Five Years On – The Media’s Role in Ireland’s Financial Fall

(Originally published at in October 2013)

With the five-year anniversary of the nationalising of the Irish banks having just passed us, one would think that at this stage we would have some answers. One would be wrong. Of course, much has been written about the topic in the years since. However, as much as we and the media enjoy blaming the elites of the world for what happened, the media also had a large role to play in the inflating the property bubble which has since burst and the consequences of which have hobbled the country. They toed the party line regarding property prices, and as a result, played an important propagandising role in the country. Whilst over the previous week there have been numerous articles written about the bank guarantee and the resulting economic downfall, as far as I am aware, nothing has been said about the media’s culpability. This is an important omission, but not entirely unsurprising.

Nevertheless, one Irish-based academic has looked at this particular issue. In April of this year, Julien Mercille, of the School of Geography, Planning & Environmental Policy in University College Dublin (UCD), published a paper entitled “The Role of the Media in Sustaining Ireland’s Housing Bubble”. The paper, which got a very limited amount of publicity at the time of its publication, goes into great detail regarding the functioning of the economy prior to the bank guarantee and the media’s role in helping to inflate and sustain the property bubble. As early as 1998, economist David McWilliams was writing about the dangers of a property bubble emerging in Ireland as all of the signs pointed to one. He wrote that, “general credit in the economy is up more than 20 per cent in 1997 alone. A quick glance at property prices suggests that we are definitely entering asset-price bubble territory”. However, such viewpoints were rarely heard in the national media and reasons for this are simple: The centralisation of power, overlapping interests, and clientelism/cronyism. We can see this when we look at the composition of those at the top of the various private and state-owned media in Ireland.

On the issue of privately owned media in Ireland, take the example of Independent News & Media (INM), whose “board members have included Brian Hillery, a Director of the Central Bank of Ireland and former Fianna Fáil member of parliament, Dermot Gleeson, the chairman of AIB during the housing bubble years, and B.E. Summers, a director of AIB”. The Irish Times was also not immune from similar connections to banking amongst its leaders. During the so-called boom years, one of its board members was David Went, a CEO of Irish Life & Permanent. The same state of affairs can also be seen in the state-owned media, in this case RTÉ. It is the government who appoints the board of RTÉ, which in and of itself speaks volumes regarding the pulling of strings and whose ideology will be shown in the media. One former director of RTÉ during the Celtic Tiger years was Patrick J. Wright, who was also at the time a director of Anglo Irish. After Wright came Mary Finan in 2006 “with a resumé including positions such as director of the ICS Building Society, a Bank of Ireland subsidiary mortgage lender that offered 100 per cent mortgages from 2005 onwards and was eventually covered by the 2008 government guarantee”. Mercille also looked at the content of Prime Time and Prime Time Investigates between from 2000 to 2007. During that time, 717 shows were aired and “only 10, or about 1 per cent of the total, had a segment concerned with the housing boom”. Of the commentators who were invited on to the show, eleven were members of the financial or property sector, four were politicians from Fianna Fáil, Fine Gael, or Labour, eight were either journalists, academics, or researchers, and three were “economic consultants”. Of the total, only two of them, David McWilliams and Morgan Kelly, “stated clearly that there was indeed a [property] bubble and it would burst”. The others “remained either vague or argued explicitly that the housing market was and would remain strong in the years to come, or that a soft landing was to be expected if the boom decelerated at some point”.

Mercille also noted the pressure on journalists to conform to the model decided upon by those with and in power. In the era of 24-hour news, meeting deadlines is all the more important in order to gain the upper hand on rival journalists and media providers. The problem with this however, is that news is condensed, dumbed down, and comes from the most “reliable” [read convenient] sources available: the government and powerful corporations. He further notes the testimony of journalists that were gathered elsewhere in which it is stated that, “some journalists are reluctant to be critical of companies because they fear they will not get information or access in the future”. This is hugely problematic for any country, regardless of the topic(s) being covered. If journalists are so reliant on a source or sources that they are willing to write non-critical stories so as not to offend their sources, then the media is culpable for crimes or injustices committed by their sources. This has been written about elsewhere, such as in the seminal work by Herman and Chomsky, Manufacturing Consent: The Political Economy of the Mass Media. Journalist Patrick Cockburn, using the example of so-called “embedded journalists” during the 2003 invasion of Iraq, has also written about the topic of journalists becoming too close to the source of their information, which in turn sullies their writing and turns them into nothing more but propagandisers. He writes:

“In these circumstances [kidnapping of journalists], over-reliance on ‘embedding’ as the primary method of gathering information may have been inevitable, but it produces a skewed picture of events. Journalists cannot help reflecting to some degree the viewpoint of the soldiers they are accompanying. The very fact of being with an occupying army means that the journalist is confined to a small and atypical segment of the political-military battlefield”.

This is precisely the case with Ireland, only it does not pertain to war but instead to the economy of the country and the property bubble which burst in 2008. By relying on supposed experts, who were as biased as one could possibly be, the media fell into the role of national propagandiser. Mercille shows this empirically by highlighting the level of coverage given to the property bubble pre-2008. For example, even though over 40,000 articles regarding the economy were published between the years 2000 and 2007 by the Irish Times, just 78 discussed a property bubble. It can also be seen when in 2007, the Irish Times carried out a survey of so-called property experts in order to see how they believed the property market would behave in the following year. As Mercille writes, “The six experts selected all held high-level positions with property firms: Managing Director, CBRE (global commercial real estate services firm), Investments Director, Lisney (leading Irish real estate agency), Managing Director, Savills HOK (global real estate services provider), Managing Director, Sherry FitzGerald (leading Irish real estate agency), Managing Director, Ballymore (Irish property company), Chief Executive, IPUT (largest property trust in Ireland), Director, Finnegan Menton (Irish property consultancy firm)”.

People who dared to criticise the economy and point out the fact that there was a property bubble were either ignored, or maligned in public discourse. This was the case with David McWilliams who, as already mentioned, had pointed out as early as 1998 that there was a property bubble emerging in Ireland. It was also the case with Richard Curran, who in 2007 made a documentary entitled “Future Shock: Property Crash”, in which he talked about the upcoming dangers associated with the bursting of a property bubble. He was accused of everything ranging from irresponsibility to being inaccurate and sensationalist. The reaction to the documentary and the empirical evidence highlighted by Mercille demonstrates the Herman-Chomsky propaganda model of the media, and the dominant ideology frame through which the media operates, as written about by Irish sociologist Ciaran McCullagh. Simply put, the media was and is forced to operate through a number of filters such as, advertising revenue, reliance on elites for information, and flak in the form of criticism and ostracisation in order to keep journalists in line, as can be seen in the cases of McWilliams and Curran, and the attacks against them by those in the media. The dominant ideology frame is just a variation of this model, in that the choice of what is to be published or broadcast is simply “one that is compatible with the interests of the dominant class of power group in society”.

What all of this demonstrates is that the media played a huge role in the propping up of an inflated and hollow economy that was based on nothing more than property speculation. It also goes a part of the way to explaining why the government guaranteed the banks in September 2008 in the sense that whilst the media was reliant on the elites for information, the elites were reliant on each other. Those with power knew what was coming long before the general populous and did their best to protect themselves and their assets. With the neoliberalising of the Irish media, it is not at all surprising that they contributed to the inflating of a property bubble. It is also not surprising that the obsession with property and property prices continues unabated. Over a period of three weeks from mid-June to early July of this year, the Irish Times published a number of articles which reported that house prices appear to be levelling off. The titles of the articles can tell us quite a bit about what is implicit in their content: “Irish property market has hit bottom, probably”; “Huge rise in planning permissions for new homes”; “House prices down in May but slump appears to be bottoming out”; “Noonan says up to 30,000 new houses will be needed annually”; “House prices in south Dublin up 12.2%, survey shows”. The Irish Independent has also joined in, publishing the following articles over the last five days: “CSO: Dublin prices soar by 10.6pc in a year”; “Now property prices begin to stabilise in cities outside capital”; “‘It’s not a new property bubble, there are just too few houses’”. What is implicit in all of these is what we saw during the Celtic Tiger years; buy now or pay more later. We constantly saw this in the media prior to 2008, and now we are beginning to see it again. The difference this time is that easy credit is not so easy to obtain, but that is just for the moment. If that changes, and with the media seemingly happy to continue to play the role of economic cheerleader, we could once again enter property bubble territory. Such a prospect should be anathema to us all given our recent economic history. However, one should never underestimate the power of the media to push a particular interest or view that is beneficial to them, and the political and corporate establishment which they serve.