James Madison Warned us the Morbidly Rich Are the Greatest Threat to our Republic

Madison wasn’t talking about an abstraction or some highfalutin concept. He was talking about how some rich people will inevitably try to seize political power to screw everybody else.

Image by Gordon Johnson from Pixabay

Republicans don’t even try to hide it anymore.

Amazingly, the House managed to pass a piece of legislation Wednesday that both helps hungry kids and gives a boost to businesses that want to invest in future products. It was a compromise and neither side is ecstatic, but both Democrats and Republicans got something for their constituents.

Democrats got to lift 400,000 children and their families out of poverty, and the legislation will immediately carry an additional 3 million kids from “deep poverty” to mere poverty with an expanded child tax credit. Over the next year, reports the Center on Budget and Policy Priorities, the legislation will help over 16 million children growing up in low-income households.

That means those kids are more likely to grow up as healthy, well-adjusted, and productive members of society. Science tells us that reducing child poverty this way means there will be less child abuse, fewer divorces, and a healthier economy.

It could, in fact, save America as much as a trillion dollars a year or around 5.4 percent of GDP, which a groundbreaking 2018 study found was the cost to America of childhood poverty. Researchers at Washington University in St. Louise found that adults who experienced poverty during their childhood earned a total of $294 billion less in 2015 than their otherwise identical peers who did not experience poverty as kids.

Add that to the poverty-related costs associated with crime, child maltreatment, and homelessness and the researchers concluded that child poverty is costing the US an estimated $1.0298 trillion every year.

From the GOP’s viewpoint, the legislation’s corporate tax breaks would be a boon to American business. They encourage companies to invent new products with expanded research and development tax breaks, interest deductions, and tax credits for investing in new equipment.

Win-win, right? Sadly, no, according to some of the most powerful Republicans in the country.

The legislation is now heading to the US Senate, where Senator Mitt Romney, one of the richest legislators in the world, opposes it because, he suggests, helping out hungry kids will make them dependent on the government. The last thing Romney wants the government to do is take money from morbidly rich people like himself to lift poor kids out of misery.

The legislation’s help for the very poorest children in our country is, Romney says, “excessive,” and, he whines, creates “another entitlement program which is massively expensive.”

Romney, of course, should know all about entitlement programs: he’s worth hundreds of millions because, in no small part, of massive entitlement programs for morbidly rich people who run private equity operations.

They include “pass through” provisions that let them pay about half the normal income tax rate most Americans are hit with, zero-taxes on profits through Section 1202 of the tax code, and massive tax breaks through the QSBS provisions of the tax laws that billionaires’ lobbyists helped write.

“Massively expensive” doesn’t begin to quantify the largesse, the trillions of dollars, that regular taxpayers like you and me (and low income workers) shower on the morbidly rich like Romney. As the Peterson Foundation notes:

“In 2023, those breaks totaled about $1.8 trillion. To put that in perspective, that’s more than the government spends on Social Security, Medicare and Medicaid, or defense.”

But, still, Romney can’t stomach the idea that poor kids may make off with any of that government largess.

Neither, apparently, can the billionaires who fund Senator Chuck Grassley. As Democracy Labs pointed out yesterday, three of the wealthiest men in America fund the senator’s PAC and all benefited hugely from Trump’s tax cut for billionaires. And, as Democracy Labs noted:

“If only poor families could make big donations to Chuck Grassley, maybe he'd support the Child Tax Credit bill?”

Which perfectly captures the crisis of American capitalism and democracy we’re living through right now. After five corrupt Republicans on the Supreme Court took millions in gifts from billionaires and then legalized political bribery with Citizens United in 2010, most rational lawmaking has ground to a halt as special interest groups and rightwing billionaires pull the strings of Congress.

James Madison, the “Father of the Constitution,” warned us about this. Repeatedly.

When Alexander Hamilton finally talked him into co-writing the Federalist Papers with him (after 4 others turned Hamilton down or were ill), Madison focused his first contribution, what’s today known as Federalist 10, on how a group of rich people capturing government was the greatest threat to our republic.

“Among the numerous advantages promised by a well constructed Union,” he wrote in his first sentence, “none deserves to be more accurately developed than its tendency to break and control the violence of faction. The friend of popular governments never finds himself so much alarmed for their character and fate, as when he contemplates their propensity to this dangerous vice. …

“The instability, injustice, and confusion introduced into the public councils, have, in truth, been the mortal diseases under which popular governments have everywhere perished; as they continue to be the favorite and fruitful topics from which the adversaries to liberty derive their most specious declamations.”

So, what is a faction?

“By a faction,” Madison wrote, “I understand a number of citizens…who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.” (emphasis mine)

“Adversed” being the word used back at that time to describe what we would mean today if we use the word “opposed.”

Factions, in other words, were groups of people who were openly and nakedly opposed to what was best for the nation because it might interfere with them getting richer and richer. And he saw them as the greatest danger this country faced.

Madison wasn’t talking about an abstraction or some highfalutin concept. He was talking about how some rich people will inevitably try to seize political power to screw everybody else. How, as he wrote, their own personal, selfish “interests” are opposed to the “permanent and aggregate interests of the community.”

“Property” today generally means land, but in 1788 it meant “wealth.” Madison came right out and said, in Federalist 10, that the interests of those with great wealth are typically very different from the interests of average Americans:

“But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society.”

In fact, he said, one of the most important jobs of government is to prevent its own corruption by the very wealthy and powerful factions that today control the GOP:

“A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation....”

Madison said in a 1788 speech that there were “two cardinal objects of Government, the rights of persons, and the rights of property.” He added that if only the rights of property were written into the Constitution, the rich would ravage the few assets of the poor.

“Give all power to property,” Madison said, “and the indigent will be oppressed.”

In fact, Madison noted, all the former republics that he had studied in his five years of preparation for writing our Constitution had ended up corrupted by the political power of concentrated wealth.

“In all the Governments which were considered as beacons to republican patriots and lawgivers,” he added, “the rights of persons were subjected to those of property. The poor were sacrificed to the rich.”

Thus, wanting to establish a country where the rich didn’t end up running it as their own private kingdom or oligarchy, he proposed that the House of Representatives — the only branch elected directly by the people, and every two years at that — should solely have the power to raise taxes and spend federal funds.

And he didn’t want the ability to vote for members of Congress to be limited to those who owned property. When that had happened, in previous governments, as Madison pointed out, “the poor were sacrificed to the rich.” 

“The time to guard against this danger is at the first forming of the Constitution,” he said in his speech. “Liberty not less than justice pleads for the policy here recommended. If all power be suffered to slide into hands [of the rich],” he warned, the American citizenry would “become the dupes and instruments of ambition, or their poverty and independence will render them the mercenary instruments of wealth.

“In either case liberty will be subverted; in the first by a despotism growing out of anarchy, in the second, by an oligarchy founded on corruption.” 

And, indeed, the delegates assembled agreed. Only the House of Representatives, to this day, can initiate the process of raising taxes and spending money.

Madison’s mentor, Thomas Jefferson, agreed. In a 1787 letter to Edward Carrington, Jefferson wrote:

“It seems to be the law of our general nature, in spite of individual exceptions; and experience declares that man is the only animal which devours his own kind, for I can apply no milder term to the governments of Europe, and to the general prey of the rich on the poor.”

In an 1816 letter to Samuel Kercheval, Jefferson explained:

“I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom.”

He added that if we ended up with an oligarchic government that was run, directly or indirectly, by the rich, America’s working people:

“[M]ust come to labor sixteen hours in the twenty-four ... and the sixteenth being insufficient to afford us bread, we must live, as they [poor Europeans] now do, on oatmeal and potatoes; have no time to think, no means of calling the mismanagers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow sufferers.”

So here we have the author of the Declaration of Independence and the man who supervised the writing of the Constitution warning us that rich people would try to rise up and corrupt our government just to expand their own wealth.

They explicitly cautioned us that such a wealthy faction presents the greatest of all possible risks to a democratic republic.

Are we there yet? Mitt Romney and Chuck Grassley sure hope so…