International Journal on Criminology Volume 1, Number 1, Fall 2013 | Página 27

International Journal on Criminology––Volume 1––Number 1––Fall 2013
Subprime or subcrime? The criminal dimension of the financial
crises: an astonishing denial of reality
Jean-François Gayraud
Subprime loans were the cause of the greatest financial and subsequently economic
crisis since 1929. In the United States, for example, the social impact was immense
with millions of households suffering repossessions, mass unemployment, the
disappearance of savings invested in the stock market, and a jump in the poverty rate
from 12.5% to 14.3% between 2007 and 2009.
Anesthetic explanations
It is therefore vital to consider the true origins of this tragedy: fundamentally, what
does the term “subprime crisis” mean? All are keen to impose a happy narrative on the
causes of the crisis through explanations which are either fatalistic (cycle theory),
magical (a catastrophe, a cataclysm), or mollifying (market failures). Not to mention the
reassuring reflections of Doctor Panglosses who claim that “this crisis is a roughly
psychological one” (Alain Minc). These denial specialists are often those who were blind
to the growing anomie in financial markets during the boom years (1980/2000). Having
failed to anticipate the crisis (if they did not cause it), they have since been falling over
themselves to conceal their deepest doubts, thus spelling the nearly universal collapse of
academic and media expertise on both sides of the Atlantic.
However, there is another possible diagnosis that reveals the true nature of Wall
Street and a new balance of power in the United States, and more broadly the increasing
autonomy of players on the globalized financial market. In order to understand the hidden
roots of this crisis, we need to think outside the box imposed by propriety. The subprime
crisis was a systemic fraud.1 More than just a metaphor, a criminological approach
reveals the existence of a series of genuine frauds which, rather than simply being
accidents, were in fact symptoms of a system that had become anomic. Ultimately,
American finance has become a vast crime scene. Few financial crises have had such a
clear criminal dimension or critical mass of frauds.2 As always, published opinion—
belonging to the elite with access to the media—is in a hurry to demonize any such
troubling viewpoints by resorting to easy fear-mongering: Conspiracy theories,
scapegoats, distractions, populism. Using crime to explain a macroeconomic
phenomenon may seem derisory, anecdotal, even naïve. However, it is vital for anyone
wishing to explore the roots of a crisis caused by human actions alone. A criminological
reading can pull back the thick veil concealing institutional, extremely lucrative
tartuffery. A crime-based approach also has the advantage of bringing the economy back
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1. For details of this thesis, with accompanying bibliography, please refer to our book: Jean-
François Gayraud, La grande fraude: Crime, subprimes et crises financiers (Odile Jacob, 2011).
Also: Jean-François Gayraud, “Subprimes: Crise innommable, donc incurable. Ou comment
récompenser les fraudeurs,” in La finance pousse-au-crime, ed. Xavier Raufer (Choiseul, 2011).
2. On the history of financial crises and their fraudulent dimension: Charles K. Kindleberger and
Robert Aliber. Manias, Panics, and Crashes: A History of Financial Crisis (John Wiley & Sons,
2005). On the role of fraud in periods of boom: Robert J. Shiller, Irrational Exuberance
(Doubleday, 2005).
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