Reihan Salam
The Daily
Whenever corporate America thrives and Main Street struggles, we hear loud calls for regulations to “curb the power of profit-hungry American firms,” said Reihan Salam. But “anti-corporate” regulations actually protect business giants from scrappy start-ups. Their practical effect is to make many large corporations more powerful and less innovative, by blocking upstart competitors from entering the market. Onerous patent protections kill new tech companies before they get off the ground. The FDA keeps big drug companies afloat by keeping new innovators in “regulatory hell.” Small businesses die on the vine thanks to licensing restrictions. “These regulations are a moat that surrounds corporate America.”
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Right now, many big firms have chosen to stockpile their profits rather than reinvest in the U.S. economy. Lawmakers should lower the barriers to entry and force these firms to face their competition head on. If that happens, “lounging timidly on a mountain of cash will no longer be an option.” When we stop inhibiting start-ups, we’ll see a healthier economy.
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