The system as designed by the Framers was in place for a century and a quarter, from 1789 until 1913, when the Seventeenth Amendment was adopted. As originally designed, the Framers' system both protected federalism and ensured that relatively few benefits would be provided to special interests.
The Cloudy Reasons Behind The Seventeenth Amendment
There is no agreement on why the system of electing Senators was changed through the enactment of the Seventeenth Amendment. But there is widespread agreement that the change was to the detriment of the states, and that it played a large part in dramatically changing the role of the national government.
Before the Seventeenth Amendment the federal government remained stable and small. Following the Amendment's adoption it has grown dramatically.
The conventional wisdom is that it was FDR's New Deal that radically increased the size and power of federal government. But scholars make a convincing case that this conventional wisdom is wrong, and that instead, it was the Seventeenth Amendment (along with the Sixteenth Amendment, which created federal income tax and was also adopted in 1913) that was the driving force behind federal expansion.
One other thing happened in 1913. The Federal Reserve received its charter. In order for the Fed to have the full backing of the government, the government must have the power to tax the people. I'd like to remind people that there was no federal income tax until 1913. There was no Federal Reserve, quasi governmental private bank that pays a 6% dividend to the share holders, which is not federal and has no reserves. And there was no 17th Amendment snatching power from the states. There had not been a central bank in America since 1835 when Andrew Jackson kicked their sorry asses out. Who is the puppeteer?
The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
http://www.federalreserve.gov/generalin ... qfrs.htm#5
Who owns the member banks, and what is 6% on trillions of dollars? Nothing to see here cause it's all "not for profit". One other point, the Bankers swore that they could handle the economy better than free markets, and that they would put an end to recessions and depressions. Fine job they did.