Big businesses often lobby in Washington for stricter federal control of their industry, knowing that smaller competitors will have a harder time bearing the burden of regulation. Election 2008 has shown us that the same thing works in politics: Big parties and leading candidates support “campaign finance reform,” knowing that it will crush any startup political movements or parties.

Unity ’08, a self-described centrist group led in part by Vermont’s former independent Gov. Angus King, was hoping to challenge the dominance of the two major parties in the 2008 election. But their plan to nominate a “bipartisan” or independent presidential ticket while providing an unprecedented level of direct democracy in the nomination and platform process died this week. It crashed into a huge barrier to entry known as McCain-Feingold and the Federal Election Commission.

Unity ’08 to date has operated as a “527” committee, which means it can advocate on issues or mobilize voters, but may not directly campaign for or against a candidate. In exchange for eschewing direct politicking, a 527 can accept unlimited donations and is not under the jurisdiction of the FEC. Considering Unity ’08’s express purpose to field a candidate for president, however, the FEC ruled it was a political action committee, subject to FEC scrutiny and the $5,000-per-donor congressionally imposed limit on contributions.

One alternative for Unity ’08 would be to become a party, but it would still be limited in the size of contributions it could accept, thanks to the 2001 McCain-Feingold bill, which, among other things, banned “soft-money” or very large contributions to political parties.

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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.

In politics, McCain-Feingold has protected the Republican-Democrat duopoly. The law made it much more difficult to build a party. In a freer, pre-“reform” political market, Republicans and Democrats had built up huge donor databases and immense incumbent advantages. Then the bipartisan “reformers” led by John McCain passed regulations making party building more difficult.

If Unity ’08 had become a party this year, McCain-Feingold’s limits meant the new party would have had to find millions of donors, all without the advantages of incumbency or a donor database built over decades. As a PAC, the climb would have been even steeper. Unity ’08 decided this was impossible, so now the parties of John McCain and Russ Feingold face one less competitor.

Ironically, one of Unity ’08’s central aims was “to break the dependence on big money.” But only by access to “big money” could the organization have competed with the major parties, and McCain-Feingold — precisely the sort of bipartisan, reform-minded, get-money-out-of-politics legislation Unity ’08 talks about -- had basically outlawed big money.

We still might see a third party run in 2008, but the name most mentioned is New York Mayor Mike Bloomberg, the 25th-richest man in America. As with Ross Perot in 1992 and 1996, Bloomberg is qualified to run for president in large part because he is worth $11.5 billion. Unity ’08’s idea was to democratize the nomination of an independent candidate through a direct Internet primary. McCain-Feingold has pushed us in the opposite direction: You can only run for president if you’re chosen by one of the two major parties or if you are one of America’s 25 richest men.

Unity ’08 was probably not going to pick our next president, anyway, but now it’s completely out of the way thanks to John McCain and his bipartisanship. Coke and Pepsi should be taking notes.

Examiner columnist Timothy P. Carney is senior reporter for the Evans & Novak Political Report.