In
their book on the financial collapse, "The Fall of the Celtic Tiger", Anton Murphy and Denis O’Donovan
recognise the media as one of the groups that, explicitly or implicitly, shaped
the environment in which major economic mistakes were made during the boom
years. According
to Julien Mercille from University College Dublin (UCD), in Ireland, some commentators have noted that
news organisations failed to give proper warnings of the impending crash.
What once feed and nurtured the magnificence of the Celtic Tiger
soon became a cataclysm. In 1996, total property-related taxes accounted for 4%
of government revenue, by 2006, they accounted for more than 17%. Property-related
lending in the 5 years prior to 2007 led to substantial increases in bank
lending with the total assets of the Irish banking system five times bigger
than the size of the economy at its peak. The total stock of mortgage loans in
Ireland exploded from €16 billion in the first quarter of 2003 to a peak of
€106 billion by the third quarter of 2008 – about 60% of Ireland's GDP for that
year.
The exposure of the banking sector to the property market turned out to
be fatal for the financial system in Ireland. A
research study conducted in 2010 by Dublin City University on the role of
financial journalists during the crisis concluded that during the economic
burst Irish business journalists "essentially became advocates" for
bankers and property developers in order to preserve access to sources.
Back
in 2014, following the Banking Inquiry, former MEP and Socialist MP Joe Higgins
proposed an investigation to the role that the media had during the period
before the market burst. Higgins considered the media, like any other
organisation, should be accountable for not exposing crucial information
timely. “They have to answer, like other major organisations and influential
organisations in society, in regard to how they property bubble developed and
what their role was in relation to reporting and how they reported on, for
example, the price of a home going up by the equivalent of the average
industrial wage for ten years up to 2006", said Higgins.
They would be questioned on the impact their coverage had on the inflation of
the property bubble in Ireland including, for example, newspapers which ran
large property supplements at the height of the Celtic Tiger.
In
fact, Morgan Kelly, a Professor of Economics at UCD wrote an article, in late
2006, in which he foresaw that real estate prices could possible fall 40% to
50%. The article with the title "How the housing corner stones of our
economy could go into a rapid freefall", was rejected by the Irish
Independent and the Sunday Business Post. By 2007, the Irish
Times accepted to publish Kelly's alarming interpretation of the property
market at the time, which attracted widespread public attention as well as
considerable criticism.
In
2014, Julien Mercille, a lecturer at UCD, wrote a book titled "The
Political Economy and Media Coverage of the Irish Economic Crisis: The case of
Ireland" where he argued that the news organisations convey the views of
political and economic elites and identified three factors that support his
belief. First, the weight of corporate and government links embedded in the
media. Second, advertising as a crucial source of revenue – particularly on
market property during the period prior to the crisis. In third place comes the
importance and difficulty of sourcing.
Mercille claims that journalists depend
mostly on mainstream institutions for their reports and therefore both the
government and corporations viewpoints are predominant in the media. Finally,
the neoliberal ideology reflected in the efficiency of the free market's uphold
and individual responsibility. The current dominant trend of neoliberal
financial economic theory conceptualises the role of journalism extremely
narrowly, viewing financial reporters as little more than conveyor belts of
financial data to investors.
