A Republic No More. Jay Cost

      

      “In explaining ‘corruption as a permanent, institutionalized feature of our government,’ Jay Cost has made a major contribution to American history and political science. His narrative is detailed and lively, accessible to citizens and scholars alike. And he makes a case for reform while suggesting its limits. A real tour de force.”

      —WILLIAM KRISTOL, editor of The Weekly Standard

      “In a democracy, politics is an openly, indeed exuberantly transactional business: If you elect me, I will do this and that for you. Hence the perennial problem of navigating the vast gray area between licit and illicit promises and promise-keeping. Jay Cost provides a map to the moral geography of modern government. The moral of this dismaying story is that as government becomes bigger, so does the number of transactions that look a lot like corruption.”

      —GEORGE F. WILL

      “Jay Cost makes a strong case that corruption is a systemic and dangerous feature of modern government. His argument, based extensively on the thinking of James Madison, cuts across ideological boundaries. His book is accessible to liberals and conservatives who share an interest in governance for the public good.”

      —THOMAS B. EDSALL, online political columnist for The New York Times

      “Corruption, argues political scientist Jay Cost, is ‘a permanent, institutionalized feature of our government.’ The Constitution, he argues, creates a limited government that is incapable of exercising the wide economic powers officeholders have embraced since the 1790s without rewarding well-placed insiders and auctioning off favors. It’s an original thesis—and a disturbing one.”

      —MICHAEL BARONE, co-author of The Almanac of American Politics

      “Jay Cost . . . seems to have read everything about federal corruption from the early republic to the corporate-friendly ‘Mickey Mouse Protection Act’ of 1998. With A Republic No More he provides a definitive account of Jacksonian grift, Gilded Age graft and 20th-century government giveaways.”

      —DEIRDRE N. MC CLOSKEY, The Wall Street Journal

      “Mr. Cost exhaustively documents the way the American political system, in a repudiation of Madison’s vision for democracy, has fallen prey to a culture of self-interest that distributes resources ‘in ways that run contrary to the public interest.’ ”

      —DAVID WILEZOL, The Washington Times

      “What Jay Cost describes so well about the erosion of the common good is the underlying explanation of why 75% of Americans say that corruption is widespread in government.”

      —NEWT GINGRICH

      © 2015, 2016 by Jay Cost

      Preface © 2016 by Jay Cost

      All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Encounter Books, 900 Broadway, Suite 601, New York, New York, 10003.

      First American edition published in 2015 by Encounter Books, an activity of Encounter for Culture and Education, Inc., a nonprofit, tax exempt corporation.

      Encounter Books website address: www.encounterbooks.com

      The paper used in this publication meets the minimum requirements of ANSI/NISO Z39.48–1992 (R 1997) (Permanence of Paper).

      First paperback edition published in 2016.

      THE LIBRARY OF CONGRESS HAS CATALOGUED

      THE HARDCOVER EDITION AS FOLLOWS:

      Cost, Jay.

      A republic no more: big government and the rise of American political corruption by Jay Cost.

      pages cm

      Includes bibliographical references and index.

      ISBN 978-1-59403-868-6 (ebook) 1. Political corruption—United States. 2. Republicanism—United States. I. Title.

      JK2249.C69 2015

      364.1'3230973—dc23

      2014032671

      This book is dedicated to the memory of Daniel R. McKenzie

      “The stock-jobbers will become the pretorian band of the Government, at once its tool & its tyrant; bribed by its largesses, & overawing it by clamours & combinations.”

      –JAMES MADISON, LETTER TO THOMAS JEFFERSON, AUGUST 8, 1791

      “I decided to get far enough along to be able to control legislation that meant something to men with real money and let them foot the bills. Never commit yourself but always be in a position where you can if you choose. The men with money will look you up then and you don’t have to worry about campaign expenses.”

      –SENATOR BOIES PENROSE (REPUBLICAN, PENNSYLVANIA)

      “We manage our political risk with the same intensity that we manage our credit and interest rate risks.”

      –FRANKLIN REINES, FORMER CEO OF FANNIE MAE, IN A 1999 MEETING WITH INVESTORS

      Contents

Preface to the Paperback Edition

Preface

Introduction “The Violence of Faction”

       Understanding Political Corruption

1 “The Great Desideratum”

       Madison, Hamilton, and the First Bank of the United States

2 “The Spirit of the Nation Forbids It”

       Nationalism and Corruption from Jefferson to Jackson

3 “The General Scramble for Plunder”

       Patronage in Jacksonian America

4 “Permanent and Terrible Mischief”

       Machine Politics in the Gilded Age

       5 “The King of Frauds”

       Business and Politics in the Gilded Age

       6 “To Dissolve the Unholy Alliance”

       The Progressive Response to Corruption

       7 “A Grand Political Racket”

       Corruption in the New Deal

       8 “Clear