The Dialectics of White-Collar Crime: The Anatomy of the Savings and Loan Crisis and the Case of Silverado Banking, Savings and Loan Association

By Glasberg, Davita Silfen; Skidmore, Dan | The American Journal of Economics and Sociology, October 1998 | Go to article overview

The Dialectics of White-Collar Crime: The Anatomy of the Savings and Loan Crisis and the Case of Silverado Banking, Savings and Loan Association


Glasberg, Davita Silfen, Skidmore, Dan, The American Journal of Economics and Sociology


I

Introduction

The savings and loan bailout stands out as the first time in U.S. history that Congress agreed to bail out an entire industry as opposed to a single corporation. It is by far the most expensive bailout to which Congress has ever agreed, and the first time a bailout has been underwritten with a blank check rather than a specified dollar amount. It is costing the United States taxpayers $200 billion and counting to bail out the S&L industry from the crisis of the 1980s (Bradsher, 1994; see also Bater, 1994). Estimates are that the savings and loan bailout will total more than $500 billion over the next forty years (with some experts insisting that the cost may total more than $1 trillion over the next thirty years; Hays & Hornik, 1990, p. 50). The sticker shock of that cost tends to invite simplified analyses of the cause of the crisis. Two competing perspectives prevail: on one hand are stories of individual fraud and greed that dominate the popular press; on the other are arguments focusing on organizational factors that differentiate white-collar crime from other crimes, an analysis that tends to receive favor in sociological studies of the crisis.

Fraud remains an intriguing focus of media examinations of the S&L crisis. The popular press continues to emphasize fraud as the major culprit in the S&L crisis. In 1991 alone, the FBI budgeted more than $125 million to pursue cases of fraud in the industry (U.S. Congress: Senate, 1992, p. 45), resulting in 6,405 indictments for bank-related crimes; 96.5 percent of the resolved cases resulted in convictions of S&L violators by the end of 1995, with more than three-quarters of those convicted going to prison (Singletary, 1995, p. A10; U.S. Department of Justice, 1992, p. 66).

Many scholars (cf. Barth, 1991; Barth, Batholomew, & Labich, 1989) counter that fraud accounted for very little of the dollar value lost in the crisis. Although half of the insolvent thrifts have been found to involve elements of fraud in 1988 (Barth, 1991), observers have estimated that fraud accounts for as little as 3 percent of the cost of the bailout (cf. Barth, 1991, p. 44; Ely, 1990). Others offered a more conservative estimate of 10 percent (Barth, Bartholomew, & Labich, 1989).

On the other hand, Galavita and Pontell (1990, 1991, 1993, 1997) note that the measures used by observers like Ely and Barth et al. were seriously flawed and grossly underestimated the amount of fraud involved in the crisis. They argue instead that deregulation, coupled with the banks' structural role as trustees of other people's money, facilitated what they termed "collective embezzelment" in the industry as standard operating procedure. Under bank deregulation, there were far fewer field supervisors and auditors, and consequently much less oversight of the financial status and practices of the savings and loans. In the absence of adequate and regular oversight, fraud became not only possible but standard operating procedure. Deregulation of banking (both de facto with early, unofficial relaxations of regulations, and later, de jure in formal legislation) created conditions that made regular fraudulent practices the norm (see also Zimring & Hawkins, 1993). Thus, even in some fraud-based analyses, deregulation emerges as a critical factor in the savings and loan industry's crisis.

This brief introduction to the debate concerning the nature of the S&L crisis points to theoretical difficulties with the very conceptualization of white-collar occupational and organizational crime. Conceptualizations of white-collar crime have been preoccupied typically with identifying the unique characteristics that differentiate it from other crimes, "rather [than] to search for interactions along different dimensions and between multiple components that make up crime and societal reaction to crime" (Schlegel & Weisburd, 1993, p. 4). …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Dialectics of White-Collar Crime: The Anatomy of the Savings and Loan Crisis and the Case of Silverado Banking, Savings and Loan Association
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.