GUEST COLUMN: Why do some Democrats want to make Bezos even richer? | Guest Columnists

What no one seems to be talking about, though, is how some of the Democrats co-sponsoring anti-trust legislation simultaneously want to pass new rules and regulations that would make companies like Amazon stronger and richer than ever.

Sen. Dick Durbin (D-Ill.), who happens to be a co-sponsor of the American Innovation and Choice Online Act, has been pushing a proposal behind the scenes in Congress to put new rules and regulations on credit cards. Durbin and other supporters, like the Merchants Payments Coalition, talk about small businesses, let’s be honest here, the biggest beneficiaries will be the massive retail companies like Amazon and Walmart. The money these companies save, thanks to federally mandated price controls, can be reinvested into the business and used to take market share away from the very small businesses that Durbin claims to want to help.

During the pandemic, local small businesses were able to pivot to online sales, which helped many survive. Unfortunately, roughly 200,000 small businesses closed as a result of COVID during the first year of the pandemic. While those small businesses were struggling, Amazon soared to new heights. In 2020, the company pulled in nearly $400 billion in revenue. How much richer do Durbin and his Democratic colleagues want Jeff Bezos to be?

This is one instance where we don’t have to guess at a potential policy’s outcomes; we have a case study. In 2010, Durbin was able to introduce and pass nearly identical price controls and routing regulations on debit cards as part of the massive Dodd-Frank banking bill. Supporters claimed that retailers would be able to charge lower prices and consumers would see great benefits.

What actually happened? Prices did not go down. In fact, some retailers increased prices in response to the original Durbin Amendment. Banks were forced to cut back benefits that had been subsidized by interchange fees on debit card transactions, like free checking accounts and rewards programs. Even financial institutions that were supposed to be carved out and exempted from regulations felt the effects and were forced to make changes. Durbin’s original policy ended up costing consumers about $160 per year and the number of Americans without a checking account increased by about a million.

Why would anyone expect a different result this time around? Consumers will lose access to credit cards with no annual fee. Rewards programs, which are a $50 billion a year value to consumers, will be significantly reduced or cut entirely. Low-income and minority communities will be hit particularly hard by these regulations.

This proposal is yet another costly liberal policy solution that puts government in the way of our free-market economy. In just over a year of Democrat control of Washington D.C., inflation is rampant, store shelves are empty and our economic recovery is slowing down. Iowans simply cannot afford anymore of these heavy-handed liberal policy solutions.

If Durbin and his progressive allies, like Sen. Bernie Sanders (I-Vt.), are serious about increased competition and cracking down on big tech companies like Amazon, they should abandon this proposal. They can’t have their cake and eat it too.