"Empower" how? Subsidies? If you enact subsidies, then you create an environment in which somebody has the incentive to aggregate the subsidy - in a large business. That's agricultural policy in the US for the last hundred years in a nutshell.
I agree directly subsidizing businesses is foolish, in part for the reason you cite. I think there are lots of infrastructure-like things that could be provided, including healthcare. There is clearly something broken in US healthcare. It doesn't function as useful market for individuals and small businesses. There's clearly something screwy with the economics of it.
You can have the last word. I have to go sell my car.
It became broken as a side effect of wage control regulations during WW2 that encouraged healthcare to be tied to employers. The second world war is long over but this particular unintended consequence is still with us.
Not so much two-party adversarial politics so much as big business and the 0.01% funding and controlling the two viable parties. The center-right party and the right party used to compromise. The system wasn't always this dysfunctional but one party has been hijacked by fringe groups who refuse to compromise.
This is a problem for large political units going back to at least the Roman Empire.
The government should be doing everything it can to empower small businesses. It isn't because of two-party adversarial politics, however.