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Foreclosure Stories: Neoliberal Suffering in the Great Recession


This article examines how the foreclosure crisis has been represented in a range of narrative genres: the reportage of Paul Reyes's Exiles in Eden: Life among the Ruins of Florida's Great Recession (2010), Michael Moore's documentary film Capitalism: A Love Story (2009), and Paul Auster's novel Sunset Park (2010).These narratives attempt to contextualize the human beings caught in the center of the subprime mortgage storm, but in the process each of them runs up against an opacity or obscurity, a crisis of representation. The article argues that underlying the financial crisis is an inability to recognize and comprehend deeply embedded structures of inequality, a failure common to both the financial system and the wider culture. Drawing on recent accounts of the techniques of credit scoring and mortgage securitization in the disciplines of business history, accounting, financial management, and human geography, the article concludes that subprime mortgage lending involved social relations of supremacy and subordination, as well as representational strategies which identified individuals solely in terms of credit risk, while failing to grasp the conditions of poverty and disadvantage which constituted them as a class.

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1 Financial Crisis Inquiry Commission, The Financial Crisis Inquiry Report (New York: Public Affairs, 2011), 5.

2 See Wyly, Elvin K., Atia, Mona, Foxcroft, Holly, Hammel, Daniel J., and Phillips-Watts, Kelly, “American Home: Predatory Mortgage Capital and Spaces of Race and Class Exploitation in the U. S.,” Geografiska Annaler, Series B, 88, 1 (2006), 105–32; Elvin K. Wyly, “The Subprime State of Race,” in Susan J. Smith and Beverley A. Searle, eds., The Blackwell Companion to the Economics of Housing (Oxford: Wiley-Blackwell, 2010), 381–413.

3 Hyman, Louis, Debtor Nation: The History of America in Red Ink (Princeton: Princeton University Press, 2011), 223–34.

4 Stiglitz, Joseph, Freefall: Free Markets and the Sinking of the Global Economy (London: Penguin, 2010), 28.

5 Financial Crisis Inquiry Report, 403.

6 Rivlin, Gary, Broke, USA: From Pawnshops to Poverty, Inc. How the Working Poor Became Big Business (New York: HarperCollins, 2010), 19; Reyes, Paul, Exiles in Eden: Life among the Ruins of Florida's Great Recession (New York: Henry Holt and Company, 2010), 254.

7 Congressional Budget Office, Director's Blog, available at, accessed 6 April 2012.

8 Shiller, Robert, The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It (Princeton: Princeton University Press, 2008), 41.

9 Federal Deposit Insurance Corporation, Expanded Guidance for Subprime Lending Programs (2001), available at, accessed 6 Oct. 2011.

10 Hyman, Debtor Nation, 236.

11 Schwartz, Herman M., Subprime Nation: American Power, Global Capital, and the Housing Bubble (Ithaca: Cornell University Press, 2009), 189–90.

12 Gorton, Gary B., Slapped by the Invisible Hand: The Panic of 2007 (New York: Oxford University Press, 2010), 81.

13 Ibid., 83–85.

14 Ibid., 88–90.

15 Ibid., 84.

16 Financial Crisis Inquiry Report, 134.

17 Ibid., 142.

18 Ibid., 22.

19 Gorton, Slapped by the Invisible Hand, 62.

21 Ibid., 63.

22 Ibid., 64–65.

23 Poon, Martha, “From New Deal Institutions to Capital Markets: Commercial Consumer Risk Scores and the Making of Subprime Mortgage Finance,” Accounting, Organizations and Society, 34 (2009), 654–74, 663.

24 Ibid., 667.

25 Marron, Donncha, “ ‘Lending by Numbers’: Credit Scoring and the Constitution of Risk within American Consumer Credit,” Economy and Society, 36, 1 (2007), 103–33, 122.

26 Ibid., 105.

27 Poon, 658.

28 Financial Crisis Inquiry Report, 67.

29 Poon, 656.

30 Financial Crisis Inquiry Report, 72.

31 Marron, 108.

32 Sinclair, Timothy J., The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness (Ithaca: Cornell University Press, 2005), 15, 52.

33 Langley, Paul, “Sub-prime Mortgage Lending: A Cultural Economy,” Economy and Society, 37, 4 (2008), 469–94, 472.

34 Ibid., 482.

35 Poon, 654. See also Gotham, Kevin Fox, “Creating Liquidity out of Spatial Fixity: The Secondary Circuit of Capital and the Subprime Crisis,” International Journal of Urban and Regional Research, 33, 2 (2009), 355–71; idem, “The Secondary Circuit of Capital Reconsidered: Globalization and the U.S. Real Estate Sector,” American Journal of Sociology, 112, 1 (2006), 231–75.

36 Joint Center for Housing Studies (1998); Fannie Mae Foundation Research Report (2000), quoted in Gorton, Slapped by the Invisible Hand, 66.

37 Shiller, Subprime Solution, 150.

38 Jones, Gavin, American Hungers: The Problem of Poverty in U. S. Literature, 1840–1945 (Princeton: Princeton University Press, 2008), 2.

39 Ibid., 2.

40 Ibid., 17.

41 Ibid., 3, 17.

42 Ibid., 6.

43 Ibid., 97.

44 Ibid., 28. Jacob A. Riis, How the Other Half Lives (London: Penguin Books, 1998).

45 Reyes, Exiles in Eden, 4. Further references are given parenthetically in the text.

46 Auster, Paul, Sunset Park (London: Faber & Faber, 2010), p. 11. Further references are given parenthetically in the text.

47 McCarthy, Anna, “Reality Television: A Theater of Neoliberal Suffering,” Social Text, 25, 4 (2007), 1742.

48 Duménil, Gérard and Lévy, Dominique, Capital Resurgent: Roots of the Neoliberal Revolution (Cambridge, MA: Harvard University Press, 2004), 191.

49 Harvey, David, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2007), 161, 168.

50 Harvey, David, “Class-Monopoly Rent, Finance Capital and the Urban Revolution,” Regional Studies, 8, 3–4 (1974), 239–55, 240.

51 Harvey, David, The Limits to Capital (London: Verso, 2006), 331.

52 Wyly et al., “American Home,” 109.

53 Ibid. See also Wyly, Elvin, Moos, Markus, Hammel, Daniel, and Kabahizi, Emmanuel, “Cartographies of Race and Class: Mapping the Class-Monopoly Rents of American Subprime Mortgage Capital,” International Journal of Urban and Regional Research, 33, 2 (2009), 332–54.

54 Ibid., 108.

55 Rivlin, Broke, USA, 31; Hyman, Debtor Nation, 269–75.

56 Ibid., 31–32.

57 Duménil, Gérard and Lévy, Dominique, “Neoliberal Income Trends: Wealth, Class, and Ownership in the USA,” New Left Review, 30 (2004), 105–33, 111.

58 Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913–2002,” in A. B. Atkinson and Thomas Piketty, eds., Top Incomes Over the Twentieth Century: A Contrast Between European and English-Speaking Countries (New York: Oxford University press, 2007), 141–225, Figure A1. Typescript available at, accessed 7 April 2012.

59 Ibid., 106.

60 Quoted in Duménil, Gérard and Lévy, Dominique, The Crisis of Neoliberalism (Cambridge, MA: Harvard University Press, 2011), 64.

61 Shiller, Subprime Solution, 51.

62 Quoted in Rivlin, 153.

63 On the coercive effects of the increasingly transnational and collective allocation of capital see Harmes, Adam, “Institutional Investors and the Reproduction of Neoliberalism,” Review of International Political Economy, 5, 1 (1998), 92121.

64 Gorton, Slapped by the Invisible Hand, 79.

65 Ibid., 80.

66 Marx, Karl, Capital: A Critique of Political Economy, Volume I, trans. Ben Fowkes (Harmondsworth: Penguin, 1976), 1026.

67 Lapavistas, Costas, “Financialized Capitalism: Crisis and Financial Expropriation,” Historical Materialism, 17 (2009), 114–48, 132.

68 Duménil and Lévy, Crisis of Neoliberalism, 21.

69 Schwartz, Subprime Nation, 190.

70 Ibid., 180.

71 Ibid., 189.

72 Ibid., 175.

73 Ibid., 180.

74 Gorton, 94.

75 Ashcraft and Schuermann, “Understanding Securitization,” 8.

76 Gorton, 94.

77 Schwartz, 190.

78 Duménil and Lévy, 61.

79 Hyman, Debtor Nation, 275–78; Financial Crisis Inquiry Report, 102; on the linked fates of subprime and Alt-A mortgage loans see Schwartz, 176–82.

80 Piketty, Thomas and Saez, Emmanuel, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics, 118, 1 (2003), 1–39, 37.

81 Blackburn, Robin, “The Subprime Crisis,” New Left Review 50 (2008), 63–106, 71.

82 Ibid., 73.

83 Marco Roth, “Letters of Resignation from the American Dream,” in Astra Taylor et al., eds., Occupy! Scenes from Occupied America (London: Verso, 2011), 23–29, 24. See Adam Weinstein, “‘We Are the 99 Percent’ Creators Revealed,” Mother Jones, 7 Oct. 2011,–99-percent-creators. The site can be found at

84 Roth, 25.

85 See, for example, Michael T. Snyder, “So Long, Middle Class,” New York Post, 1 Aug. 2010, available at; Gregory Arcs, Downward Mobility from the Middle Class: Waking up from the American Dream (Washington and Philadelphia: Pew Charitable Trusts, 2011); Alexander Eichler, “Middle-Class Americans Often Fall down Economic Ladder: Study,” Huffington Post, 7 Sept. 2011, available at, accessed 3 April 2012.

86 “A Modest Call to Action on This September 17th,” Occupy Wall Street, avilable at–18–2011.

87 “#ows and #occupythehood March in Solidarity with Those Foreclosed on by Criminal Banks,” Occupy Wall Street, 28 Oct. 2011, available at

88 Christopher Herring and Zoltán Glück, “The Homeless Question,” in Taylor et al., Occupy!, 169.

89 Christian Marazzi, The Violence of Financial Capitalism, trans. Kristina Lebedeva and Jason Francis McGimsey (Los Angeles: Semiotext[e], 2011), 10.

90 Harvey, Limits to Capital, xvi.

91 Wyly et al., “American Home,” 127.

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