This is America! How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?
—Rick Santelli, on CNBC
A STRIKING PUZZLE OF THE 2008 financial crisis and the ensuing Great Recession is the very restrained and short-lived public outrage against the financial sector. The absence of public outrage explains why we have focused on the Three I’s—ideology, institutions, and interests—up to this point. The fact that the public did not press for reforms contributed, in our view, to the failure of American democracy in the financial crisis. True, outrage was expressed over the bailouts in 2008. Outrage over his membership in “the friends of Angelo,” a group that benefited from ...