Insisting on a Wall Street-friendly response to the financial crisis, they bailed out the banks without holding them to account, discredited the Democratic Party in the eyes of many working people, and helped pave the way to Trump. This failure of political judgment was not unrelated to meritocratic hubris. Frank describes a "widely shared view among Democrats that Wall Street is a place of enormous meritocratic prestige, on a level equivalent to a high-end graduate school." Obama deferred to Wall Street in so many ways because investment banking signifies professional status like almost nothing else. For the kind of achievement-conscious people who filled the administration, investment bankers were more than friends—they were fellow professionals; people of subtle minds, sophisticated jargon, and extraordinary innovativeness.

Frank argues that this reflexive respect for investment bankers "blinded the Democrats to the problems of megabanks, to the need for structural change, and to the epidemic of fraud that overswept the business." He cites Neil Barofsky, a former federal prosecutor who served as the government watchdog for the bank bailout, and who wrote a scathing book about what he saw. The book's title and subtitle convey his conclusion — Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street. While it is true that Wall Street executives had been generous donors to Obama's campaign, his administration's gentle treatment of the financial industry was not only political payback. Barofsky suggests a further, meritocratic explanation—the belief among policy makers that well-credentialed, sophisticated investment bankers deserved the massive amounts they were paid. The Wall Street fiction that certain financial executives were preternaturally gifted supermen who deserved every penny of their staggering paychecks and bonuses was firmly ingrained in Treasury's psyche. No matter that the financial crisis had demonstrated just how unremarkable the work of those executives had turned out to be, that belief system endured at Treasury across administrations. If a Wall Street executive was contracted to receive a $6.4 million "retention" bonus, the assumption was that he must be worth it.