According to Vincent Browne the establishment of the National Asset Management Agency (NAMA) represents "potentially the single largest transfer of wealth ever to take place at once." The agency, established to "oversee the transfer of the dodgy loans held by the banks, loans amounting to €90 billion," will take on billions of Euro in debt owed by developers. With the taxpayer essentially becoming liable for the commercial risk now realised in the ghost estates mercilessly documented by Eamonn Crudden in his short film 'Wallets Full of Blood: Houses On The Moon'.
Properties sold as investment opportunities and, often secondarily, as 'a place to call home' will now not only become the crash landing of negative equity, but the burden of additional tax. Taxes that will not be spent on public services, but set aside for the state financed bailout of a rich minority.
As quoted in 'Houses on the Moon', "What was built to keep people safe, is gonna trap them inside."
Scapegoat the poor
By establishing NAMA, the government identified the primary cause of our economic difficulties. Not public sector inefficiencies; not uncompetitive wages; not excessive social welfare payments; not even reliance on low corporate tax rates. But reckless lending, by reckless financial institutions, to reckless developers, spurred on by a reckless government and all under the watch of a reckless establishment press.
So how does this inconvenient fact fit into the recessionary narrative? Not very comfortably it would seem.
In the weeks and months since the banking crisis was exposed “the economic debate [has morphed] from an obsession with debts and deficits into a full-blown assault on the public realm that has more in common with Thatcherism than it does with mere fiscal prudence.”
For instance, The Irish Times' Stephen Collins recently warned that "[t]ackling the public service pay bill and the social welfare bill can hardly be avoided." Dan O’Brien of the Economist Intelligence Unit also told of the need to address “the elephant in the room” in the Irish public finances," declaring that a "reduction in the minimum wage from €8.65 was “an open and shut case.”" While Sarah Carey fretted about the potential impact of bank nationalisation, whereby the inefficiencies of the public sector might exacerbate the incompetence of the banking sector! "I accept that there are talented people in the public sector, but the inertia of government is more than they can usually bear. Worse, it’s contagious. Turn bank employees into public servants and I guarantee the malaise will seep in."
A sentiment summed up in ‘Shock Doctrine-esque’ clarity by an Irish Times’ Editorial writer: “Serious reform of the public sector – too long shirked by all political parties – was never more necessary. An economy in crisis presents a political opportunity to achieve that reform.”
Michael Taft explains this narrative as "merely a logical working out of basic right-wing premises. It started with calls for public expenditure controls, then moved on to the 'bloated' public sector and 'overpaid' public sector workers, proceeding to private sector wage cuts - and so on until it cascaded into a full blown attack on the public realm, making those on the lowest incomes scapegoats for the failed policies of past right-wing governments."
Good and Bad criticism
As we discussed in 'The Media and the Banking Bailout', the major problem facing the media is that it has been one of the leading proponents of the system which led us here. Newspapers disguised the true nature of the bubble economy, devoting ever more pages to property - the indestructible pillar of capitalism, now crumbling around us.
This interdependence between property and media industries has recently resulted in severe pay cuts for journalists and editors alike. Independent News and Media’s Irish operations’ revenues “fell 6 per cent to €377.3 million due to a "significant fall-off in advertising".” The Irish Times’ Managing Director, and presumably the brainchild behind the purchase of MyHome.ie, Maeve Donovan explains that “the decline in property and recruitment advertising has been particularly marked.”
A clear recognition of the media's financial reliance on the property industry, yet it has not prompted a corresponding look at the potential journalistic compromises caused by this dependence.
This reluctance to address a clear conflict of interest is at least partly due to the media’s resistance to certain types of criticism.
Take for instance, David Bloch's recent piece in the Irish Times. Mr. Bloch, chief executive of Brightwater, a firm of recruitment specialists, accuses the Irish media of acting as a “bad news brigade,” stoking pessimistic sentiment and thus worsening the economic situation. He writes:
"The world is in a dreadful state, no doubt. Ireland’s pillars of prosperity have been eroded by many factors. The construction boom is over and will take two to five years to recover fully. The banking sector is in trouble globally, but there are certainly green shoots of recovery all around the world.”
Bloch’s criticism is certainly outwardly negative, but it also suggests some underlying broadly positive attributes. It suggests the media is uncovering and highlighting 'bad news' stories, such as banking irregularities, political mismangement and job losses, at the expense of 'good news' stories, such as feint signs that unemployment growth is slowing - the former reflecting negatively on business and politics, the later reflecting positively. This type of criticism therefore, reinforces the idea that the media acts as it claims – as a check and balance. This could then be dubbed ‘good’ criticism.
Quite oppositely, when criticism appears to expose subservience to right wing establishment ideology journalists are far less willing to entertain it. For example, the Irish Times' Sarah Carey was recently challenged by Michael Taft and Donagh Brennan of the Irish Left Review to substantiate her claim that the Irish welfare system offered “the most generous social welfare payments in the EU” (the inference being that welfare payments needed to be cut), a claim also made by a number of others.
Carey was unable to establish a verifiable source for her “most generous” claim, simply deferring to information she had been passed by her 'contact' in the Department of Finance. The OECD data Taft and Brennan cited on the other hand contradicted Carey's claim. In fact “a single person claiming social welfare in Ireland received payments that were 29 percent below the average of other EU-15 countries…Even poorer countries such as Portugal and Spain make higher payments.” Yet Carey refused to accept the error and more importantly failed to make a correction of equal prominence.
This conservative meme also prompted an Irish Times poll with the none-to-subtle question “Do you think Ireland's social welfare system is too generous?” and following a report by David Grubb of the OECD (Organisation for Economic Co-operation and Development), in which he laid out recommendations for an employment “activation programme” and suggested that the government should "tighten and modernise benefits administration," readers were treated to some sensationalist headlines.
The Irish Independent announced "Dole is too generous, says top jobs expert." While the Irish Examiner told of the need to "get tough on welfare recipients."
In fact, Grubb refers to social welfare policy strictly within the confines of its implications for employment activation: "The commitment to maintain social welfare rates at a higher level (in comparison to 2000 levels) is another reason that Ireland now needs to develop stronger activation measures...because international comparisons suggest that countries where net benefit replacement rates are high spend far more on both active and passive labour market programmes."
The sacred journalistic notion of ‘balance’ came in the form of a 200 odd word press release from Cori (Conference of Religious in Ireland) - "Generous Irish welfare a 'myth'" - unfortunately resulting in yet another headline tying the word 'generous' to 'welfare'.
The property problem
"Money has lost its value, property has lost its value, Woolsworths gift vouchers have lost their value...Before all this happened all that was on television all day was programmes about how to buy a house, do up a house or sell a house for more than you payed for it, or do all three simultaneously...and in between these programmes about how to buy a house, or do up a house, or sell a house for more than you paid for it, were adverts telling you how to get money to do this, money that wasn't really yours, by taking out a loan or by suing someone for something that was obviously your fault." [Stewart Lee, Stewart Lee's Comedy Vehicle, BBC2]
The issue of property is a thorn in the media's side. A dirty secret omitted from debate. Stewart Lee, quoted above, is one of the few that have attempted to address the issue. But as a stand-up comedian, his analysis is unlikely to be subjected to further scrutiny in mainstream discourse. Satire is a forum for debate that the establishment is understandably unwilling to enter into.
Having said that, rare instances of unintentional satire do appear, such as the Irish Independent’s '5 Mins With' interview with disgraced Chairman of Anglo Irish Bank, Sean Fitzpatrick in 2006. In 2008 it was revealed that Fitzpatrick had hidden €87m in secret loans over a period of eight years, yet the most probing question he was asked by the Irish Independent was: “If you had a spare million?” To which Fitzpatrick replied: "I'd do something for the homeless; provide day-time facilities."
The failure to report accurately and investigate thoroughly during the bubble years raises very serious questions about the media’s ability to act as a 'check and balance'. The continuing failure to acknowledge this issue undermines its authority to comment on the solution to the current crisis.
Even on the rare occasions that commentators raise the subject, it is invariably met with a deafening silence.
For instance, UCD's Colm McCarthy broached the subject on RTE's Prime Time late last year in interview with Donagh Diamond, acknowledging several times that the media were key stakeholders in the property bubble. Back in the studio however, Richard Curran, Shane Ross and Mark Little all suffered the exact same selective memory loss, unanimously failing to address this core part of Diamond's investigation.
More recently Prime Time dipped its toes into this relationship with a report by Derek Brawn, a former property insider, having worked as head of research for Savills (Hamilton Osborne King). Unfortunately, the report was introduced by Miriam O'Callaghan as follows: "Derek Brawn gives a very personal perspective on the boom, the bust and what it all means for you." RTE clearly distancing itself from the “very personal perspective” at the outset.
Brawn attempted to answer the question "Who really inflated the property bubble?" Citing some of the boom's unreal price increases, he made clear how fraudulent the price explosion was. He reminded viewers of the €14m offer made on a Landsdowne Road house in 2005, for a house bought for €0.5m in 1994. A 35% increase in value each year. If that growth were to have continued, he explained, the house could have been worth €5.8bn in 2025.
Brawn identified the major culprits of the bubble industry as follows:
"The three main culprits [of the property bubble] were builders, banks and politicians...But there were another group of people who added fuel to the fire in the run up on property prices, namely the estate agents and newspaper property pundits. They collaborated with the big developers, especially where it came to advertising. Property advertising in Ireland accounts for up to half of newspaper ad revenue."
He went on to charge that even after the bubble began to collapse, the culprits continued their campaign:
"Home values in Ireland have fallen by a fifth since the market peaked in 2007, but the estate agents and the newsprint media focus incessantly on aspirational or asking prices. Lately they have been guilty of exaggerating the price drops in order to fool the public that we are now close to the bottom.
Even today two years into the recession we are still being subjected to black propaganda or misleading counter intelligence. The property pages are full advertisements claiming it is now cheaper to buy than rent, as monthly mortgages have fallen. Wrong, as long as house prices have further to fall, it pays to wait."
We don't need an insider to spot this “black propaganda,” the evidence litters our newspapers. Yet Brawn is almost alone in commenting on it. Several weeks later, following a dearth of follow up commentary, Brawn was invited on to the Late Late Show to battle it out with property expert David Cantwell of Hooke and MacDonald. And again, despite appearing on the country's most watched programme, he was almost universally ignored by his peers in the media (Kathleen Barrington did make passing reference in the Sunday Business Post).
A notable exception to this silence is Paul Gillespie, writing in the Irish Times about a speech by Lionel Barber, editor of the Financial Times, who “asked what responsibility journalists in the financial media have for not foreseeing [the crisis],” Gillespie notes:
“If media are to live up to the self-proclaimed role as critics and accountants of power rather than its mere corporate stenographers they must accept some blame for such a lack of foresight. Barber says the financial crisis started as a highly technical and opaque story about credit markets that took months to go mainstream. Reporters working there found it hard to interest their superiors, who controlled space devoted to stories of rising property prices and economic growth and some of whom did not want to antagonise advertisers.”
But this is not a view shared publicly by journalists. Brawn and Gillespie are most definitely exceptions to the rule.
Political and business leaders, regulators and economists all fell down on this job, as can now be seen in retrospect. Since these are principal decision-makers and wielders of power they set and frame the terms on which the media report their activities.” [Paul Gillespie, Why so many failed to see the crisis coming, Irish Times]
Over the last year or so we have been in contact with a number of journalists from Ireland's broadsheets, seeking their views on the media / property relationship. We asked why the issue has been ignored and suggested that the topic deserved open discussion - that perhaps it pointed towards a deeper issue of compromise between funding and journalism. Surprisingly, and without exception, journalists agreed that this was indeed an unhealthy relationship.
Although we have agreed not to make these conversations public, we thought it was worth sharing some of these media insider thoughts with you. Though the authority is somewhat lost given the anonymous nature of these quotes, they are nonetheless valuable insights and admissions.
Reacting to our point that “the Irish media is deeply complicit in the financial crisis, by virtue of its self-evident vested interest in the speculative bubble,” one journalist had this to say:
"These are compelling points...Your media criticism is particularly valid...The media was complicit: I cannot defend it. We bought into the myth too, and the ad revenues were not the only reason, although I am sure they were a factor."
"I [have] made the very point about the media's, and particularly the Irish Times', role in this cheerleading. But no one ran with that particular ball. Why? Because the Times was about to plough its cash into guess what - my home.ie!"
"There is for sure (or there can be) an uncomfortable relationship between advertisers and journalists but in here, there’s a Berlin Wall between editorial and commercial."
Commenting on one of the deluge of articles about opportunities for overseas property buyers, one journalist explained their predicament:
"All in all, I accept that we, like almost every other media outlet, have given acres and acres over the years to property and, for want of a better expression, ‘boom talk’, but for the most part, we’re just the messenger…Where I think there are difficulties for media is in the question of by reporting matters to what extent, if any, is one promoting the subject being reported? I don’t know the answer to that one – it’s the journalists’ chicken and egg question; the best I can say is that one should report matters soberly and not sensationalise them… but we’ll never get it wholly right."
And another responded on the failure to identify the warning signs:
"I don't think people were either unaware or unwilling to comment. In the professional circles of economics and finance these issues were from '07 on anyhow well aired, analysed and discussed. However, one of the characteristics of any bubble is that we all, to a greater or lesser extent, get caught up in same. Now, the job of newspapers is ultimately to sell newspapers - if you cry stinking fish stinking fish then few will purchase...So, was I wrong then? Yes, in retrospect. As new information comes I adapt my views."
These candid accounts are so rarely revealed in print. Few reading their daily paper will be exposed to admissions that newspapers are there to sell, primarily, and to inform, secondarily.
There is also a worrying acknowledgement that journalists don't even aspire to be the 'Fourth Estate', check and balance of power, that they often portray themselves as - "For the most part, we're just the messenger." A messenger for whom and for what? Those with the power to influence? Those with money, political clout and business connections? What is the media then, other than an extension of that power?
Paul Gillespie, quoted above, answers these questions, explaining that political and business leaders “frame the terms on which the media report their activities.” The journalist’s hands are tied before they even put pen to paper.
Putting your hands up
Despite this depressing conclusion, there are journalists with a willingness to discuss this issue, journalists who reject the pressure to act as “corporate stenographers.” Eamon Dunphy is one such journalist.
Dunphy certainly has his blind spots, a propensity to defend the ownership of the Irish Independent for one. Even to compare Tony O'Reilly's stewardship with the investigative spirit of the Washington Post during the Carl Bernstein and Bob Woodward era (the journalists behind the Watergate story). A hallucinatory vision that prompted this response from Vincent Browne:
“Ludicrously, he compared O’Reilly to Catherine (sic) Graham of the Washington Post, who stood by Woodward and Bernstein during the Watergate scandal. Does Dunphy know about what happened to Joe MacAnthony?”
Of course Dunphy could not know about Joe MacAnthony (interviewed by MediaBite in 2008) and hold the same regard for today's Irish Independent, the two thoughts cannot exist together. Nevertheless, Dunphy has chosen to take on the most powerful lobby the media is forced to go up against, the media itself.
Speaking on Newstalk's 'Lunchtime with Eamon Keane' with Irish Times Assistant Editor Fintan O'Toole in April this year, Dunphy reacted to the recent emergency budget and, to the shock of host, reflected on a decade of failure in Irish journalism.
In a lesson on media openness to self examination, and even when tabled alongside Fintan O'Toole, one of Ireland's few respected left wing media commentators, he comes up against the standard reaction - diversion:
[EK - Eamon Keane, ED - Eamon Dunphy, FO'T - Fintan O'Toole]
"EK: Eamon, what was your initial reaction to the budget?
ED: ...the biggest story in the budget is undoubtedly the National Asset Management Agency (NAMA). This idea of taking over bad debts and delivering responsibility to the taxpayer. We don't yet know how this will work out, but it could potentially double the national debt, which is a problem for our children and our grandchildren.
It is not just developers, its the whole of the Irish establishment that created this. The spivery, the cronyism, in the media, not just the developers and bankers...
EK: How do you mean 'in the media'?
ED: The media were a huge part of this conspiracy to seduce, lure or terrify the Irish people into borrowing the amount they did. Principally for property, but not just for property.
While the finger pointing has to begin with those who are most responsible - the government, Brian Cowen present Taoiseach and Minister for Finance for four years, where he threw petrol on this fire. If he didn't know what David McWilliams, Richard Curran and an awful lot of other economists knew then he shouldn't have had that job. The Department of Finance, the Central Bank, the Regulator - who failed to regulate the banks, they are principally responsible.
But, there were others. The builders and the developers of course. And also the media, who are either cheerleaders for politicians or who are conspiring through property supplements and motoring sections, among other things, to conceal from people the reality - that you have to live prudently and that you have to have a certain modesty about your life.
EK: Eamon, I'm glad to welcome Fintan O'Toole Assistant Editor at the Irish Times to join us. Fintan, would agree with Eamon's assessment?
FO'T: Broadly I would, yes. The key issue, when you get over the initial shock of budget, that you are faced with is that all of this pain and it is real pain for people is just in the margins, the big story is the bank bailout.
The context you have to put it in is to say, look you are taking all this pain in order to limit the growth of the national debt and at the same time we're doubling the national debt by taking all these bad debts completely into the public realm. The ordinary person in Ireland is effectively taking on the debts of Sean Dunne, Bernard MacNamara and all of the property developers and bankers who with absolute recklessness and greed lent these people money, including to buy properties which are not even in Ireland. A huge amount of this money borrowed was to buy property in the UK, half of London is owned by these people. Property in Bulgaria, in Hungary.
It is very difficult for people to get there heads around this fact - that they are taking this pain, but at the same time someone is telling them "by the way, all that pain you are taking is all only a tiny part of the real story, which is that the people who caused this have to be bailed out and you, the person who is already suffering because they are paying ridiculously inflated mortgage because they were suckered into buying houses which were probably worth half of what they paid for them, people who were on forty year mortgages, you now have to stump up for the bankers."
People aren't stupid, they realise we are in an absolutely appalling crisis and that have to take pain to get out of it, but we needed two things. One, we needed not to be told that [we need to reduce the national debt and] at the same time the national debt doesn't matter because we can double it at the stroke of a pen. And two, we needed some articulation of how the country will look in three years time. If you go through this sequence of pain after pain, what kind of society might we get out of it?
I was shocked that there wasn't even a gesture, an attempt, to put some kind of context on these events. To say, the system that we have operated and driven into the ground is over, here's what we are putting in its place. Nothing, not a single gesture to say we can have a decent sustainable society which provides some sort of basic security for the majority of the population.
EK: Fintan, something Eamon said there struck me - maybe I've colluded? What he said in terms of the media, I'm interested to hear what you think about this. We had property features on radio programmes, we had newspapers doing property supplements and motoring supplements. There was a general collusion. So it is perhaps simplistic to just blame the government, the financial regulator and the central bank. We all colluded in this, including media organisations.
FO'T: I'm slightly worried about 'we all' and the term 'media', media is a plural term. Within all media organisations there is a plurality. Eamon is right to point to the fact that undoubtedly the advertising industry, of which the media is essentially an arm, as every organ of the media is completely dependent on advertising, and as we are of course finding out now there isn't any...
EK: Unless you have a license fee, you are somewhat buttressed...
FO'T: But even RTE can't function without ads. So there is no part of the Irish media which is outside that circle. Everyone was in the business of advertising, and advertising is in the business of selling optimism and is in the business of selling debt - selling you things you can't afford to buy.
So Eamon is absolutely right in the sense that the entire media was part of that process. I think it fair to say however that part of this story is that a large number of people in the media have been saying for 8 or 9 years now, not just last year and the year before, really going back to the turn of the century, and not just as a matter of opinion, but saying in a very reasoned way - that looking at examples from around the world - this process is unsustainable, it is going to crash.
I know some people in the media came under enormous pressure, for instance when the Irish Times printed Morgan Kelly's (Professor of Economics at University College Dublin) very stark piece about 2 years ago, the property crash is his subject, saying that based on research from around the world Irish property prices are going to fall by 40-50%. When then happens is that the property industry goes...
EK: I just want to let Eamon Dunphy back in...
ED: Fintan, where that warning should have been published should have been in the property supplement of the Irish Times. Journalism is really about serving the community and the reader. Where that particular, and I'm not blaming the Irish Times solely, the Irish Independent had a supplement and so did all the Sunday's, but really if the Irish Times was cognisant of this fact and it had this contributor, Morgan Kelly, then he should have been published in the property supplement. This is where we all went wrong.
Why is it that now people can stand back and point fingers without looking at themselves. I think this is a case for all Irish media, not just at the Irish Times. Though its fair to say it had the most lavish and inflationary property supplement, despite the fact it is supposed to be the paper of record in the country, a campaigning newspaper. The question is who was this serving? Principally, in this area of property values? It was serving the developers the builders and ultimately the tax revenue of the government. I don't see any hands up there, I think we should all put our hands up."
Eamon Keane's shock at the suggestion he might have “colluded” in inflating the property bubble is telling (it is worth listening to the exchange to hear just how surprised Keane is to hear Dunphy's remarks). Only someone who has been living under a large rock for the last 10 years could reasonably deny Stewart Lee's summation of media priorities: “Before all this happened all that was on television all day was programmes about how to buy a house, do up a house or sell a house for more than you payed for it, or do all three simultaneously.” Yet even an experienced journalist such as Keane, presenting the “freshest, wittiest and most challenging programming on the Irish airwaves,” is oblivious to the issue.
Fintan O'Toole's defense is as predictable as it is infuriating. He admits without reservation that “the entire media was part of that process - selling you things you can't afford to buy” and yet cites Morgan Kelly's warning in 2006 as evidence that the media supports a “plurality” of views, failing to mention that much of the negative response to Kelly's piece came from the media itself.
And despite Dunphy's appeal, there is little evidence to suggest the media will 'hold its hands up', without that is, a concerted effort by readers to force them to.
As one prominent journalist told us:
"I agree with the generality of your criticism – of course we (the media) need to be held to account and people like yourself (ie readers) are the best ones to do it."