The Media and the Banking Bailout

national | arts and media | other press Friday October 03, 2008 21:34 by David Manning - MediaBite editors at mediabite dot org

An unfulfilled social contract

As the banking sector celebrates the government bailout the mainstream media have sought to capitalise on their readers formerly dormant anti-capitalist sentiment, with those journalists and editors that still retain an inkling of their activist youth revealing in the opportunity to indulge in some populist rhetoric, MediaBite takes a look at the media's performance over the boom years and asks whether the media, not just the bankers and developers, should be held to account for their part in bringing on this economic crisis.

The Media and the Banking Bailout

Towards the end of Tuesday night's edition of TV3 current affairs programme 'Nightly News with Vincent Browne' the host asked one of his guests, almost rhetorically, whether the media have some responsibility for the artificial inflation of property prices in their promotion of the market through property supplements and advertising. His guest agreed that to some extent the media did play a part in that hyping.

In the closing moments the same guest commented on the front page of the next day's Irish Times, an 'extraordinary juxtaposition' of an image of Minister for Finance Brian Lenihan, who had just struck a deal to underwrite the bad debts of Ireland's major financial institutions to the tune of €400 billion, looking somewhat 'haunted', while just beneath, an advertisement for an Irish based bank displayed it's current lending rates. Browne responded, "Well that's the way things go."

And with that the corporate media concluded the audit of its performance during the boom years. No failure on its part, whether it be the promoting of over valued property or irresponsible lending practices, could now prevent them from striking a populist tone in the face of a systematic failure. It is apparently irrelevant that these same institutions were instrumental in bringing about this crisis. Retrospect is after all only for 'old lefty whingers' – the conventional wisdom tells us there are no solutions to be found in looking backwards.

The media and big business

Ireland's national banks are creaking under the global credit crunch, as lenders make clear their suspicions of the banking sector's as yet unknown level of exposure to the deflating property bubble. According to Morgan Kelly, Professor of Economics, University College Dublin, "Irish banks are currently owed €110 billion by builders and developers. Of every €100 that Irish residents have deposited in banks, €60 has been lent for property speculation." Media analysis shares the blame for this predicament between the central boom profiteers, banks and developers.

What is not referred to is the symbiotic relationship between the corporate media and big business, a relationship that put newspapers and media outlets at the virtual helm of the property boom titanic. In July 2006 for instance the Irish Times bought the property website MyHome.ie for €50 million. Three months earlier Tony O'Reilly's Independent News & Media acquired PropertyNews.com, the "largest internet property site on the island of Ireland." Along with their competitors, the Irish Times and Irish Independent promoted the sale and purchase of vastly over valued properties to consumers - invariably under the disingenuous presumption that property value is a function of time.

The fraudulent mythology of never-ending property value increase has been perpetuated by the media for over a decade, with few notable exceptions. In 2005 the Irish Independent's Con Power reporting from a seminar attended by over 200 leading property professionals predicted:

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