Factions are special interest groups that want to manipulate the system of government for their peculiar benefit. James Madison’s Federalist Paper No. 10 talks about this in some detail. One of the things Madison writes is that he recognizes this as a serious problem. All legislatures tend to be corrupted by factionalism (i.e., special interest groups) getting legislation passed for their particular benefit, not the general welfare. And Madison suggests that one way to break the control of the power of factions is to have such a large republic that there are so many factions that no one of them or small group of them can gain power. What Madison forgot was that all the factions might agree among themselves to divide the loot. In other words they might be smart enough to realize that they shouldn’t fight among themselves and they can make a deal, as long as they are looting us. At that point we will get the system that we now have.
In The Federalist No. 10, James Madison pointed out that,
“[a]mong the numerous advantages promised by a well constructed Union, none deserve 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. * * *
By a faction, I understand a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.”
Madison then went on to point out what he considered egregious forms of factionalism, starting with “[a] rage for paper money”. This passage seems to have been penned for the Federal Reserve System and “the financial community” of which it is the cornerstone. For no one can possibly deny that this edifice of financial chicanery serves one very narrow set of very special, very selfish interest groups, largely at the expense of everyone else in society. Neither is it deniable that, together with its satellites and clients, the Federal Reserve System holds the entire country hostage to “the financial community’s” negligence, incompetence, venality, corruption, and even criminality. For, if the System is not exonerated and “bailed out” repetitively from the consequences of its managers’ and clients’ own blunders and sordid excesses—as it has been, serially and under conditions of increasing severity and cost, since 1933—its managers and clients threaten, either implicitly or even volubly as they did before the TARP “bail out” in 2008, to take down the entire national economy, and with it this country as a whole, bringing about untold political and social dislocations, disturbances, distress, and destruction. This is the essence of malignant factionalism.