Description
The shift from exclusion to super-inclusion in the 2000s US subprime boom is often seen as an important turning point in how finance can prey on marginalised borrowers. This turn is often explained as an outcome of misaligned incentives that allowed financiers to charge high interest and fees while passing on any risk via securitisation. While differentiated outcomes are acknowledged, focusing on Wallstreet sidelines the constitutive role of racialised and gendered practices in the making of financialisation. By contrast, we adopt a historicist approach to foreground the social struggles in producing financial structures in unexpected ways. We trace racialised practices as exceptional experiments from the 1920s onwards to document the significance of racialisation for how predatory lending changed over time. We find that subprime was significant because it changed predatory lending from a logic of rentierism to a logic of raiding, a systematic version of equity stripping. This was not pushed by Wallstreet but by local real estate developers in response to the distinct nature of racialised practices.
