Scholars currently debate the causes and consequences of the financial, housing foreclosure, and economic crises that are spreading globally to transform cities and international relations. This article develops the heuristic device crisis-policy nexus to identify and explain the policy drivers of the subprime mortgage crisis. I argue that the generation and regulation of capital flows through state policies systematically produces and exacerbates crisis tendencies – the accumulation of capital is associated with the accumulation of crises. Against conventional forms of Marxist theorizing, this article suggests that the metamorphosis of the subprime mortgage crisis into the global financial crisis reflects sociopolitical contradictions of previous state policies, and not the contradictions of capitalist accumulation per se.
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