What is the root cause of the financial crisis? “Lousy loans,” says Elizabeth Warren, the chairwoman of the Congressional Oversight Panel. We agree. And we like the phrase, especially because it provides a nice counterweight to that other double-L phrase, “liar loans,” which tends to blame the borrower. Warren’s phrase is a casual one, of course, but in some ways it is better than the language the press has tended to use to characterize the origins of the crisis. The fact is, of all the possible terms to describe these lousy loans, the press never found the right one. And as we’ll see, the lack of a single word—one easy-to-understand adjective to put in front of the word “loans” or “lending,” a word that would encapsulate the boiler-room culture that overran the mortgage industry—cost all of us plenty.
Instead of the right word, the press deployed another word—“subprime”—for reasons that are to some extent understandable, but unfortunate nonetheless. Unfortunate because “subprime” describes only the borrower, in unflattering terms, and has nothing to say about the lender.
That brings us to a secondary phrase: the less common but far more interesting “predatory lending.” Interesting because it both gets us closer to the heart of the problem, putting the focus on the lender, and yet still falls tragically short. Its rhetorical punch has given it staying power but has also hindered its broader acceptance by the press—leaving space for “subprime” to slip into ever more common usage and eventually to dominate the discourse.
Why is this crucial? Because when large segments of the business press dismissed the term “predatory lending,” they also dismissed the practice. The press had trouble understanding the crisis because it didn’t know how to talk—and thus how to think—about it.
Is this a tragedy? Well, we’ve got the numbers, we’ve read the stories behind them, and we promise to back up our claim that when “subprime” muscled aside “predatory” it had real-world consequences. But first we want to broaden this discussion a bit.
More than twenty-five years ago, scholar Benedict Anderson, in Imagined Communities, an important book about the rise of nationalism, described nations as being bound together by a perception of solidarity on the part of their citizens. Media were key to the formation of this solidarity. The press helps both
to generate a sense that we are part of a larger whole and to define the nature of that whole. That’s relevant for our purposes because it relates journalistic language—the stories we tell ourselves—to how society is ordered. As Michael Schudson wrote in the American Historical Review in 2002: “Anderson’s work potentially promotes … a recognition that news is not only the raw material for rational public discourse but also the public construction of particular images of self, community, and nation.”
With that in mind, we ask: What kind of imagined community has the press, particularly the business press, fostered?
We can start to answer that question by looking at how “subprime” came to trounce “predatory.” The fluctuating place of “predatory lending” and the rise of “subprime” in the U.S. press lexicon is an indication of underlying attitudes about the relationship between business and consumer, and thus about class, race, and so much else.
We used the news database Factiva, which has its unfortunate quirks but is still useful as an indicator of general trends, to give us a rough quantitative lay of the linguistic landscape over the past two decades. Using the graph on page 47, you can see that the phrase “predatory lending” had a slow start in the press, with collective use by a broad spectrum of “major news and business publications” remaining in the single or double digits each year through the 1990s. Usage increased in the 2000s, rising from three or four hundred in the first two years of the decade to seven hundred or so in each of the next two years (as state attorneys general, who used the term a lot, waged a campaign against unscrupulous lenders around the nation), then falling back to the four hundreds or below each year from 2004 through 2006 (when the Bush administration came down hard on those AGs at the behest of the banking industry, even as the worst kinds of predatory loans flourished). Then in 2007 usage spiked at more than a thousand instances, along with widespread recognition of the financial crisis. But it falls back down to the seven hundreds in 2008 and continues down to fewer than three hundred for the first half of this year.