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Govt vs. Innovation.

A few years ago author Jonah Goldberg wrote, “The notion that big business and big government are at war with one another is one of the great enduring myths of the 20th century.” It is a frequent theme in his writings. But it’s a difficult message to get across, to get people to unlearn the “trustbusting” fable they’re taught so young in life. When you read the evidence and history of it, and see the real examples of it today, it makes sense: what big industries fear the most isn’t government or regulation, but competition. It’s not universal, of course. Sure the general feel from the insurance industry is opposing Obamacare, but your biggest companies, like a Humana or a United Healthcare, will be able to absorb the costs — in large part by passing them onto you, the consumer — while the smaller companies will either close up shop or seek to be acquired by a bigger company. There’s a reason why General Electric, which owns NBC, which you’re reminded of during the “green logo” week, had for so long injected itself into the politics of global warming — oh, excuse me frozen northeast, climate change — it’s GE that’s manufacturing those ridiculously expensive light bulbs (the ones that can give you horrible mercury poisoning).

Goldberg saw it thus:

“Big Steel actually sought out government regulation because it feared free-market competition. During the New Deal, FDR supposedly carried on his (distant) cousin Teddy’s crusade against the “malefactors of great wealth.” But the truth is that big business often welcomed government regulation. Clarence Darrow, surveying the National Recovery Act’s record, found that the keystone agency of the New Deal had served only to help big business.

What progressives, then and now, always fail to recognize is that the more government meddles in business, the more business meddles in government. The left thinks the rational response to the bear hug that business has around government is to hug back twice as hard. The real answer is to let go, let companies sink or swim. Don’t render them “too big to fail” because they provide health care or other benefits.

All of these people who want to “crack down” on big business are simply inviting companies into the tent, giving them incentives to buy politicians, votes and policies.”

Here’s a more recent example of an entire industry happily getting into bed with the government in order to destroy an up and coming business model that threatens its bottom line (from the WSJ):

“In a recent New York Times NYT opinion article, New York Attorney General Eric Schneiderman acknowledged that technology moves at a faster pace than laws can keep up. But instead of waiting to see if new rules are needed, he argues: “The only question is how long it will take for these cyber cowboys to realize that working with the sheriffs is both good business and the right thing to do.”

Mr. Schneiderman has targeted Airbnb, an online service that lets users easily rent homes or apartments for short-term stays, giving travelers a new option. The hotel industry, concerned about being disrupted, is lobbying hard to kill the upstart. Mr. Schneiderman went to court demanding the names of people who rent out their homes to see if they violate any laws. Airbnb objects to this fishing expedition. With a valuation in the billions, the Silicon Valley company can afford lawyers to protect its customers, but costly regulatory overreach will inevitably suppress new startups from trying to compete.

Like Airbnb, mobile-phone app Uber creates a marketplace directly linking buyers and sellers—in its case, passengers and drivers—outside the ornate regulations of analog-era municipal taxi commissions. Brussels, Seattle and Miami have banned or strictly limited Uber cars. New York’s Mr. Schneiderman objects to the company’s practice of pricing more when demand is heavy. The alternative is severely restricted supply, as anyone knows who has tried to hail a cab in the rain.

The drone industry in the U.S. has been grounded because the Federal Aviation Administration has banned commercial use of drones pending new regulations. Meanwhile, countries such as Canada and Australia encourage drones. “As American regulators struggle to come up with a rulebook for the fast-moving industry,” Toronto’s Globe and Mail bragged recently, “Canada has emerged as perhaps the center of commercial drone technology—from Ontario farmlands to Alberta’s oil sands.”

Other examples include the Food and Drug Administration’s scrutiny of 23andMe’s marketing, which forced the company to stop offering health data from its at-home $99 genetics-analysis kit, and prohibitions against selling self-driving cars, which have left the U.S. in the dust behind less regulated Europe.”

Note the pompousness of Attorney General Eric Schneiderman. Anyone who dares not succumb to the will of almighty government and outdated business models are “outlaws.” Amazing. While the Internet was for its first decade the last bastion of a true free market — free from government intrusion prematurely stifling innovation — those days are ending quickly. That’s a bad thing.