An article by Jay Cost at the Weekly Standard describing the Republican party's role in creating the current system of crony capitalism:
The modern Republican party is a marriage of convenience. The ideological similitude between its constituent groups is stronger than among the strange bedfellows of the Democratic party. But still, there is a tension. Grassroots conservatives support business because they believe that free enterprise is the best way to establish broad-based prosperity and individual liberty. Blaine-style Republicans support business—full stop.
And this is why you see Republicans in Congress so often doing things that Republicans in the heartland oppose. Immigration reform—with its massive amnesty as well as a huge increase in the number of legal immigrants—is good for business owners but bad for lower income workers struggling to rise to the middle class. Grassroots conservatives and their allies in Congress opposed it. But Republican politicians more in the Blaine mold were amenable to it.
Ditto Ex-Im [Export-Import Bank]. It is one more instance of the divide between conservatives and the Blaine faction. And the news last week shows you who is still in charge.
What is so troubling is that Blaine-style Republicanism has precious few followers, and virtually none outside the Beltway. It sustains itself primarily via a logroll between connected industry groups who buy their way into the process. Again, the farm bill is illustrative. House Republicans—at the height of their reformist zeal—basically killed farm subsidies in 1996. But they slowly brought them back. Was there a compelling reason for this? Of course not. It was the subtle operation of scores of interest groups over time that pushed the congressional GOP into buckling, which it did most recently in the winter with a massive new payoff.
... Currying favor with special interests at the expense of the public good is a way for politicians to fund their campaigns and secure their future for when they leave government. It has been firmly enshrined as the primary source of money for politics since the Sherman Act did away with patronage. So long as politicians are able to tap special interests for these purposes, they will find ways to reward them with public policy—and they will do whatever it takes to protect the programs they have already put in place. What reformers really need to do first is attack the way the business of politics is conducted, rather than focusing on the products of that business. Then, and only then, will the cancer of cronyism be removed from the body politic.