International Journal on Criminology Volume 1, Number 1, Fall 2013 | Page 32

Subprime or Subcrime?
the United States Constitution guaranteeing freedom of expression. The agencies were
granted the status of press agencies, rather than financial institutions: offering opinions
rather than providing ratings.
As has become clear, the American federal system never wanted credible means to
deal with waves of white-collar crime on a macroeconomic level. Admittedly, the
diversion effect produced by the “war on terrorism” prevented the American police and
justice system from focusing on the criminals of the upperworld. The American police
and justice system found themselves swamped by a wave of crimes, too numerous and
too opaque, while their manpower was dedicated to tracking down Al-Qaeda as the
hypothetical priority.
The tragicomedy that has been played out on Wall Street for the past 30 years
remains the same: Rogue bankers (banksters) pay lip service to confessing their sins, pay
a fine, promise not to do it again, then reoffend a few years later. What conclusion can be
drawn from this? That impunity serves to encourage repeated offences, both for bank
robbers and a for rogue bankers/financiers. In accordance with the doctrine of “too big to
fail” (financial systems) which has prompted the American federal authorities to save
questionable and interconnected financial institutions, the failure to punish thus
highlights the new reality of “too big to prosecute, too big to jail” (financial fraud): Too
big to prosecute/jail, and consequently both intimidating and extortionate.
Frauds on financial markets are a matter of breathtaking routine, accidentally
revealed in isolated incidents of rare legal cases or systemic crises. It is a kind of
normalization of deviance and crime. This crisis comes from “on high”, just like those
which were once so commonplace in the Third World and were viewed with such
condescension by the West. Published in 2011, the United States Congress’s two
voluminous reports on the financial crisis (hearings held by the Financial Crisis inquiry
Commission, or FCIC15; and work undertaken by Senator Carl Levin) returned a bleak
picture of Wall Street and left no doubt regarding the criminal dimension of this crisis.
Frauds appear to be the common thread explaining the origin of the subprime crisis.
“Madoffified” finance, a trapped system…
The massive fraud (60 billion dollars?) perpetrated by Bernard Madoff—incidentally
revealed as a result of the subprime crisis, like collateral damage—was not an aberration
but rather the symptom of an American finance and economy system in general that had
become pyramid-shaped, as if “Madoffified”. Bernard Madoff simply performed on his
own personal (microeconomic) scale what America had allowed to happen on a large
(macroeconomic) scale for a generation: a pyramid of private debts reeking of fraud. The
same context of blind deregulation incentivizing fraud produced both the subprime crisis
and the Madoff affair; moreover, numerous other fraudulent pyramids subsequently
emerged when the guardians of the temple (financial market authorities, etc.) finally
awoke.
The real question behind this crisis, however, is a political rather than strictly legal
one. Where do such destructive and criminal laws of deregulation come from? Since the
1980s, the powerful Wall Street finance lobby has been able to literally and legally trap—
in fact purchase—a large part of the American political class, followed by Washington’s
institutions.16 The now astronomical costs of electoral campaigns mean that the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
15. The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of
the Financial and Economic Crisis in the United States (Public Affairs, 2011).
16. Galbraith, The Predator State, Op. cit. Also: Simon Johnson and James Kwak. 13 Bankers: The
Wall Street takeover and the Next Financial Meltdown (Pantheon Books, 2010).
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