and health care industries. Both Sanders and Clinton are big boosters of the Dodd-Frank financial reform. But a recent Harvard study found that the massive regulatory scheme that it imposed has hurt small community banks the most. The researchers found that community banks' share of assets declined in the second quarter of 2010 at "almost double" the rate four years earlier. Another report found that 2,000 community banks and credit unions have closed or merged since 2010. Given that community banks disproportionately serve small businesses, farming and home mortgage markets, this hits more than just the financial sector. "The exponential growth of regulation in recent years is suffocating community banks' ability to serve their small business customers," Doyle Mitchell of Industrial Bank told the House Small Business panel. "Any community banker will tell you that their job has fundamentally shifted from lending and serving customers to struggling to stay on top of ever-changing rules and guidance." The American Enterprise Institute's Peter Wallison found that job creation among small businesses has been virtually non-existent since Dodd-Frank, because "millions of small firms ... are not getting the credit they need to grow and create jobs." Even Sanders and Clinton are complaining that the "too-big-to-fail banks" have only gotten bigger since Dodd-Frank, without explaining that their own policy prescriptions fueled this trend. Consolidation is the name of the game in health care as well, as ObamaCare's costs drive mergers and buyouts in the hospital and insurance industries. There were twice as many hospital mergers in 2014 as there were the year before President Obama signed his signature bill into law. Earlier this year, insurance giants Aetna and Anthem announced plans to acquire Humana and Cigna, respectively, turning the "big five" insurance companies into the big three. Both industries cite ObamaCare's massive new set of rules, regulations, taxes and fees as prompting these mergers. All this is in keeping with the long and terrible history of government regulations. The more intrusive the federal rules, the fewer firms that compete and the more consumers suffer. It happened in both airlines and trucking, which saw an explosion in choice and competition after deregulation. And it happens across the economy. A recent paper from George Mason University's Mercatus Center said, "Regulation has a negative effect on new firm creation and employment growth." The 24% increase in federal regulations from 1998 through 2011 cut new firm entry by 1.2%. Clinton, Sanders and the rest of the Democratic Party like to talk a good populist game. But in the real world, their policies are corporatism at its worst. ;