The Political Economy and Media Coverage of the European Economic Crisis: The Case of Ireland

The Political Economy and Media Coverage of the European Economic Crisis: the case of Ireland

Author: Julien Mercille

ISBN-13: 978-0415721097

Publisher: Routledge

Guideline Price: £90

Julien Mercille believes that coverage of the European economic crisis, including the economic and social hardships that Irish people have been forced to endure since 2008, has “reflected the interests of political and economic elites”. He argues that the Irish media is even more conservative than its European counterpart – to the point of rivalling that of the United States.

The media is a critical agenda-setter. Politicians, bankers and other groups often spin information to conceal their real agendas. Unfortunately, too many people believe that spin, especially when it appears in print or on our screens. Mercille examines the side the media has taken during the austerity years, focusing on the housing bubble, the banking crisis, the bailout, and welfare, as well as on lessons from abroad on default and banking collapse.

He also outlines, in an impressive chapter, the historical context of the economic crisis, the changing nature of welfare ideologies, the increasing role of global financial institutions and markets, and the treatment of Ireland, Spain, Italy and other countries at their hands. Mercille seamlessly links the discipline of political economy with financial economics, Irish economic policy and the media.

At the heart of his approach is Edward Herman and Noam Chomsky's influential "propaganda model", which examines the way the media filters news. Mercille points out that, during the property bubble, the Irish Independent, the Sunday Independent, the Sunday Business Post and the Sunday Times, as well as this newspaper, relied on business for advertising revenue. Many also had strong links, including at board level, with bankers, auctioneers, and others who created and sustained the housing bubble.

Combine that with journalists’ relationships with their business-world sources and it is no surprise, Mercille says, that the media helped to fuel the belief that Ireland did not have a housing bubble. The media was far too cosy, in essence, with the elites it should have been challenging.

From the outset, the combination of free-market ideology, corporate media ownership, the need for advertising revenue, unquestioning journalism, and links to captains of industry and of government has delivered a media bound to be overly supportive of the views of the golden circle.

Mercille reports that The Irish Times published more than 40,000 articles about the economy between 2000 and 2007 but that only 78 of them – or 0.2 per cent of the total – were about the property bubble.

The Sunday Independent and Irish Independent carried numerous articles whose message was that house prices would not fall. "There is no property bubble to burst, despite doomsayers," the Irish Independent reported in June 2005; "There's a billion reasons to buy," it said in November 2006.

The media, financial, business and government elites supported each other – even after the bubble burst. Newspapers rarely supported alternatives to Nama, for example, or the bank bailout. A proposal for the State to create one or more “good banks” was a realistic option. This would have involved debt-laden financial institutions, such as Anglo Irish Bank, having their healthy assets and deposits put in the good bank. They would have continued to manage their bad assets, although without banking licences and without recapitalisation. Shareholders would have taken the losses; creditors would have swapped debt for equity. With all this would have come a new bank guarantee, to cover deposits only.

But the press virtually ignored the idea, Mercille says. Instead the press applauded the blanket guarantee that Brian Lenihan gave as minister for finance. The Sunday Independent, for example, wrote that the bank guarantee may "come to be admired, even copied, by others". The Sunday Business Post declared of the bailout: "Radical problem, right solution".

After the bailout the media consistently favoured cutting public spending over progressively taxing the wealthy. The austerity policies that followed, which the press also supported, disproportionately hit the less well-off; only 11 per cent of 1,000 articles that Mercille looked at opposed this fiscal consolidation.

He hopes that alternative-media websites will grow, in order to help redress the balance. Anti-water-charge protesters have used social media to organise themselves and to rally support. That shows how powerful the likes of Twitter and Facebook can be in bypassing the pro-establishment filter of the mainstream media.

Tom O’Connor teaches economics and public policy at Cork Institute of Technology