The Elephant in between the property ads

This article appears in this month’s issue of the Village Magazine (February 2009).

“The people who got us into this mess in the first place are not the people to get us out of it.” [David McWilliams, Irish Independent, 19 November 2008] This is the most pertinent advice from any journalist since the simmering economic crisis boiled over. In general, however, a crushing absence of credibility infuses Ireland’s newsrooms. The proverbial elephant in the room remains unfathomably neglected.

Media analysis shares the blame for the current economic predicament between the central boom profiteers – what Fintan O’Toole calls “a triangular relationship between politics, development and banking.” The glaring omission is ‘the media’ itself. The media inscribes this triangle, putting it at the virtual helm of the property boom titanic.

A symbiotic relationship

Few will dispute that “the Irish media for the last 10-15 years have had a crucial economic stake in a rising property market.” It is no secret for instance that in July 2006 the Irish Times bought the property website MyHome.ie for EUR50 million or that three months earlier Independent News & Media acquired PropertyNews.com, the “largest internet property site on the island of Ireland.”

It is uncontroversial then to say that a deflating property bubble is bad for business.

However, this relationship between media and business is not a simple one. It is inconceivable that the media, a wildly disparate group of individuals working in a variety of organisations, all with differing codes of practice and economic and ideological objectives, conceived a plan to inflate the property bubble. So if we discount collusion and mere chance, there must be something else.

A revolving door

One element of this relationship that could be considered unhealthy is the seeming interdependence of journalism, government and big business. This is no more evident than in the property sector. Estate agents and developers are not only consulted as experts, they themselves file copy.

Take for example Ken MacDonald, veteran Managing Director of Hooke and MacDonald, purveyors of lower-end apartments, and long-term advocate of the relaxations of architectural standards for new homes. He was described by Sunday Independent property editor John O’Keefe as the “Elvis of apartments and new homes” who “may not yet be able to turn water into wine – but you get the feeling it’s only a matter of time.” As late as March 2007 Mr. MacDonald was hilariously assuring Sunday Independent readers: “I am totally convinced that the market is currently in good shape and that anyone buying now will do extremely well in the years ahead.

The Irish Times’ Environment Editor and development expert Frank McDonald wrote how from one month to the next he would be in Sicily to interview one of Ireland’s leading property developers and then Ibiza to attend the birthday party of architect and old friend John Meagher, at which tax exile and part-time developer Denis O’Brien made “the speech”.

This cosy relationship is perhaps why developers are incessantly described as “affable”. The term is ubiquitous in the Irish Times and Irish Independent – when capturing the essence of our development Titans. So in these pages, Michael Taggart the “affable Derryman“, Sean Dunne the “affable but tough former ordnance surveyor“, Joe Moran the “affable Kerryman“, Bernard McNamara the “affable presence in the Fianna Fail tent” and Sean Mulryan the “affable but shrewd businessman.

The fact this cosy circle of elites exists doesn’t suggest back patting or unprofessional favour. It simply underlies the common interests and shared ideology that constrains media discourse and ultimately billowed the expanding bubble.

Futureshock: Property Crash

Take for instance RTE’s documentary Futureshock: Property Crash, broadcast in 2006 and presented by Richard Curran and his “Econo-Witches“, as they would later be dubbed. The programme explored the potential problems that might occur if the property market followed the boom-bust scenario of other countries – a timely and important thesis which had rarely been seriously considered in the media.

Recent praise of the programme neglects to mention the media’s widespread “outrage” towards RTE’s “sensationalist shock tactics” and “lurid predictions.” The Irish Independent claimed RTE had “broadcast fear” and accused it of trying to “kill the property market.” The Irish Times suggested the programme was responsible for the big decline in house-building.

It was “perversely irresponsible” according to the Irish Independent’s Alan Ruddock. Cl�odhna O’Donoghue reported on the “irresponsible, partly inaccurate and wholly sensationalist” programme. Marc Coleman, who now, in an absurd self-promoting ad, touts as one of the few prescient soothsayers and then the Irish Times economics correspondent, stated: “We are not on course for a property crash, unless we choose to manufacture one with irresponsible comment.” Other journalists simply found it “difficult to take too seriously.

The Broadcasting Complaints Commission however found that the programme “achieved an overall balance of argument.

Following the wave of criticism readers were comforted with fantastic predictions: “Far from an economic storm — or a property shock — Ireland’s economy is set to rock and roll into the century.

The ‘Pessimists’

There were of course dissenters. It is certainly not the case that the Irish media was completely resistant to contrary views. They were however few and far between.

In late 2006 Morgan Kelly, professor of economics at University College Dublin, writing in the Irish Times stated: “Compared with income, rents have actually fallen since 2000. The fact that rents have fallen shows conclusively that our housing boom is a bubble, pure and simple. A soft landing is not so much unlikely as contradictory.

A definitive statement from an authoritative and independent expert on the subject, yet the following month, as consumers returned from their holiday break, Arthur Beesley, the Irish Times’ Senior Business Correspondent reported that “the Irish Auctioneers and Valuers Institute (IAVI) is predicting a soft landing for the residential market in 2007.” Marc Coleman reassured potential buyers “All will be well – if politicians don’t meddle in the property market,” warning however that there would be a “gentle correction in the early year before a recovery.” And the IAVI smugly claimed the property market “continued to confound the pessimists.

The same IAVI who stated in January 2008: “the market is beginning to stabilise. The worst is over.

An elephant is never forgotten

There is far too much to cover in one article on this subject. We could ask why journalists were so adamant that buying to rent was such a good idea in early 2008. We could ask why readers suffered incongruous headlines like “Sub-prime mortgage market reigns supreme.” There is a plethora of such journalism in the archives of our national newspapers.

The unfortunate thing is that it appears the media has not learnt from these mistakes.

While we can understand its reluctance or inability to address its own complicity, an inability cursing even ‘radical’ journalists such as Vincent Browne, Fintan O’Toole and our ‘Economist in Chief’ David McWilliams, it is saddening to see those same mistakes being repeated.

A Procession of the Powerful

The ‘procession of the powerful‘ that dominated the bubble years – where debate was commanded by those with financial vested interests – continues.

For example, when the Irish Independent and the Irish Times looked for “educated guesses” as to what 2008 would bring, the experts they consulted were estate agents, auctioneers and bankers. When the government was considering changes to stamp duty in order to artificially bolster property prices in late 2007 the Irish Business Post “asked six experts for their views on whether now is the time for the government to reform the tax.” Those experts were estate agents, auctioneers and bankers.

Now that these expert opinions have been largely discredited, who do the media turn to looking for solutions to the crisis? Denis O’Brien of course – who recommended only months ago in the Irish Times that the disgraced Chairman of Anglo Irish Bank Sean Fitzpatrick be encouraged by the Health Service Executive (HSE) to become part-time executive chairmen of public hospitals.

And when the media hosts a debate on a potential economic solution who do they invite to balance the thoughts of those economists that predicted the malaise? The director of new homes at Savills Hamilton Osborne King and director of policy at IBEC the Irish Business and Employers Confederation of course.

While we watch the media host this narrow debate on how our economy is to be cured and our future redirected we must not forget David McWilliams’ warning. We must remember that just like business, banking and politics; corporate journalism has been nakedly exposed by this crisis.

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