The rapid growth of the U.S. financial sector—a process known as “financialization”—has been fueled by massive government subsidies. In particular, the regulatory system enshrines a highly unstable business model based on extreme leverage and protects it with a mix of explicit and implicit safety nets. The result is a bloated, inefficient financial system vulnerable to cataclysmic meltdowns and plagued by chronic misallocations of resources—and huge windfalls for financiers who pocket gains from excessive risk-taking while leaving losses with taxpayers.