Carney on Campaign Finance “Reform”

Tim Carney continues the fight against cartelization through regulation, in his weekly Examiner column, this time in the political marketplace.

When McCain-Feingold passed in 2001, the media noted that the bill dramatically limited parties’ fundraising abilities. Would this weaken the GOP and the Democratic Party? Not exactly.

Sure, the parties lost some clout vis-a-vis 527s, but thinking in terms of the industry analogy, 527s do not directly compete with the major parties. Other parties are their real competition. Between them, the Democrats and the Republicans have nearly 100 percent market share — a situation analogous to the soda industry.

Imagine if Congress placed burdensome new regulations on cola manufacturing. The regulations might be a pain for Pepsi and Coca-Cola, but in the long run, these two giants would benefit as the government burden crushed their smaller competitors and kept out new entrants. By regulating Pepsi and Coke, Congress would be protecting their duopoly.

Indeed, as Cato’s John Samples has noted, campaign finance “reform” schemes like McCain-Feingold amount to little more than incumbent protection.